By Siyabonga Malaza
Tenants have various reasons for terminating their lease agreements (“Agreement”). These reasons range from breach of the contract by either the tenant or landlord to a change in circumstance such as financial difficulties, health problems; retrenchment, liquidation of a business, relocating to another place; end of the academic year and so forth. Lease agreements can be for a fixed period or non-fixed period, running from month to month. The relationship between tenant and landlord is regulated by law – so even termination of the agreement is regulated by the law. For this article, I only explore both periods for residential leases and their consequences below.
A tenant may cancel an agreement upon expiry of the fixed term without penalty at any other time before the fixed term agreement by giving a 20-business day notice in writing subject to a reasonable cancellation penalty by the landlord. To charge a good cancellation penalty, the landlord must take into account the amount which the tenant is still liable to the landlord up to the date of cancellation; the duration of the agreement as initially agreed; losses suffered or benefits accrued by the tenant as a result of the tenant agreeing; the length of notice of cancellation provided by the tenant; the reasonable potential for the landlord, acting diligently, to find an alternative tenant between the time of receiving the cancellation notice and the time of the cancelled reservation; and the general practice of the relevant industry. The landlord may not charge a charge which would negate the consumer’s right to cancel a fixed-term agreement. As a customary practice, two month’s rental is considered a reasonable cancellation penalty. Once a tenant finds a replacement to take over their agreement immediately after vacating the premises, it would be good that the cancellation penalty falls away.
On the other hand, the landlord may cancel the agreement 20 business days after giving written notice to the tenant of a material failure by the tenant to comply with the agreement unless the tenant has rectified the oversight within that time. If, on the expiration of the lease, the tenant remains in the dwelling with the express or tacit consent of the landlord, the parties are deemed, in the absence of a further written lease, to have entered into a periodic lease – month-to-month, on the same terms and conditions as the expired lease, except that at least one month’s written notice must be given of the intention by either party to terminate the lease. The one-month notice referred to above is one of the calendar, not business days. For this notice to be valid, it must be given on the first day of the month to terminate at the end of the month.
Should the tenant vacate the dwelling before the expiration of the lease, without notice to the landlord, the lease is deemed to have expired on the date that the landlord established that the tenant had vacated the dwelling. Still, in such an event, the landlord retains all their rights arising from the ttenant’st’s breach of the lea e. In conclusion, the tenant and landlord must adhere to the notices discussed d. Failure to adhere to the above may have far-reaching consequences for the landlord and tenant, depending on the circumstances.
Siyabonga Malaza (BA LLB, Rhodes) is a Candidate Legal Practitioner at Whitesides Attorneys, writing in his personal Capaci y. The views expressed in this article reflect his views and not those of the employer.
