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Pre-emptive Right - What are your rights as a lessee?

A pre-emptive right, also referred to as a right of first refusal, is a contractual right often sought by a Lessee entitling such Lessee to obtain a first right to purchase the property that he/she is renting.

Property law & conveyancing attorneys Cape Town

The right does not compel an owner (Lessor) to sell but does prohibit him from selling the property to any other party without first giving the Lessee preference to purchase it. This means that in the event of the Lessor (the grantor of the option) deciding to sell his/her property, the Lessee (the option holder) has the option to either exercise his/her right to purchase the property or refuse it.

A pre-emptive right previously had to be reduce to writing in order for it to be valid and enforceable however the Constitutional Court has since developed our common law in this regard. In the case of Mokone Tassos Properties CC and Another [2017] 25 CC, the Constitutional Court had to determination whether the terms which are ancillary to an expired lease are also renewed when the expired lease is renewed verbally.  The Constitutional court ruled that such right, option or pre-emptive, are renewed automatically when the expired lease is renewed and further held that the court has the inherent right to develop the common law when needed.

Velile Tinto Cape Inc. – Property Law & Conveyancing Attorneys Cape Town

Our main focus is on property transfers, evictions, estate agency law, contractual disputes and the rendering of legal advice to small/medium enterprises.

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