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. Failure to remedy the breach in the stipulated time period, will entitle the innocent party to cancel the lease and (where relevant) claim damages suffered from the offending party.”

A tenant has the RIGHT to cancel a lease agreement, be it in the 1st month, 4th month or second-to-last month of the lease agreement. He cannot be ‘punished’ for doing this and the cancellation does not constitute a breach of the lease agreement.

What must an agent do if a tenant decides to cancel?

1. Obtain the cancellation in writing from the tenant.
2. Ensure the cancellation gives the requisite 20 business days’ notice.
3. Charge rental until the end of the 20 business days (even if this is not a full month’s rental).
4. Log on to TPN and end the lease as at the end of the 20 business days.
5. Keep in mind the lease now ends as at the end of that 20 business days.
6. Should the tenant remains in the premises a new lease MUST be signed as once cancelled, a lease cannot be revived at law. If you fail to do this, you essentially have no long-term lease in place.
7. Begin advertising the property immediately- the onus is on the agent/landlord to find a replacement.
8. Keep all invoices from the advertising as this is one of the costs you may pass along to the tenant in terms of a ‘reasonable cancellation penalty’.

What can an agent charge the tenant that cancels early?

The idea behind this reasonable cancellation penalty is not to penalise the tenant, but to recover any actual loss suffered by the landlord as a result of the cancellation. The following cost could be applicable:

• Credit check costs for any prospective replacement tenants (even those who are not accepted);
• Advertising costs (only the actual amounts on the invoices);
• Rental – the exact number of days that the unit remains vacant after the tenant vacates.

It is important to keep in mind that all calculations of the penalty can only be made once a replacement tenant has been found. It must also be kept in mind that where a tenant cancels, for example, in month 10 or 11 of a 12-month lease, you cannot charge the tenant the full remainder of the lease as this would negate the cancellation. The principles behind cancellation penalties lie in our law of undue enrichment. A landlord/agent cannot make a financial gain or benefit off of a tenant’s cancellation.

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)

References:

http://www.privateproperty.co.za/advice/property/articles/how-to-cancel-a-residential-lease/3315    http://www.melcoproperties.co.za/template/ArticleDisplay.vm/articleid/2243

The post Cancelling a lease agreement early appeared first on Schnetler's Inc.

As stressful and time-consuming as moving might be, it can also be exciting as you are moving on to better and greater things. However, as a tenant, there are certain things that you need to keep in mind before you move into your new dream home:

Lease agreement:

You’ve thought about moving for some time, and finally decided it’s time to move out of your current home. But first, make sure to review your lease agreement and familiarise yourself with all the terms and conditions therein. For example, it’s very important to know how long your required notice period is. Once you have familiarised yourself with all the terms and conditions, you will have a much better understanding of what is expected of you before you move out.

Letting your landlord know:

Most lease agreements stipulate that a tenant must give at least one month’s written notice before moving out. So, make sure to prepare your notice and communicate this to your landlord within the appropriate timeframe. In your notice, you can stipulate what date you will be moving out, what you might need in order to restore the property to its original state and you can request your deposit. However, if you plan on cancelling your lease early, make sure to request and receive permission from your landlord prior to moving out. If you don’t do this, legal action can be taken against you.

Inspect the property and fix any damages caused by you:

Depending on your lease agreement, you could be the one responsible for returning the property to its original state before you move out. That is why it is so important to be familiar with the terms and conditions found in your lease agreement. You need to inspect the property and look for any damages that could have been caused by you or damages that occurred while you were occupying the property. Make sure to take care of these damages, otherwise, your landlord could keep your deposit or only pay back a portion of it in order to pay for repairs.

Sort out all accounts linked to your property:

Before moving into your new home, make sure that all accounts linked to your previous home have been cancelled or moved and that you do not owe anything. These accounts include electricity, water, Wi-Fi, TV subscriptions etc. Also, ensure that all your service providers are aware of the move and provide them with your new address.

As a tenant, your home was never really yours, however, it remains your responsibility to ensure that the property is restored to its original state. Think to yourself, “Would I be happy if I received the property in this state?” It is recommended not to overlook these steps, as it will help to make the whole moving process run a lot smoother and you will get your deposit back quicker. It’s a win-win situation for both the tenant and the landlord.

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)

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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 indicate 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.

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).

References:

• https://www.privateproperty.co.za/advice/property/articles/how-to-cancel-a-residential-lease/3315
• http://www.schindlers.co.za/how-to-cancel-a-residential-lease/
• https://www.privateproperty.co.za/advice/property/articles/terminating-your-lease-agreement/3551

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