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Cancelling your lease agreement? This is what you need to know

By Opinion Time of article published Jan 26, 2021

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By Raeesa Ebrahim Atkinson

When we speak of lease agreements, most people make the automatic deduction that we are speaking of the renting of immoveable property. However, there is a distinction between residential and commercial lease agreements.

Commercial lease agreements relate to when a property is leased for the purpose of carrying out business at that location. Whereas residential lease agreements refer to when a property is leased for the purpose of residing in it or in other words creating a home. The distinction lies in the underlying purpose of the agreement or use of the property.

There are further sub-distinctions such as the leasing of a flat vs leasing of a house or leasing through an agent vs leasing through the landlord directly. However, for the most part the key distinction which may affect the manner of cancellation, is between commercial and residential lease agreements.

When May A Lease Be Cancelled?

There is no real given scenario as to when a lease may be cancelled. A lease will come to its natural end at the end of a lease term; when a party has elected not to renew or where renewal was not an option.

Usually when we speak of cancelling a lease, we are talking about early termination. Early termination refers to requesting for a lease to end any time before the end of the lease term indicated in the contract.

A lease may also be cancelled where a party is in breach of their obligations under the lease, such as in the case of non-payment. If a party has been given notice to remedy such brief and has not remedied it by the end of the notice period, then the other party will be entitled to cancel the contract.

Methods of Cancelling a Lease

The first point of reference is the actual lease agreement or contract. Ordinarily, these agreements will have specific clauses in respect of the possibility of early termination or in some instances, exclusions where early termination will not apply.

If a contract allows for early termination. It is important to strictly follow the relevant method of termination highlighted in the contract in order to properly terminate. Pay attention to notice periods and also the manner in which such notice must be given.

If a contract is silent on early termination, there is an argument to be made that the agreement or contract may be cancelled under Section 14 of the Consumer Protection Act 68 of 2008, as amended. This can however be difficult and technical and it is important to seek legal advice in respect of same.

If a party is cancelling due to breach, most contracts have specific breach clauses which dictate the process. However, cancellation of an agreement is an ordinary remedy available for breach.

Generally, the party who is alleging breach would be required to give notice for such breach to the guilty party, the notice period will be afforded as time in which the party may remedy the breach and if the breach is not remedied within this time then the party alleging breach may cancel the contract.

Agreements entail binding obligations on the parties involved. It therefore, goes to say that the cancelling of agreements has serious consequences for the contracting parties and it is important that the correct process is followed in each instance so as avoid possible disputes. It is definitely recommended that parties seek legal counsel and advice when cancelling a lease agreement.

Raeesa Ebrahim Atkinson is an assistant attorney at Attorney at SchoemanLaw.

PERSONAL FINANCE

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