Expiry and Renewal of Property Leases

What follows applies to an individual tenant. The provisions pertaining to the expiry and renewal of fixed-term agreements do not apply to transactions between juristic persons regardless of their annual turnover or asset value.

In terms of section 14 of the Consumer Protection Act:
  • Lease agreements have a maximum duration of 24 months, and once expired, will continue on a month-to-month basis unless a new lease is signed;
  • A tenant can arbitrarily cancel the lease agreement (of any term) at any time, provided he gives the landlord written notice at least 20 business days prior to the intended date of cancellation;
  • If the tenant cancels the property lease prematurely, he remains liable the landlord, for any amounts owed to him in terms of the lease up to the date of cancellation and the landlord may impose a reasonable cancellation penalty (that he and the tenant may agree to, or the Minister of Trade and Industry may prescribe, or a court of law may determine);
  • The landlord may also cancel the lease at any time if the tenant has committed a material breach of the agreement. The landlord must give him written notice of a material failure and invite him to comply with the lease. If he fails to remedy the breach within the time stipulated in the demand, the landlord may cancel the agreement within 20 business days after giving the written notice, unless the tenant has rectified the failure in that time;
  • In the event that neither landlord nor the tenant prematurely terminate the lease and the agreement runs its course, it will be automatically continued on a month-to-month basis unless the tenant expressly directs the landlord to terminate the agreement on the expiry date or agrees to a renewal of the agreement for another fixed term;
  • The automatic renewal of contracts is only permissible where the landlord has given the tenant a written notice of the impending renewal. This notice must be given not more than 80 business days and no less than 40 business days before the intended date of cancellation. Where such notice is given, the landlord must also notify the tenant of any material changes to the lease and the options the tenant has. Where a tenant does not agree to the renewal of the property lease or does not direct the landlord to terminate the agreement, the agreement shall continue on a month-to-month basis.