Buying a Flat That Is Already Let in Mauritius: What Happens to the Lease

Yes, the lease goes with the flat. If the lease is a notarial deed or has a certain date, the buyer cannot evict the tenant unless the lease expressly reserves that right (Mauritian Civil Code, art. 1743). You step into the seller’s shoes as landlord: you collect the rent, and you take on the terms the seller signed.

So the real work happens before you sign. The advertised rent matters less than the date of the lease, its term, its clauses and whether the flat is let furnished or unfurnished, because the law treats the two differently.

What happens to the lease when the owner sells?

A sale does not end a lease. Article 1743 of the Civil Code stops the buyer from evicting a tenant whose lease is authentic, meaning drawn up by a notary, or has a certain date. The tenant stays until the lease runs out, on the agreed terms.

Under the Civil Code, a lease with no certain date does not enjoy that protection. Article 1750 points the same way: when the lease is not authentic and has no certain date, the buyer who removes the tenant owes no damages. For an unfurnished flat, though, the Landlord and Tenant Act 1999 (see below) adds its own limits on recovering possession.

How does a lease get a certain date?

A lease signed by landlord and tenant without a notary is a private deed. Under article 1328 of the Civil Code, a private deed only has a date as against third parties from the day it is registered, from the death of one of its signatories, or from the day its substance is recorded in an official deed. For a buyer, registration is the practical test: ask for proof that the lease was registered, and for the date.

The Registration Duty Act sets no deadline for registering a privately signed lease of immovable property: registration is left to the parties. For a fixed-term lease, the duty is 1.25% of the rent over the term of the lease, or over the first ten years if the term is longer. A lease that was never registered is a warning sign: its date is not established against you as buyer, so its protection is weaker.

The clause that lets the buyer take the flat back after a sale

A lease can say that the buyer may evict the tenant if the property is sold. Where such a clause exists, the law limits how it works:

• the tenant of a house, flat or shop must be compensated with a sum equal to the rent for the period that local custom allows between notice and departure, unless the lease already fixed the compensation (arts. 1744 and 1745);
• the buyer must give the tenant the notice that local custom requires for ending a tenancy (art. 1748);
• the tenant cannot be evicted until the compensation has been paid by the seller or, failing that, by you (art. 1749).

Read that clause before you put a value on the flat. Without it, you are buying an occupied flat until the lease ends. With it, you can empty the flat, but someone has to pay the compensation, and the deed of sale should say who.

Let furnished or unfurnished: the 1999 Act does not apply the same way

The Landlord and Tenant Act 1999 protects tenants and limits what landlords can do, but it excludes premises let at a rent that includes furniture, board or equipment (s. 3(2)(a)). A flat let furnished, which is common with expatriate tenants, falls under the Civil Code and the lease, not under that Act.

For an unfurnished flat, a court can only order possession on the grounds the Act lists: unpaid rent, nuisance, damage, subletting and the landlord’s own need to live there, among others. As a rule, the court must also find the order reasonable.

Moving in yourself is not a certainty

Many people who buy an occupied flat plan to live in it one day. For a flat covered by the 1999 Act, section 24 lets the court order possession when the landlord, their family or one of the co-owners reasonably needs the premises. But the court will refuse if it finds the order would cause the tenant greater hardship than refusing it would cause you, and it can order you to compensate the tenant.

So do not build a retirement plan on emptying a let flat. If you want to live there by a set date, buy it vacant, or agree with the seller that the tenant leaves before completion.

What to check before signing the promise to sell

Before you commit, ask the seller for:

• the full lease and any amendments, with proof of registration and its date;
• the remaining term, the current rent and any increases already applied;
• whether the flat is furnished, with the inventory if there is one;
• the rent book or, failing that, bank statements showing the rent actually received: an advertised rent is not a paid rent;
• the amount of the security deposit and how it will be handed over to you or deducted from the price;
• the service charges and any arrears of rent or charges.

Have the seller’s statements about the lease written into the promise to sell, and settle who keeps any rent arrears and the deposit. The notary drafts the deed and can check that the lease was registered, but you have to ask. For the costs of the purchase itself, see stamp duty and notary fees.

Work out the yield on the rent that is actually paid

The appeal of a let flat is obvious: income from the first month and no vacancy to fund. The trap is paying a price based on a rent that will not last, such as a rent above market level in a lease that ends soon. Compare the rent with the rental yield seen in the area and with market prices, then deduct charges and tax: tax on rental income applies to you from the moment you receive rent.

If you do not live in Mauritius, arrange a property manager from day one, so the tenant knows whom to pay and whom to call. And if the tenant stops paying after the sale, the landlord’s options are those described in our article on unpaid rent.

When a let flat is a good buy, and when to avoid one

A let flat suits an investor who wants income straight away and can find a sound, registered lease, a tenant who pays and a distant end date. It suits a buyer who wants to move in soon, or to renovate before re-letting, far less.

To see the lease from the tenant’s side and what a contract should contain, read our guide to long-term renting. For the whole buying process, including the promise to sell, see the guide to buying for foreigners.

Sources and verifications

• Mauritian Civil Code, articles 1328 and 1743 to 1751 (consolidated text published on FAOLEX, Food and Agriculture Organization of the United Nations)
• Landlord and Tenant Act 1999, sections 3, 5, 6, 9, 16 and 24 (text amended to 2020, copy published by APEC)
• Registration Duty Act, First, Second and Sixth Schedules (Ministry of Finance, Mauritius)