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WCLawyer
WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 14813
Experience:  L.LB (UOVS)
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Hello, its been 7 month on a 5 year commecial lease agreement.

Resolved Question:

Hello,

its been 7 month on a 5 year commecial lease agreement. The leave agreement is silent on termination. Things are not going as expected and i have not received much cooperation from the landlord and i would like to terminate the lease agreement. what will i be liable for?
are there any penalties?

regards

Sonia
Submitted: 1 year ago.
Category: South Africa Law
Expert:  WCLawyer replied 1 year ago.
Good day.

This is an info request to assist you better. Please continue on this thread.

Did you contract as a CC or a Pty Ltd or in your own name?
Customer: replied 1 year ago.


contracted as a Pty ltd

Expert:  WCLawyer replied 1 year ago.
The Consumer Protection Act with regards XXXXX XXXXX termination would not be applicable, because you contracted as a juristic person, unfortunately.

The landlord will be able to hold you to the full term of the agreement unless any of the following happens:

1. The landlord commits a material breach of the terms of the agreement. If your contract contains a clause that state that any breach would be a material breach, then that question (whether the breach is material) need not be addressed. All that you need to prove is that there was a breach. In the absence of such a clause, you would have to prove the breach as well as the fact that the breach is material. A breach is material if it goes to the core of the agreement. For instance, if the landlord does something to the property that result in you not being able to use the property for the purpose that you have rented it.

2. The landlord gives you permission to cancel (if there is no breach). He can dictate the terms of such a cancellation and that would actually be an agreement ancillary to the lease agreement. It would contain terms that would indicate that he is amenable to the cancellation, on condition that you, for instance, pay a three month cancellation penalty or something to that effect.

I hope this helps you a little bit, but if you have any further questions, feel free to ask them before you rate. It will not cost you anything extra. If you are satisfied with the answer, kindly click on one of the five faces on the ratings page. I don't get anything for this answer unless you do.

Customer: replied 1 year ago.


thank you for the answear. is it normal for the lease agreements to be silent on termination clauses?


 


when we signed the lease agreement we did not know what the procedures, penalties were going to be in the case of a early termination.


 


What if the Land lord wanted to have an early termination, what would be the penalties on his side? i have reasons to suspect that he is in conversations with other company to lease the premisis.

Expert:  WCLawyer replied 1 year ago.
Early termination clauses is a new thing and is mainly because of the Consumer Protection Act coming into effect in 2011. This is, however, normally contained in residential lease agreements, since section 14 of the act, which deals with early termination of a fixed agreement, excludes itself from operation where both consumer and landlord are juristic persons.

The whole idea with a fixed agreement is to keep you to that agreement for a fixed term. You are, therefore, not entitled to terminate the lease agreement early, unless there is a breach. If there is no breach, you are at the mercy of the landlord, I am afraid. He may or may not agree to the cancellation, but again, you are not entitled to demand that you be allowed to cancel.

So, when you signed the agreement, the landlord did not contemplate that you will terminate early and that is why there is no penalties or whatever set out in the agreement. There is also no obligation on him to include such a clause, since he can expect you not to cancel.

So, whatever penalties is to be levied, will be levied in terms of a cancellation agreement, to which you can agree to the terms or not. If you don't agree to those terms, then the lease agreement will continue. If you do, the lease agreement will cease to exist and the cancellation agreement will replace it.

I hope this makes sense?
WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 14813
Experience: L.LB (UOVS)
WCLawyer and other South Africa Law Specialists are ready to help you

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