Myth Buster

Scenario

Jane had recently purchased a house which is tenanted by Jack. Jane intended to raise the rental sum after the legal possession of the house has been successfully conveyed to her. Jack is unhappy with the unexpected increment and claim that the tenancy agreement with the previous landlord is still valid and binding on Jane. Jane was told by her brother, Ken that the tenancy is no longer valid and it shall ended once Jane has become the new owner.

Mythbusted.

In a Sale and Purchase Agreement for a property which is tenanted by tenants and the tenancy shall continue upon the purchaser obtaining the legal possession, the purchaser shall be bound by the existing tenancy and to comply with all the obligations stated therein.
Based on precedent cases, Jane may terminate the tenancy by serving NO LESS THAN 3 months’ prior notice to Jack in order to terminate the tenancy if no termination clause is stated in the tenancy agreement.

However, the aforesaid is mere common practice, each case will be assessed by the court on case to case basis if the matter end up in court.
Thus, if Jane insists to raise the rental sum, it is advisable for Jane to first negotiate with Jack to terminate the current tenancy and whether to commit to a new tenancy terms or to pay a mutually agreed compensation to Jack.

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