Once a property is sold with tenants in occupation, what are the rights that tenants have when either cancelling or enforcing the lease?
Landlords have the right to sell their property at any time, however the tenants’ rights are to remain in place before any rights of the buyer; meaning that tenants can remain in the property until their lease expires.
- When the property is sold and the lease is passed from one landlord to another, the conditions of the existing lease do not fall away. The tenants and the new landlord are bound by the conditions until the lease is renegotiated or expires. Therefore the previous landlord must transfer the securing deposit to the new owner. Thereafter the said deposit gets held in an interest-bearing account in the tenants’ favour, to be refunded to them with interest, once they vacate the premises.
- Failing which, if there is a new landlord and tenants choose not to stay on, there could be conditions preventing this in the lease and a penalty may incur. Although the CPA does make provisions of 20 business days’ notice, there could be implications and penalties involved, which would normally be one month rental and costs incurred by landlord or agent i.e. advertising etc.
To wrap-up in short, the parties, I.e. landlord or tenants could cancel the lease by mutual consent, once the property is taken over by the new owner.