select
|

Purchasing a rented home

You have been looking for the ideal property to purchase for months and finally find it, but there is a catch, there is a tenant who is currently renting the property. What now?

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that because the lease agreement is legally binding and was in place before, it stands - regardless if the owner of the home decides to sell.
 
“The lease agreement goes with the home. Essentially this means that purchasing the home automatically makes the new owner a landlord, whether they planned to be or not. If the property is being bought as an investment or as part of a rental portfolio, the fact that the home is occupied might be seen as a drawcard. However, if the property has been purchased as a primary residence and the new owner intends to live there, it could be a problem,” says Goslett. “The new owner will only be able to take occupancy of the home once the lease agreement has expired and the tenant vacates the property. For this reason, it is best for the buyer to go over the details of the lease agreement and see how long the tenant can stay in occupation before they decide whether it is worth their while to purchase the home.”
 
He notes that there is also the matter of brushing up on the legal rights and responsibilities of a landlord. “There are respective obligations imposed on both the lessor and lessee in a lease agreement, so it is important for the purchaser to understand the implications of buying the home from the outset. For example, if there was a security deposit paid at the initiation of the tenancy, this will need to be refunded back to the tenant at the end of the lease. The buyer must ensure that they get this money from the seller. Otherwise, they will find themselves out of pocket,” advises Goslett. “Another aspect to check is whether the landlord is required to pay back any money that the tenant has paid for improvements to the property during the tenancy – this is money that should also be recovered from the seller during the sales process.”
 
If all goes according to plan, the new owner will only have to wait until the lease expires to move into their new home. However, this is provided that the tenant plays along and vacates the property when they are supposed to do so. “There are cases where the tenant has refused to move out, even once the lease agreement has run its course. Apart from having to deal with the delay, the new owner may also have to take legal action to have the tenant removed, which will cost money,” says Goslett. “If possible, before purchasing the property it is advisable to speak to the tenant and see what their intentions are, as this could save both time and money in the long run. A communicative, obliging tenant will make the process far smoother and pleasant,” he concludes.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Jan 2018
      Many people only start thinking about home-ownership when they are ready to “settle down” or start a family, which is why first-time buyers these days are generally in their mid-30s, compared to those in the previous generation who were usually in their mid-20s.
    • 22 Jan 2018
      Moving away from the city to a country or coastal town and a slower-paced life is a frequent new-year resolution for South Africans, but thorough research should be done before you break free from the hustle and bustle, because making the wrong move could turn out to be a very expensive mistake, and even more stressful for you and your family than staying in the “big smoke”.
    • 22 Jan 2018
      Cape Town is home to many breathtaking and historic homes, but House Invermark designed in 1969 by South African architect Gilbert Colyn, with inspiration from two modernist icons: the Glass House by Phillip Johnson and Farnsworth House by Ludwig Mies van der Rohe is in a class of its own.
    • 22 Jan 2018
      2017 was a challenging year for the South African property market in general, despite small pockets of thriving activity in areas like the Western Cape. As we head into 2018, Tony Clarke, Managing Director of the Rawson Property Group, casts his eye forward to property trends and market influences that could make their impact felt in the New Year.
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK