Safeguarding tenants of sold property

It is a common occurrence in the real estate business. But, unknown to many, ejecting subsisting tenants immediately after house ownership change is wrong.

Experts warn that a prospective property buyer inherits both assets and liabilities of the property, hence, moving against tenants upon purchase is wrong. According to a report by The Nation, developments like this have rendered many homeless.

A tenancy agreement, like most commercial contracts, binds the parties to the agreement and any other person that may take over the place of any of the parties.

The agreement binds a landlord and a tenant as well as  other persons that may takeover, inherit, purchase or step into the shoes of the landlord or tenant.  A buyer of a property is bound by the agreement between the tenants on the purchased property and the former landlord/seller.

Such a new purchaser cannot terminate tenancy agreements, send away tenants or increase rent unless in line with the tenancy agreement between the tenants and the former landlord.

There is always panic in rented property once a landlord with multiple wives children dies,  or desires to sell his property. Most tenants  in such circumstances are not sure if their tenancy agreement will be terminated by the new purchaser/owner.

Tenants in the situation are also in a limbo whether there will a rental increase. Also, some tenants pray that the new owner doesn’t just drive away the tenants on the property.

A lawyer,  Onyekachi Umah,  in a publication lamented that many purchasers of property with tenants, often force out tenants (by fraud and force), on the claims that they wish to renovate the property but without any compensation to tenants.

He said: “Aside logic and moral, the most important tool in solving legal equations is Law. Law covers the written laws made by the legislature and the case laws made by courts in Nigeria through judgments of courts.

To resolve this legal puzzle, he asked: “What happens to tenants when property is sold? The judgments of the appellate courts in Nigeria will be considered.”

According to him, the Court of Appeal has held that nothing happens to tenants when a property is sold. Tenant’s rights and powers are never affected by selling and purchasing of their property. The contents of a tenancy agreement bind the landlord and any new purchaser and as such the sale of a property does not affect a tenant and his tenancy agreement.

He added: “The actual words of the Court of Appeal;  ‘… the covenants therein (in a tenancy agreement) are binding not only on the landlord and tenant, but also (any) person whom the property subsequently passes thereto. Undoubtedly, the terms ‘Landlord’ and ‘Tenant’ as couched in the tenancy agreement in question include ‘the successors-in-title and assigns’ of both the landlord and tenant.”’

He cited SAULAWA, J.C.A. in the case of Chaka v. Messrs. Aerobell (Nig.) Ltd. (2012) 12 N.WL.R. (Pt. 1314) p. 296 @ 320 CA to back his argument.

He explained that the moment a landlord sells his property, the new owner takes over the property with the assets and liabilities in it, including the tenants in it. So, the tenancy agreements between a tenant and his landlord will automatically be deemed to have been inherited by the new purchaser/owner of the property. Hence, the new owner of a property is bound by the tenancy agreements and relationships between tenants on the property and the former owner of the property.

The new owner does not need to sign the tenancy agreement or be mentioned in it for the new owner to be bound. Rather, the new owner replaces the landlord in the tenancy agreement without any party, the moment the property is sold to the new owner.

He advised prospective purchasers of property to understand the agreement between sellers/landlords and their tenants, ahead of purchasing a property, because they must inherit and continue with such agreements. However, upon the expiration of a tenancy agreement, the new purchaser/landlord can then make a fresh tenancy agreement with the tenants.

Also, another lawyer and property consultant, Nkem Ogonsiegbe, said: “When a person is buying a property he buys it with its assets and liabilities. After buying the property, what the buyer can do is to issue a proper quit notice to the tenant if he doesn’t want the tenant. He can’t just tell the tenant to vacate or start throwing his/her things away. If he tries it, he’ll be liable for damages.’’

Told that it is almost the practice for a new landlord to quit tenants without considering the fate of the tenants and status of their rental, he added: “It is totally wrong, if the affected tenant goes to a lawyer the story will change and the new owner will be liable.”

Immediate past chairman, Nigeria Institution of Estate Surveyors& Valuers (NIESV) Lagos State chapter, Dotun Bamgbola, averred that tenants could not be kicked out by a new landlord without the mandatory statutory notice to tenants.

He explained that the new landlord had to do his ground work to ascertain the tenancy of each tenant if he didn’t want to continue with them.

He said: “A yearly tenant must be given six months, while a six months’ tenancy must one month notice. A seller must give the new owner the tenancy schedule to avoid running foul of the law. A buyer can do himself a world of good if he buys one that is not occupied. If he wants the old tenants to leave, he must ensure that the previous owner gave his tenants the statutory notice and if the time expires, he coul give his own statutory quit notice to avoid going against the law.”

A developer Ismail Tunde said some tenants are recalcitrant and sometimes push some landlords to go against the law which he agrees is, however, wrong.

According to him, some tenants ignore quit notices and in some cases avoid collecting them, feigning innocence that they exist.

He condemned such tenants who were eager to go to court to prolong their stay, thereby depriving the landlord of his lawful rentals.

He argued that though he did not subscribe to kangaroo tactics, some tenants, inadvertently, bring it upon themselves while trying to be clever by half.

On the way out, he asked for an advocacy on landlords and tenancy rights and called on players  to educate the public on their rights.

To him, a tenant can be a landlord tomorrow; the earlier everyone knows his/her right, the better.

Source: The Nation

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