This principle (HUUR GAAT VOOR KOOP) of the Roman-Dutch Law can be found when a property that is rented by a Lessee, is sold by the owner to a third party. Here the effect of “huur gaat voor koop” is that the Purchaser is bound to the lease agreement and the Lessee is entitled to remain in occupation in accordance with the terms thereof. The Purchaser cannot plead ignorance and the right of the Lessee is stronger than the right of ownership of the Purchaser regardless of whether the Purchaser had notice of the existence or the terms of the lease. Rent is due to the seller until date of transfer. The deposit must be transferred into the new owners name. If you have your receipt, then the new owner is liable even if the old owner has “lost” your deposit.
What is interesting is in 1989, the Appeal Court explained that the Purchaser acquires all the rights and obligations which the Seller had in terms of the lease except collateral rights unconnected with the lease. The Court found that an option to renew a lease is such an obligation due by the Lessor and accordingly not “collateral” or unconnected with the lease. An option to renew a lease therefore also “gaat voor koop”.
It is of the utmost importance that a Purchaser of a fixed property, which is occupied by a Lessee, should make sure that he/she is well aware of the contents of the lease agreement. Ignorance of the lease, or the contents, will in most cases not be an excuse. If there is uncertainty, a Purchaser should request the Seller for a guarantee and/or indemnification in the Deed of Sale.