Must A Right Of First Refusal (Pre-Emptive Right) In Respect Of Land Really Be In Writing?
Category Legal Thought of the Week
Yes and no. For long, and because of sound policy considerations, our law ruled that pre-emptive rights relating to the sale of immovable property must be in writing in order to be valid and binding.
For example, a 12-month lease agreement contains a right of pre-emption in favour of a tenant. One further oral renewal of the lease follows and thereafter the landlord and tenant make a one-line entry on the ‘old’ lease mentioning it is extended for a further period.
During this further period, the landlord sells the property subject to the lease. The lease expires and the tenant refuses to vacate, quoting the pre-emptive right that existed in the old lease. One of the findings in this matter was that the granting of a pre-emptive right is not an ‘alienation’ and therefore needs not comply with the “in writing and signed” requirements of the Alienation of Land Act, rendering the provision in the ‘old’ lease still valid. This is a dramatic change to the previous position. This despite, transparency and considerations relating to the accuracy of recall if the provisions of an agreement is not reduced to paper, still call for such agreements to be in writing.