Rental Lease Breach & Cancellation: What You Need to Know
The The Property Perspective is a weekly radio show on 919 FM, airing every Tuesday at 4:15 PM with Al and Lesedi on The Drive Train.
Episode 8 | The Property Perspective with Etchells & Young
A residential lease is a contract, and both landlords and tenants have responsibilities they agree to when they sign it.
In Episode 8 of The Property Perspective on 919 FM, Harry explains what constitutes a breach of a rental agreement, when a breach can lead to cancellation and what landlords and tenants should understand about early lease termination.
In This Episode
Harry takes listeners through some of the practical issues that arise when either party does not meet their obligations under a rental agreement.
Harry discusses:
Why a lease agreement should be treated as a proper contract
The difference between a breach and a cancellation
Common ways landlords and tenants can breach a lease
Why a breach does not automatically cancel the agreement
Early cancellation by a tenant
How a reasonable cancellation penalty may be determined
The importance of finding a replacement tenant
Viewings, reasonable access and a tenant's right to privacy
Watch Episode 8
The Property Perspective airs weekly on 919 FM.
Breach and Cancellation Are Not the Same Thing
Harry explains that a breach occurs when one of the parties fails to meet an obligation contained in the rental agreement.
Failing to pay rent on time is one obvious example, but a landlord can also fail to meet their obligations under a lease.
A breach does not necessarily mean that the lease immediately comes to an end. The party in breach will generally need to be notified of the problem and given an opportunity to remedy it in accordance with the lease and applicable law.
Can a Landlord Breach the Lease?
Yes. Harry uses the example of a serious maintenance issue that a landlord fails to attend to after being notified.
If water is pouring through a light fitting, for example, simply ignoring the problem could affect the tenant's safe and beneficial use of the property.
The important point is that both parties have obligations under the agreement. The lease does not exist only to regulate what the tenant must do.
Can a Tenant Cancel a Lease Early?
Harry discusses the rights available to tenants when cancelling certain fixed-term lease agreements before the agreed end date.
Early cancellation does not necessarily mean that the tenant can simply walk away without any financial consequences.
Depending on the circumstances and the terms of the agreement, a landlord may be entitled to impose a reasonable cancellation penalty.
What Is a Reasonable Cancellation Penalty?
The word "reasonable" is important.
Harry explains that the purpose of a cancellation penalty should not be to punish the tenant or simply charge all of the remaining rental that would have been payable under the lease.
Instead, the circumstances of the cancellation and the actual loss experienced by the landlord need to be considered.
This may include the period during which the property remains vacant while a replacement tenant is being found and other reasonable costs associated with the early cancellation.
The Landlord Should Also Try to Limit the Loss
Harry explains that a landlord should make a genuine effort to find a new tenant rather than simply allowing the property to remain vacant and expecting the departing tenant to carry the entire loss.
This also means that the outgoing tenant should cooperate with reasonable attempts to market and show the property to prospective tenants.
The sooner a suitable replacement tenant is found, the smaller the potential loss may be.
When Restricting Viewings Can Become Costly
Harry shares an example from a matter that went before the Rental Housing Tribunal.
The tenant cancelled near the end of the lease but then made it very difficult for prospective tenants to view the property.
Harry explains that once reasonable access became available, a replacement tenant was found, but the landlord had already suffered a period of lost rental.
The example highlights why cooperation from both landlord and tenant can make the early-cancellation process considerably smoother.
What Is Reasonable Access for Viewings?
When a tenant is approaching the end of a lease, the property normally needs to be shown to prospective replacement tenants.
That does not mean the tenant should be expected to make the property available at any moment without notice.
Harry explains that both sides need to be reasonable. Completely refusing viewings can create problems, but so can expecting a tenant to accept constant or last-minute interruptions.
Where possible, agreeing on suitable viewing periods or grouping several viewings together can make the process easier for everyone.
Tenants Still Have a Right to Privacy
A rental property may belong to the landlord, but while the tenant is lawfully occupying it, privacy still matters.
Harry explains that access should therefore take place on reasonable notice rather than agents or landlords arriving unexpectedly whenever someone wants to view the property.
Clear communication and agreed viewing arrangements can help balance the landlord's need to market the property with the tenant's right to enjoy their home.
A Key Takeaway
A lease may be cancellable, but it should never be treated as though it has no consequences.
Both landlord and tenant have rights and responsibilities, and when something goes wrong, the correct process matters.
Clear communication, proper notice and a reasonable approach to resolving the situation can prevent a manageable lease issue from becoming a much bigger dispute.
What Is The Property Perspective?
The Property Perspective is Etchells & Young's weekly property segment on 919 FM.
Each episode explores a different aspect of property - from rentals and property management to buying, selling, legislation, sectional title living and the everyday questions property owners and tenants face.
Follow the series as we unpack more of the issues that matter to Johannesburg property owners, buyers, sellers, landlords and tenants.
Managing a Rental Property?
A properly managed tenancy involves much more than collecting the monthly rental.
From compliant lease administration and tenant communication to inspections, rent collection and ongoing property management, Etchells & Young helps landlords manage the practical details throughout the tenancy.
