Tag Archives: Lease agreement

Cancelling a lease agreement early

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B4If you want to end your contract early, this can only be done “in situations where the Consumer Protection Act or Rental Housing Act apply” – or if 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. 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.

References:

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)

 

Is the tenant or landlord responsible for the water leaks?

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B4Questions, and sometimes disputes, often arise between landlords and tenants regarding where the responsibility lies with the maintenance of a property. The simple answer is that tenants can generally only be held responsible for repairs/replacement on the property if the damage was caused by the tenant’s actions, or items that have a short life span, such as light bulbs.

On the other hand, alarm systems, auto gates and doors, locks, fixtures and fittings, appliances, or anything provided to the tenant are generally the responsibility of the owner to repair, unless damaged by the tenant.

Fair wear and tear

Damage due to fair wear and tear is the owner’s responsibility to correct. This includes situations where the property has, over time, experienced wear due to its use or age.

Examples would include:

  1. Fireplace chimneys: The landlord should maintain the fireplace e.g. having the chimney cleaned at appropriate intervals. Gardens, however, would require the tenant to do general maintenance.
  1. Blocked drains: This is usually due to tenant usage making it the tenant’s responsibility, but if blockage is due to tree roots, it would be the landlord’s responsibility.

Regarding appliances, as with any fixture or fitting, the landlord is responsible for repairs to appliances provided under the tenancy agreement unless the damage was caused by the tenant’s deliberate actions or negligence.

Tenants should report any damage on the property. If they fail to do this, they could find themselves held liable for any further damage due to lack of immediate attention to the initial problem. Furthermore, tenants are obliged to provide access for contractors to effect repairs.

Conclusion

If there is a water leak on the property, it would most likely be the landlord’s responsibility to fix. It is advisable for tenants to read and understand the lease agreement fully and for landlords to list as much as possible that needs to be maintained by the tenant. For example, if the unit has a garden that the tenant is responsible for maintaining, this should be mentioned in the lease.

Reference:

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)