A Property24 reader asks: I am a tenant and I have signed a fixed period lease agreement with the landlord. I can no longer afford to stay at the premises. I have once forwarded my lease cancellation notice and the landlord representative informed me that, since I have signed a fixed term lease agreement with the landlord, I cannot make any lease terminations, prior to expiration of the lease. As per information from her, I am liable for rent until the lease expiration. Please advise if I honestly don’t have a way of terminating the lease agreement? I am in a bad financial situation and I am afraid the situation is getting worse. Your assistance will be much appreciated.
Marlon Shevelew, specialist rental and eviction attorney at Cape-based legal firm Marlon Shevelew and Associates replies:
This is a common problem unfortunately. A fixed term lease is fixed for good reason as it seeks to both protect a landlord’s investment in its property and guarantee rental for a defined period. This is imperative, especially if the rental is used towards settling the bond repayments over such property. The truth is that a landlord has every right to either reject the tenant’s request to terminate the lease and force her to specifically perform her contractual obligations in terms of the lease or alternatively accept the notice of termination and release the tenant from her lease. In the latter instance, the landlord will be entitled, in law, to claim any damages against the tenant including, but not limited to, lost rental that the tenant would have paid had the tenant remained at the premises, advertising costs, etc. The tenant could try and suggest this option and assist in mitigating the landlord’s loss by trying to help find a replacement tenant. Naturally, the choice of new tenant is entirely in the hands of the landlord and the landlord should not be saddled with any extra costs in this regard as to release a tenant from a fixed period lease is an indulgence at best .
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I may not understand the law correct, but according to the consumer protection act such a person can definitely “get out of the contract” earlier – J. Parsons The reply does not deal at all with the very important relief brought about by the new Consumer Protection Act, which is a pity and does therefore not provide a full answer. – F. van Wyk The answer that was provided is premised on non CPA leases, i.e. prior to the general effective date of 31 March 2011. The Consumer Protection Act certainly allows cancellation of a lease within the fixed period on 20 business days’ notice in the event that the lease was signed on 1 April 2011 or thereafter. Naturally, for the sake of brevity, it is not possible to deal with all the extrapolations but it is worth noting for our readers, that only tenants who are construed to be “consumers” as defined in the CPA would have the right of cancellation subject of course to a “reasonable cancellation penalty” Certain tenants are not able to avail themselves of this “20 days’ notice”, namely any commercial entity with a net value or turnover of 2 million rand or more , nor a commercial entity with a net value or turnover of less than 2 million rand in the event that its landlord happens to be a commercial entity itself. – Marlon Shevelew