Four things to consider when selling a tenanted property

As a South African homeowner, you're free to put your home on the market at any time - even if a tenant is living on the property. However, your tenant has rights in this situation, and you'll need to approach the situation carefully. Jawitz Properties breaks down four questions that you need to answer if you're putting a tenanted property on the market.

1. Could you wait, or do you need to sell immediately?

Legally speaking, there's nothing that prevents you from selling a home that's currently occupied by a tenant. However, the process of selling your home will be slightly more complicated. For starters, a would-be buyer who wants to buy a property to live in immediately may be inspired to look elsewhere. Property viewings also become more complicated, because you'll need to find times suitable for the buyer, the property practitioner and the tenant. You also won't be able to stage your investment property to look its best.

Waiting for the end of your lease may mean putting your future plans on hold for a few months. However, if you give your tenant notice that you intend to sell when their lease expires and wait for them to move out before putting your property on the market, the process of selling may be smoother.  You'll need to weigh up the pros and cons of acting immediately or waiting.

2. Are you familiar with the rules around selling leased properties?

If you're selling a property occupied by a tenant, unless specifically stated otherwise in the lease agreement, the sale will be bound by the principle of "huur gaat voor koop" in South African law. Translated from Dutch, this means "lease comes before sale". This means that the new owner of your property will have to honour your tenant's lease until it expires. The deposit that the tenant paid, as well as any interest that has accrued on the amount, needs to be transferred to the new owner, who by default becomes your tenant's new landlord upon transfer. This can be advantageous because a buy-to-let investor will see the value in a property that has a reliable and long-standing tenant.

3. Have you established open channels of communication with your tenant?

Knowing that their landlord is putting their home on the market can be stressful for tenants, and by discussing it with them openly, you can make them feel at ease. This, in turn, will inspire them to be flexible and accommodating when it comes to property viewings. If your tenant decides that they would like to move before you put the property on the market, consider being flexible and accommodating an early lease termination in line with the provisions of the Rental Housing Act.

4. Have you enlisted the services of an experienced property practitioner?

Selling a property that's occupied by a tenant has layers of complexity. Before you sign a mandate to sell your home, make sure that the property practitioner you're working with is experienced in this area. Having a knowledgeable practitioner working with you will ease your stress levels and simplify your sale.

If you want to sell a property that's currently home to a tenant, the first step is to get in touch with the Jawitz Properties team. We have ample experience in managing such sales and ensuring that everyone - including the buyer, the seller and the tenant - is happy with the outcome.