Tuesday, April 19, 2011

Rental terminology simplified

The Inception date is the date agreed by the tenant and landlord when the lease will start and the tenant will take occupation of the property

The Termination date is the date agreed in advance when the lease will end and the tenant will vacate the property. In the case of a fixed term lease agreement, a period of, for example 6, 12 or 24 month term is agreed and the tenant will vacate the property at the future determined termination date. At the end of the initial term, the tenant and landlord can renegotiate a further fixed term or agree to a month-to-month lease with a calendar months’ notice.

The Cancellation date is the date when the lease is cancelled early, usually by the landlord as a result of a material breach by the tenant. Once the lease is cancelled, the landlord can demand the tenant vacates the property immediately. This demand, to vacate immediately, is usually impractical as the tenant would not have secured alternative premises and is also frowned upon by the Rental Housing Tribunal. Practically, it is more reasonable and better practise to give the tenant 2 weeks notice to vacate.

Cancellation refers to the early cancellation of a fixed term lease agreement. A landlord has the ability to cancel a lease agreement should the tenant materially breach the lease terms, such as non-payment of rent and failure to remedy the breach on demand by the landlord. The tenant now also has the right to cancel a fixed term lease agreement by giving 20 business days notice. The tenant’s right to cancel is provided in the Consumer Protection Act – but only applies to leases signed after the 1st April 2011 and the tenant would still be liable to pay a reasonable penalty.

It is important to note, should a landlord cancel a lease agreement due to the tenant’s material breach of contract and the tenant subsequently remedies the breach by settling the arrear rent, the lease remains cancelled. Should the landlord decide to allow the tenant to remain in the property, a new lease agreement would have to signed by both parties.

Eviction is a court order. Once a tenant has defaulted, the landlord has cancelled the lease, and the tenant remains in the property - the landlord at this point applies to the court for an eviction order. Once due legal process has been followed the court will grant an order of eviction. The court gives 2 dates, the first date is the date the tenant must vacate the property. The second date is the date the sheriff can forcibly remove the tenant should the tenant fail to vacate by the first date.

Spoliation refers to an act by the landlord which prevents the tenant from having peaceful undisturbed access to the property. Sometimes, when the tenant has breached the lease agreement by not paying the rent, the landlord retaliates by performing an act of spoliation to encourage the tenant to make payment or vacate the property, for example the landlord disconnects the utilities, locks the tenant out of the property, removes the front door etc. The tenant can apply to the court for an urgent interdict to prevent the landlord from this type of behaviour. The courts take the act of spoliation very seriously and will often hear the matter on the same day. Courts have also been known to order the landlord to pay all the tenant's legal costs.

Criminal offence: In terms of the Rental Housing Act, which regulates residential rentals, it is a criminal offence for the landlord (or his agent) to lock a tenant out of the property or disconnect utilities. (Only a service provider such as Eskom, City Power or the Municipality may disconnect utilities for non-payment).

1 comment:

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