Genna-Wae Properties (Pty) Ltd. v Medio Tronics (Natal) (Pty) Ltd. (435/93) [1995] ZASCA 42; 1995 (2) SA 926 (AD); [1995] 2 All SA 410 (A) (30 March 1995)

Genna-Wae Properties (Pty) Ltd. v Medio Tronics (Natal) (Pty) Ltd. (435/93) [1995] ZASCA 42; 1995 (2) SA 926 (AD); [1995] 2 All SA 410 (A) (30 March 1995)

The Supreme Court of Appeal held that under South African law, the alienation of leased property does not terminate the lease. The purchaser is substituted ex lege for the original lessor, acquiring all rights and obligations under the lease. The lessee is bound to the new owner and does not have a right of election to resile from the lease upon transfer of ownership, provided the new owner recognizes the lease and the lessee continues to fulfill his obligations. The maxim 'huur gaat voor koop' operates to protect the lessee's security of tenure, but does not grant an option to terminate the lease solely due to the sale. The contrary view, based on academic commentary, was rejected as...

Citation
[1995] ZASCA 42
Parties
Appellant: Genna-Wae Properties (Proprietary) Limited; Respondent: Medio Tronics (Natal) (Proprietary) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
30 March 1995
Case Number
435/93
Procedural Posture
Civil Appeal / Appeal From the Durban and Coast Local Division
Outcome
Appeal allowed. Declaration granted in favour of the appellant.
Judges
Corbett, Hefer, Nestadt, Eksteen, Nienaber
Legal Topics
Huur Gaat Voor Koop, Lease Transfer on Sale, Real Rights of Lessee, Substitution of Lessor, Termination of Lease on Sale
Land and Property Civil Procedure Huur Gaat Voor Koop Lease Transfer on Sale Real Rights of Lessee Substitution of Lessor Termination of Lease on Sale

Case Brief

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Parties

Genna-Wae Properties (Proprietary) Limited

Appellant

Medio Tronics (Natal) (Proprietary) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From the Durban and Coast Local Division

Legal Issues

  1. 1 Does the sale of leased property confer upon the lessee a right of election to terminate the lease?
  2. 2 Is the lessee bound to the new owner under the lease after transfer of ownership?
  3. 3 Does the maxim 'huur gaat voor koop' grant the lessee an option to resile from the lease upon alienation of the property?

Ratio Decidendi

The Supreme Court of Appeal held that under South African law, the alienation of leased property does not terminate the lease. The purchaser is substituted ex lege for the original lessor, acquiring all rights and obligations under the lease. The lessee is bound to the new owner and does not have a right of election to resile from the lease upon transfer of ownership, provided the new owner recognizes the lease and the lessee continues to fulfill his obligations. The maxim 'huur gaat voor koop' operates to protect the lessee's security of tenure, but does not grant an option to terminate the lease solely due to the sale. The contrary view, based on academic commentary, was rejected as...

Court Disposition

Appeal allowed. Declaration granted in favour of the appellant.

Orders

  • The appeal is allowed.
  • The order of the Court a quo is set aside and substituted with a declaration that the agreement of lease signed on behalf of the respondent as lessee at Durban on 23 August 1991 and on behalf of 677 Umgeni Road CC as lessor on 26 August 1991, relating to the respondent's occupation of unit no 1, 677 Umgeni Road,...