A landlord's guide to evictions: Part 1: Lawfully cancelling a lease agreement
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In this series of articles, law firm Barnard Incorporated, who understands the delicate relationship between landlord and tenant, will delve into the practicalities of lawfully evicting a tenant.
The legal cancellation or termination of rental agreements is not that easy. Both landlords and tenants need to make sure that they understand the terms of their lease agreement and that it complies with the Consumer Protection Act (CPA) where applicable. It is always recommended that both parties seek legal advice before terminating or cancelling an agreement.
What does it mean to be in 'breach' of a lease agreement?
It is important to distinguish between 'termination' and 'cancellation' as different principles apply to each of these terminologies:
'Termination' refers to when the fixed term of the agreement comes to an end or expires and neither the landlord nor the tenant is willing to renew the agreement.
'Cancellation' is where one of the parties wants to cancel the agreement prematurely i.e., before the termination date of the agreement.
A landlord may only cancel an agreement should the tenant have materially breached the terms of the agreement. The most common form of breach by a tenant is the failure to make payment of rent and other amounts due.
Practically, a landlord would, by written notice to the tenant, note the specific form of breach and provide the tenant with a set number of days to remedy or 'make good' the breach. Should the tenant fail to remedy or 'make good', the landlord may decide to cancel the agreement.
Consumer Protection Act
A crucial question that requires answering before any steps are taken to place a tenant in breach is whether the Consumer Protection Act (CPA) applies to the lease agreement.
The CPA will only be applicable to lease agreements if they are concluded for a fixed term only i.e., for twelve or twenty-four months.
Section 14 of the CPA, which deals with the cancellation of fixed term agreements, compels a landlord to provide at least twenty business days' notice of breach before cancellation can be instituted.
It is also important to note the specific exception in the wording of Section 14(1): "this section does not apply to transactions between juristic persons regardless of their annual turnover or asset value".
The implication of this exception is that where two private companies have entered into a fixed terms lease agreement, the landlord need not provide at least twenty days' notice of cancellation but may follow the specific terms of the agreement regulating the cancellation of the agreement or otherwise provide reasonable notice of breach.
Notice of cancellation
On cancellation of a lease agreement, a landlord is entitled to immediately proceed with legally evicting the unlawful tenant.
It is a common misconception that landlords, especially residential, need to provide thirty days' notice to their tenant to vacate the leased premises. This is incorrect.
Upon cancellation of the lease agreement, the tenant's right to occupy the premises is cancelled and the tenant has no legal right to remain on the premises.
Only after the 'Notice of Breach' is sent to the tenant, and the period afforded to the tenant to remedy such breach lapses, does the landlord obtain the right to cancel the agreement. This is usually done by providing a second notice which records the cancellation and requires the tenant to vacate from the leased premises,
It is important that landlords seek legal advice throughout the process of cancelling a lease agreement. Should a landlord not legally cancel a lease agreement, the tenant, notwithstanding a notice of cancellation being delivered, could have a legal right to occupy the leased premises.
This guide was authored by the Senior Associate, Johan du Toit, and Associate Wilco du Toit of Barnard Inc.
For tailored property law assistance, please contact Johan Du Toit to arrange a consultation - johan@barnardinc.co.za / 012 001 2739
Author: Property Wheel
