Category Archives: Lease agreements

How do I cancel a lease?

What happens when a landlord or a tenant wants to cancel a lease? What rules and what legislation apply? What protection does the law provide?

If you want to end your lease early, this can be done in situations where:

  • the Consumer Protection Act or Rental Housing Act applies, or
  • there’s a clause in the contract that allows for early cancellation, or
  • if both parties agree to it.

If on the other hand, one of the parties wants to cancel because the other is in breach of the contract, then certain notice periods come into effect – the first of which being, of course, that the aggrieved party is required to give written notice for the breach to be remedied.

For tenants

  • If your landlord is in material breach of the lease, then cancelling your lease early will not be in breach of the contract.
  • If your landlord has met all the conditions of the lease and you decide to cancel your lease early, you will be in breach of contract unless the termination of the lease has been mutually agreed upon. Speak to your landlord before making any rushed decisions, chances are, you may be able to come to a mutual agreement whereby you are able to find a replacement tenant or sublet the property for the remainder of your lease.

For landlords

  • Firstly, look to the provisions of the lease itself. Most leases contain a breach clause, which indicates a period of a number of days that are necessary to be given as notice to the tenant of a breach. If there is no breach period specified, it will be a ‘reasonable period’ in terms of the common law.
  • If you give notice of the breach, and it is not remedied in the breach notice period, this means that you can take action to sue for whatever is owed or even issue summons and attach the tenant’s goods by evoking your landlord’s hypothec, but you cannot cancel the lease and evict.

When it comes to cancelling agreements, it is always best to consult a legal expert since doing something from your own understanding and experience could lead to a court case.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Tenant and landlord: What are your rights and obligations?

01_BSandra would like to move into her own place but like many people she is unsure what a lease is and what responsibilities it will place on her. A lease agreement is defined as the agreement entered into between the tenant and the landlord for the leasing of a property. The lease agreement regulates the rights and obligations of both parties and protects the parties mutually.

The Rental Housing Act No. 50/1999, as amended by the Rental Housing Amendment Act No. 43/2007, regulates the relationship between a tenant and a landlord, even before commencement of the lease agreement.

The Act determines that the landlord may not discriminate against the prospective tenant, his family or friends, including on grounds of race, sex, pregnancy or marital status. This applies as early as placing an ad for the leasing of a property or even during negotiations between prospective tenants and the landlord,

The lease itself does not have to be in writing to be binding on both parties and should a tenant request that an oral agreement be reduced to writing, the landlord may not refuse the request.

A written lease agreement must contain the following information:

  • The names of the parties, as well as their South African addresses;
  • A description of the property being leased;
  • The monthly rental payable and reasonable increases;
  • The deposit payable, if applicable;
  • The period for which the property will be leased.  Should the agreement not mention a specific period of lease, the agreement must indicate the notice period required should one of the parties wish to terminate the contract;
  • Any other consideration, besides the monthly rent, which may be payable;
  • A complete list of defects that are present at the time that the parties entered into the lease agreement.

If the property is situated in a complex that has its own rules, a copy of those rules should be attached to the lease agreement.

The landlord must ensure that he/she gives effect to the provisions contained in the lease agreement.

As mentioned, mutual rights and obligations are created for both parties in the lease agreement. These rights and obligations include the following:

Tenant’s rights:

  • To jointly inspect the property before the tenant moves in and record any defects or damage to the property.  This provision protects the tenant at the end of the lease period to ensure that the tenant will not be held liable for damages that already existed at the time the lease was entered into;
  • During the lease period, the tenant has the right to privacy and the tenant’s property, home or person may not be searched;
  • If the landlord fails to inspect the property upon expiry of the lease, the tenant can assume that the landlord acknowledges that no damage has been done to the property, and that the full deposit, together with interest thereon, must be refunded to the tenant.

Landlord’s rights:

  • To request a deposit, in the amount agreed upon between the parties, before the tenant takes occupation of the property;
  • To receive timeous payment of the monthly rent and also to collect overdue payments, after a court order or order from a Tribunal has been obtained;
  • To receive the property in a good condition upon termination of the lease;
  • To jointly inspect the property within three days before the lease expires and determine if any damage has been done to the property for which the tenant should be held liable;
  • To recover the cost of repairs, should the property be damaged, from the tenant;
  • Should the tenant not give access to the property for a joint inspection before expiry of the lease, the landlord should inspect the property within seven days after expiry of the lease and utilise the deposit for necessary repairs.  The balance of the deposit, if any, should be refunded to the tenant within twenty-one days.

Landlord’s obligations:

  • To invest the tenant’s deposit in an interest-bearing account at a financial institution, with an interest rate equal to or higher than the interest rate at that time earned on a savings account at such financial institution.  The tenant may request proof that the deposit is invested and the landlord may not withhold such evidence;
  • To furnish the tenant with a receipt for each payment made by the tenant, which receipt should clearly describe the property, be dated, and indicate in full what the payment is made for (eg Rent for the month of February 2013, or deposit);
  • To utilise the deposit to repair any damage to the property or to recover arrears rent after expiry of the lease, and to pay the balance together with interest earned thereon to the tenant within fourteen days after the expiry of the lease;
  • To keep all receipts in respect of repairs done to the property which were deducted from the tenant’s deposit, and make such receipts available to the tenant;
  • To refund the tenant’s deposit together with interest thereon, within seven days of the expiry of the lease, in the event that no repairs are to be made to the property.

Should a dispute arise between the parties, the Rental Housing Tribunal in the area where the dispute arises, can be contacted.

It is very important for both the tenant and the landlord to make sure that their intentions are clearly defined in the lease and that they understand the terms of the lease before the lease agreement is signed.  Also that all provisions, responsibilities and obligations are clearly set out in the agreement.  It is advisable to seek legal advice if any uncertainties arise, before the lease agreement is signed.

References:  Rental Housing Act No. 50/1999, as amended by Rental Housing Amendment Act No. 43/2007

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.