Cancelling a residential lease agreement contract | Everything Property

Cancelling a residential lease agreement contract

lease agreement

It is not always possible to see out the full term of your lease agreement and there may come a time when you need to cancel it for whatever reason. Not following the correct procedure can, however, be costly, says Seeff Centurion manager Tiaan Pretorius.

Cancellations of residential lease agreements are governed by the Consumer Protection Act (CPA) and the Rental Housing Act (RHA).

Seeff Sandton rentals manager Rochelle Holland advises that in the case of a fixed-term natural lease the tenant may cancel by providing 20 business days’ notice subject to a reasonable penalty fee. In the case of a month-to-month lease, a calendar month’s notice of 30 days can be provided by either party.

Pretorius says that, provided the cancellation is done correctly, the landlord must accept it and cannot insist on the balance of the rental payments for the rest of the lease period, but would be entitled to reasonable cancellation costs.

This would include loss of rental income between the current tenant leaving and a new tenant starting their lease plus procurement costs of a new tenant, including advertising expenses. He says it is advisable that this is provided for in the initial lease agreement to avoid issues arising.

The landlord also cannot withhold the deposit if the cancellation is done correctly, unless there is property damage caused by the tenant. Pretorius recommends that in addition to a maintenance fund, the landlord should keep a reserve to cover the unlikely case of a property standing vacant while waiting for the next tenant.

Seeff Randburg rentals manager Detmar Nuttall says tenants must read their lease agreement carefully and ensure they understand all the conditions and responsibilities including what costs may be applicable.

There are various ways in which landlords can protect themselves against potential losses due to cancellation. Pretorius says an experienced rental agency can provide a lease agreement that protects their interest and complies with CPA and RHA regulations. This can ensure that situations such as a cancellation cost as little as possible, or could even be a nonevent if a replacement tenant is found quickly.

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