Early Termination of Lease Agreements and the Consequences

Early termination of lease agreement

In terms of the Consumer Protection Act (“CPA”) you as the tenant can terminate your fixed term lease agreement with your Landlord by providing him with 20 business days’ Notice, even if your agreement does not make provision for same. You do not have to provide him with an explanation for such termination.

Bear in mind that should you wish to cancel the Lease Agreement prematurely then you may become liable to the Landlord for a “reasonable cancellation penalty”. The landlord is guided by Regulation 5 of the CPA as to what factors should be taken into consideration in determining such penalty.

If however your Lease expired and you did not either, in terms of the agreement renew same or enter into a completely new agreement, then your lease would then operate on a month to month basis and not be subject to the CPA. Such Notice of Cancellation would then be one calendar months’ notice in terms of the Rental Housing Act.

Seller's Right to Refuse Excessive Rates

Judgment Municipality

A recent decision made by the Supreme Court of Appeal has declared that Municipalities are not allowed to request payment for rates, fees and other charges that extend for an unreasonably lengthy amount of time beyond the date of the Clearance Certificate.

The ruling was delivered on 29 March 2017 in the case of Nelson Mandela Bay Municipality v Amber Mountain Investments 3 (Pty) Ltd. Click here to see the full order.

A Clearance Certificate is required in order to successfully register the transfer of immovable property. This is issued by the relevant Municipality in the area that the property is situated. The Seller is required to pay an amount determined by the Municipality, which is a projected amount usually 3-6 months in advance.

The ruling now allows Sellers to refuse to pay an amount beyond the date of the Clearance Certificate.