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We recently mediated between a landlord and a tenant on the above subject and decided to have a conversation on it.

It could be painful from a tenant perspective to have invested heavily in developing an apartment only to be told that the property is up for sale or has been sold by the owner. I was thrilled and at the same time perturbed when a tenant flared up and stated to a landlord (who we were representing) that “he would hear from his lawyers”. I was thrilled because, the fact of tenancy cannot prevent an owner from disposing by sale or mortgage his title in a property. I was perturbed because I felt his pain. That is, having to look for a new apartment, pay agency fee, legal fee, and a higher rent, etc. This kind of situation comes with mixed feelings and what I’ve tried to do in this presentation is to address the law of landlord-tenant relationship on the issue of property sales as dispassionately as possible.

Generally speaking, a landlord has an unfettered right to sell property notwithstanding that there is an existing tenancy relationship. A tenant whose rent has expired is ordinarily considered to be a trespasser or otherwise a tenant at the Will of the landlord. Such a person cannot lay claims to any form of right against the sale of a property.

However, where a tenant’s rent is still subsisting, that tenant’s right to “occupy” the property is a priority to the right of the new owner to possess the property. In essence, that tenant has a right to possess the property paid for and exhaust the period that was paid for before the new owner can take over.

Some landlords (new or old) prefer to negotiate with tenants to vacate their property and be compensated. This is most probable where the tenant’s rent has not expired but a tenant whose rent has expired may not be able to negotiate for compensation since they are no longer a “contractual tenant”. Although, some landlords prefer to be generous and compensate in that situation too.

There are however situations where a tenant may be able to prevent a landlord from selling a property while his/her rent is still running. They include:

  1. Where the landlord and tenant agreed in the lease agreement that the landlord will not sell the property prior to when the lease expires.

  1. Some tenancy relationships are entered with the hope that the tenant may decide to buy the property if put up for sale during the period of tenancy. In this kind of situation, the tenant is given the right of first refusal to buy the property before it is offered to any other person. If this kind of clause exists in the lease agreement, then the tenant may leverage on it to prevent the landlord from selling the property to a third party without first offering it to the tenant.

  2. As stated earlier, a tenant whose rent is still subsisting is in a good position to enforce the limited right to occupy the property. That naturally would mean as well that the tenant cannot be forced out of the property until the rent has expired. 

If you are a tenant, it will be helpful if you engage your lawyer to add as part of the clauses in the tenancy agreement that the property will not be sold while your rent is subsisting, that you will be given a right of first refusal (if possible) to buy if the property is going to be put up for sale. You should also ensure that you are not owing your landlord because he who comes to equity ought to come with clean hands.

If you are a landlord seeking to sell your property, it might help to give notices to the tenants to vacate the property once their rents expire. It would be helpful to give such notice early enough so that they can have time to scout for new apartments and if you have to sell your property notwithstanding that there are tenants there, you should bear in mind that the purchaser cannot force a tenant whose rent is still subsisting out of the building and even where the tenancy has expired, the new owner would still have to follow due process of law in evicting the tenants.

If you are the purchaser, it would help to ensure that the seller resolves all tenancy related issues before the deal is closed. You may want to make part payment and wait to pay the outstanding after vacant possession. You may even encourage the landlord and tenant to negotiate a settlement that allows the tenant to vacate the property earlier than they would have, etc.

The laws relating to tenancy differs across different States and this article is not intended to substitute for a legal advice.

You are advised to consult a lawyer who is experienced in the relevant laws to understand the scope of your rights and how to be protected. For more information, you can contact us on +234-704-009-2801 or info@lawaccent.com