Most landlords think the tenant is the obstacle to selling. The tenant is the asset, and the order you do things in matters more than the agent’s board.
A seller’s guide from The Property Bureau, Wynberg
Sell at the wrong point in the lease and you hand the buyer a discount. Sell at the right point and the rent keeps coming in while the sale goes through. This is the sequence we use for the owners we manage, including the ones who have already left the country.
In short
- The lease survives the sale unless the lease itself says otherwise. Read it before you do anything else.
- Decide whether you are selling to an investor (tenanted) or an owner occupier (vacant at transfer) before you set the price.
- If you are moving abroad, let the property first and sell when the market and the lease line up. One agency for both saves a second set of fees and a second relationship.
- Commission belongs in the mandate, with VAT stated or excluded in writing.
Read the lease before you read the market
South African law has a short rule for this: huur gaat voor koop, lease goes before sale. By default, when a tenanted property is sold the buyer takes it subject to the existing lease and becomes the landlord by operation of law. The rent is paid to the new owner from transfer, the deposit and its interest travel with the lease, and a sale on its own gives nobody the right to end the tenancy.
The exception is written into the lease, not into the sale. The Rental Housing Act 50 of 1999 (section 4(5)(c)) lets a landlord terminate a lease on grounds that are not an unfair practice and are specified in the lease. A well drawn lease therefore says what happens if the property is sold, if the owner needs to move back in, or if a buyer wants to occupy, and how much notice the tenant gets. Our own leases do. If your lease has that clause, you can give the notice it specifies and the sale can proceed to a buyer who wants to move in. If it does not, a fixed term tenant stays until the term ends unless they agree to leave, and a tenant who refuses to go after valid notice can only be removed by court order, so the notice period and the transfer date have to be planned together.
How we handle the notice in practice
We tell the tenant the day the offer is signed, not the week before they have to pack. From a signed offer to transfer is typically two to three months, so a tenant who is told at the start has two months at minimum, and usually more, to find another home.
We give as much notice as the timeline allows, in writing, and we keep the tenant, the owner, the buyer and the conveyancer updated as the transfer moves. Communication is not a courtesy here, it is the job: a tenant who knows what is happening cooperates with viewings and leaves on time, and the sale goes through on the date in the offer.
So the first thing we do with an owner who wants to sell is read the lease, not the market. It decides which of the two buyers below you can sell to, and when.
Selling a tenanted property: investor or owner occupier
| Investor buyer, tenanted | Owner occupier, vacant at transfer | |
|---|---|---|
| What they want | The income. A reliable tenant on a lease with months to run is worth money to them. | To move in. The lease must end before or at transfer. |
| How the price is set | By yield as much as by comparable sales. A correctly let property at a market rent sells well. | By comparable sales. Owner occupiers usually pay more in the Southern Suburbs. |
| What can go wrong | A property let below market, or on a month to month lease, sells for less than it would vacant. | Only if the property is actually available on the date in the offer. |
There are three ways to reach vacant occupation: the lease runs out and is not renewed; the lease has a sale or owner occupation clause and you give the notice it specifies; or the tenant agrees to leave early. Without that clause you cannot force an early end. The Consumer Protection Act 68 of 2008 (section 14) lets a private tenant on a fixed term cancel on 20 business days’ written notice, subject to a reasonable penalty, but gives the landlord no matching right outside a material breach.
What we do with our own owners. We look at the lease end date, the rent against the market, the tenant’s record and what the suburb is selling for, and then choose the route and the timing. Often the answer is to run the lease to its end, give proper notice that it will not be renewed, and market the property in the last two months with the tenant’s cooperation on viewing times. Sometimes the answer is to sell tenanted now, because the yield is strong and the market is good. There is no fixed rule; there is a decision, made with the figures in front of you.
Moving abroad: let first, sell later
Some of the properties we sell belong to owners who have emigrated. The pattern is nearly always the same. The owner is leaving in a few months, the market is not where they want it, and they do not want to sell under pressure from the airport lounge. So they let the property, we manage it, and when the market and the lease end line up, we sell it. One agency holds the file from the first tenant to the transfer.
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You are not a forced sellerThe rent covers the bond and the rates while you wait for the right market.
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Someone is hereRental management in Cape Town is not something you can run from another time zone. Inspections, maintenance, deposits and the Rental Housing Tribunal all need a person on the ground.
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No handover when you sellThe agency selling it already knows the property, the tenant, the body corporate and the paperwork. No second set of keys, no second relationship to build.
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You pay the existing client rate3.5% of the price achieved on a sole mandate, rather than 4%, because most of the work is already done.
This is a one stop arrangement by design. We do not pass the sale to a separate sales division or another agency. The person who signed your management mandate signs your sale mandate.
How we are instructed, and why it affects the fee
We do not cold call owners and we do not fight other agents for a listing. Most of our sales come to us from landlords we already manage, or by referral from them to a family member or a friend, usually when a lease ends and the owner decides it is time to sell. By then we know the property, the tenant, the body corporate and what the street has let and sold for. The owner makes one call to someone who already has the file.
