Hi Sarenco
I have never really understood this.
If I am renting a property under a one year lease can the landlord terminate the lease early to sell the property?
Or does he have to wait until the lease is up if he wants to sell it without a tenant?
Commercial tenants have indefinite leases after 5 years. But they are at market rent.
Is there any argument in favour of indefinite leases for residential properties but at market rent?
And balance that with legislation which allows landlords to deal quickly with tenants who don't pay their rent.
Brendan
What happens with commercial leases before and after 5 years if the landlord wishes to sell the property?
Are there any legal ways they can secure vacant possession?
It's s completely different thing.If it's constitutional for commercial leases, then my initial "lay" reaction is that it would be constitutional if extended to landlord-residential tenant leases.
It's s completely different thing.
A commercial property with a 'good' tenant actually increases the value of the property, and makes it easier to raise finance.
In the residential market, because of the difficulty in removing a non-paying tenant, it devalues the property, and it's almost impossible to raise finance without vacant possession.
If it's constitutional for commercial leases, then my initial "lay" reaction is that it would be constitutional if extended to landlord-residential tenant leases.
It will certainly complicate sales as once a property has entered the rental sector, unless the tenant leaves for other reasons before the sale is agreed, no owner-occupier is going to buy it. It will become 'sticky' as a 'commercial' property. That reduces the worth of the asset without any compensation from the state. But I'm not sure if that would be sufficient reason for it to be unconstitutional.
I don't think we are comparing like with like. A commercial property is normally leased to allow the leaseholder use the property to generate an income. Existing leases expressly deny the right to sublet or assign the lease without the owners consent. This is not the case with a lease for residential purposes ie the tenant is using this to live in.
Yes. However, once the tenancy has lasted more than six months Part 4 kicks in and the tenancy can only be terminated on specific grounds, with the appropriate notice. In other words, Part 4 overrides the terms of any (private) lease agreement between the landlord and tenant.If I am renting a property under a one year lease can the landlord terminate the lease early to sell the property?
The parties to a commercial lease are free to contract whether either or both have a right of early termination - it's not prescribed by legislation.The lease is binding on both. If the landlord wants to sell he can do so but with the tenant in place.
The constitution relates to natural person ie is a physical person. A company is a legal person but is not a natural person.That relates to how the lease is used and I am sure it is important for taxation purposes etc
But as a layman, I don't see how it relates to constitutional protections re: sale of property. Does the constitution distinguish between property owned by a person or corporation for us in commercial leases versus residential leases? If it doesn't, I think it could be hard to challenge this on constitutional grounds.
The constitution relates to natural person ie is a physical person. A company is a legal person but is not a natural person.
Of course there is nothing to prevent the purchaser of a property with a sitting tenant from evicting that tenant as soon as the purchase completes.
You can't force the purchaser to take on the lease concluded by the previous owner.
A company is a separate legal entity, its the co that owns the property and people own shares in the co.People own companies which own the properties. I dont see whether the rented property is owned directly by an individual or indirectly by a property company they own as changing things materially.
Do you forsee a ruling which allows directly owned properties to evict tenants before a sale but not indirectly owned?
Under what legal basis?
I don’t see why not.What about transferring ownership to your spouse - would the spouse then be able to evict the tenants as the new owner?
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