Lease Agreements generally follow a time-and-tested approach. Tenant likes the property; a Lease Agreement is signed; Tenant moves in; Tenant pays their rent each month. At the end of the fixed period, Tenant elects to either renew the lease, or continue on a month-to-month. Or terminate and move out. Most people are familiar with this approach. But what happens if renewal is not a choice given to the Tenant, but rather the subject of negotiation with the landlord?
I own a small property that I leased to a business just over two years ago. I sent a notice to the tenants informing them that I was terminating the lease and they would be required to move out. I actually thought I was being generous by giving them 60 days’ notice to leave. The tenants have come back to say that they’re not moving out because they’re exercising their right to renew. The agreement says that the lease will last for two years. It doesn’t say anything about any renewal. Is it true that the tenant has a right to renew?
Previously, on the topic of the Consumer Protection Act and Lease Agreements – Part II:
We’ve ascertained that the CPA has an impact on lease agreements. But not all lease agreements. Lease agreements between legal entities are excluded from the Act, the basic premise being that they (or their Armani-clad legal team on their behalf) can hold their own during negotiations. The CPA provisions relating to lease agreements are restricted to lease agreements that are signed by individuals (like Granny – see Part I.)
Previously… we discussed the Consumer Protection Act, considered the definitions of “transaction” and “consideration”, and acknowledged, broadly speaking, the types of transactions that do not fall under the CPA umbrella. We also recognised that the CPA does, indeed, affect lease agreements. But… not ALL lease agreements. In this installment, we delve a little deeper, separating the wheat from the chaf. Or, in this case, separating those lease agreements that are covered by the CPA from those that are not.
When it comes to discussing the effect of the CPA on lease agreements, there are, broadly-speaking, three types of people:
Camp 1: Those who know exactly what I’m talking about, could probably write a thesis on the subject, and will in all likelihood stop reading at this very point. (But before you do, I just want to thank you for taking the time to read my ponderings – I really hope my previous newsletters have been of interest to you.)
With Easter having come and gone, the world’s most beloved rabbit has since hopped off to find a warm and comfortable spot to settle down for Winter. Unfortunately for the rest of us, our tasks aren’t confined to a single day in the year. Whilst digging deeper into the duvet may be the preferred choice for most, the combined demands of clients, kids and creditors ensures that hibernation is not an option. An added curse of Winter can be found in the form of Eskom. If you are in the fortunate position of being unaffected by load-shedding, you find yourself paying through the nose for every shred of heat that you can scrounge. And so it is, in a roundabout kind of way, that you may find yourself seeking warmer premises to rent for your home or office. Preferably with large North-facing windows so that the Sun may warm your frost-bitten self, without having to resort to the electric heater.