Every offer to purchase we see promises the same thing: vacant occupation on transfer, no tenants in the property. Buyers read that clause, feel reassured, and move on to worrying about bond approval and moving trucks. They shouldn’t.
We recently acted for buyers who signed exactly that kind of agreement. The seller warranted, in writing, that there were no tenants on the property. Transfer went through. The buyers arrived to take occupation of their new home and found tenants living in it, under a lease the seller had signed years earlier and simply never mentioned.
This is not a rare horror story. It is a predictable, avoidable outcome of buyers treating a warranty clause as protection, when it is only a promise.
A Warranty Is a Promise, Not a Guarantee
A clause warranting vacant occupation gives you a claim against the seller if it turns out to be false. It does not, on its own, remove a tenant from the property. Those are two entirely separate legal problems, and conflating them is where buyers get hurt.
The reason is a principle of South African law known as huur gaat voor koop — “lease goes before sale.” A lease over a property survives its sale. The new owner steps into the landlord’s shoes, bound by that lease, whether they knew about it or not, and regardless of what the sale agreement says between buyer and seller. The sale agreement is a contract between buyer and seller. The lease is a separate contract between the seller and the tenant. Selling the house doesn’t cancel the lease — and warranting to a buyer that there are “no tenants” doesn’t make an existing tenant disappear. It just gives the buyer someone to sue.
What This Actually Costs You
Suing the seller for breach of warranty is cold comfort when you’re the one without a roof. In the meantime, you’re paying for accommodation you didn’t budget for, possibly storing your furniture, and paying legal fees to pursue the seller and, separately, to deal with the tenant, because removing an occupier from a property, even one with no legal right to be there, is not something you can simply announce. South African law requires proper written notice and, if the tenant doesn’t leave, a formal eviction application through the courts, with strict procedural requirements under the Prevention of Illegal Eviction Act. That process takes months, not days, and it runs regardless of how clear-cut your case against the seller is.
Add legal costs, rental income you never wanted, and the toll of not being able to move into a home you already own, and a “watertight” warranty clause starts looking a lot less watertight.
Where This Goes Wrong
It almost always comes down to the same gap: nobody checked. The buyer trusted the seller’s word, the agent’s assurance, or the wording of a standard clause, and nobody independently verified who was actually living in the property before transfer took place. By the time anyone asks the question, the buyer already owns the problem.
Why a Buyer’s Agent or a Fixed-Fee Attorney Review Pays for Itself
This is precisely the risk a buyer’s agent, or an attorney engaged before you sign, is there to catch. A proper pre-purchase review doesn’t just check that a vacant-occupation clause exists — it tests whether the clause actually protects you. That can mean requiring the seller to produce proof there is no lease, structuring the agreement so part of the purchase price is held back until vacant occupation is proven, or building in a genuine right to cancel, rather than a bare promise you only discover is broken after transfer.
Most buyers only bring in an attorney once there’s a signature on the offer to purchase and a deadline looming, or transfer has already taken place, as in the instance of our client. By then, the terms are fixed and its often too late.
Engaging an attorney for a fixed fee before you sign, to read the agreement, ask the awkward questions, and push back on clauses that sound protective but aren’t actually costs a fraction of what it costs to unwind a problem like the one above. A buyer’s agent, doing the on-the-ground work of establishing who is actually living in a property before you commit to buying it, closes the other half of the gap.
Before You Sign, Ask
- Has anyone independently confirmed there are no tenants, not just the seller’s word, but actual verification?
- If the agreement warrants vacant occupation, what happens if that warranty turns out to be false? Is there a remedy that protects you before transfer, not only after?
- Has an attorney reviewed the agreement, or are you relying on a standard template because it “looked fine”?
If you can’t answer those with confidence, the sale agreement isn’t ready to sign.
Buying a property is one of the largest financial decisions most people will make. A fixed-fee review before you sign is a small, known cost, set against a risk that, as our clients discovered, can be very large indeed.