That is why the commission for an existing client on a sole mandate is 3.5% rather than 4%: the work of getting to know the property has already been done, and there is no marketing spent on winning the mandate. Our owners tell us they chose us for the same reason they stay with us: nobody rings them at supper time to ask for the listing.
What it costs
| Mandate | Commission |
|---|---|
| Sole mandate, new instruction | 4% of the sale price achieved |
| Sole mandate, existing management client | 3.5% of the sale price achieved |
| Open mandate | Quoted on the property, and higher than a sole mandate |
On a sole mandate we spend on marketing knowing we are paid if the property sells, which is the same reason we charge management on rent collected rather than rent due. Commission is calculated on the price in the accepted offer to purchase and is payable on transfer. Whatever agent you use, get the percentage, whether VAT is added, and the payment point in writing before you sign.
Where landlords get caught
- Giving the tenant notice before the sale is agreed. You lose the rent and may still not have a buyer. Market first, with the tenant’s cooperation, and give notice under the lease clause when the offer is signed and you know when transfer is expected.
- Leaving the tenant to work it out from the board. A tenant who hears about the sale from a viewing request has no reason to help you. Tell them when the offer is signed, in writing, with the expected dates.
- Promising vacant occupation the lease does not allow. If the offer to purchase says vacant at transfer and the lease has no sale clause, you are relying on the tenant’s goodwill to perform the contract. Check the lease before the offer is signed, not after.
- Selling tenanted with a below market rent. The investor prices on the rent you are getting, not the rent you could get. Fix the rent at the next renewal before you sell.
- Letting viewings run the tenant ragged. Agree set viewing windows in writing. A tenant who feels respected keeps the property presentable; one who does not can cost you the sale.
- Forgetting the deposit. It goes to the new landlord with the lease, with the interest earned. Agree in the sale agreement who holds it from transfer and get the tenant’s statement up to date.
- An estate or trust sale with the authority not yet in place. The trustees or the executor give the mandate, not the beneficiaries, and that authority takes time to obtain. Our executor’s checklist sets out what is needed before marketing starts, and trust portfolio management covers the ongoing side.
- Selling from abroad without a local hand. FICA, signatures, the compliance certificates and the tenant’s queries all need someone in Cape Town with authority to act. Set that up before you leave, not after.
Decide who your buyer is, time the sale to the lease, keep the tenant on side, and let one agency hold the file from the first tenant to the transfer.
Frequently asked questions
Can I sell my property in Cape Town while a tenant is living in it?
Yes. Under the rule huur gaat voor koop the buyer takes the property subject to the lease and becomes the landlord, the rent is paid to the new owner from transfer and the deposit goes with the lease. If the lease contains a clause allowing cancellation on sale or for owner occupation, the landlord may give the notice the lease specifies (Rental Housing Act, section 4(5)(c)); without such a clause a fixed term tenant stays until the term ends.
Should I sell my rental property tenanted or wait until it is vacant?
It depends on the buyer you want and on what your lease allows. Investors pay for income and are happy to buy tenanted. Owner occupiers pay more but need the property vacant at transfer, which means the lease end, a sale or owner occupation clause with proper notice, or the tenant’s agreement. Read the lease, then look at the rent against the market and the suburb’s sale prices.
How much notice does a tenant get when a property is sold?
Whatever the lease provides, given as early as the sale allows. At The Property Bureau we tell the tenant the day the offer is signed. Transfer typically takes two to three months from that point, so the tenant has two months at minimum, usually more, to make other arrangements.
I am emigrating. Should I sell my Cape Town property before I leave?
Not necessarily. Many owners let the property first and sell when the market and the lease line up, so they are not forced sellers. The rent carries the bond and rates in the meantime. Use one agency for the management and the sale so the file does not change hands.
What commission does an estate agent charge to sell a tenanted property?
Commission is negotiable and set in the mandate. The Property Bureau charges 4% of the sale price achieved on a sole mandate, 3.5% for existing management clients on a sole mandate, payable on transfer. Open mandates are quoted on the property and cost more. Always get the percentage, the VAT position and the payment point in writing.
What happens to the tenant’s deposit when I sell?
The deposit and the interest earned on it go with the lease to the new landlord. The sale agreement should say who holds it from transfer, and the tenant should receive an up to date statement at the handover.
Thinking about selling a property you let out?
If your property is in Cape Town’s Southern Suburbs and you are thinking about selling, now or after you move, a written valuation costs you nothing.
See how we sell, what full management covers and our landlord services.
The Property Bureau, 26 Maynard Road, Wynberg, Cape Town. PPRA registered.
This article is general information for landlords and sellers, not legal advice. Reviewed October 2026. Sources: Rental Housing Act 50 of 1999, section 4(5)(c); the rule huur gaat voor koop as set out by Schindlers Attorneys (09.11.2018) and SSLR Inc (09.07.2020); Consumer Protection Act 68 of 2008, section 14; The Property Bureau’s published fees.
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