Letting And Hiring/ Lease Flashcards
What is the significance of the Rental Housing Act, 1999 (as amended)? (3)
–Rental Housing Act, 1999 (“RHA”)
•Contract of lease need not be in writing in order to be valid BUT ito s 5(2) of the RHA, lessee / tenant = accorded right to request lessor / landlord to reduce lease to writing
Name the requirements essential to the conclusion of a valid contract of lease.
–NB General requirements for valid contract:
- Consensus
- Contractual capacity
- Possibility
- Legality
- Formalities
•Essentialia of a contract of lease
–(i) Agreement on leased property
–(ii) Agreement to provide temporary use and enjoyment (in exch for counter-performance)
–(iii) Agreement on nature and extent of counter-performance
Is it possible for the consideration due to a lessor in terms of a lease agreement to be in a form other than money? Discuss. (5)
–Uncertainty as to whether c/p must be in money
•Rural tenements: portion of produce / labour?
- Patiarian agricultural lease
•Du Preez v Steenkamp (1926)
•Zulu v van Rensburg (1996) / Jordaan NO v Verwey (2002)
– decided that it wasn’t possible to have lease agreement where lessee’s cp consists of something other than payment of rent, eg labour.
Name and discuss the 4 primary duties of the lessor in terms of a contract of lease. (12)
•CL duties of the lessor / landlord NB
–(1) Delivery of temporary use and enjoyment of leased property
•Actual or symbolic delivery (keys to a house)
•Must be delivered in the condition agreed upon / in condition it was in at time of concl of contract
–OR: if leased for a specific purpose?
•Accessories required to make it suitable for intended purpose (eg keys to a rental car)
–(2) Maintenance of the leased property
•To ensure property remains suitable for the purpose for which it was leased
–Parties can agree that lessee will maintain / that parties will share maintenance duty
•Lessee to repair wear-and-tear and minor defects
•Damage caused by lessee / by persons for whom lessee is responsible excluded from duty
•Remedies of lessee?
–Ordinary remedies for breach of contract
–Reduction of rent / lessee can undertake repairs and claim cost from lessor (BUT must give lessor reas opportunity to maintain / repair himself! NB)
–(3) “Undisturbed” use and enjoyment
•Lessor need not be the owner of property leased BUT must guarantee lessee undisturbed use and enjoyment
•Disturbance by lessor himself / disturbance by 3rd party with better title
•Ordinary remedies for breach of contract
–SP: will take form of prohibitive interdict or spoliation order
•Lawful disturbance by lessor - ?
–Reasonable inspection of leased premises
–Maintenance of property
•No third party with better title will disturb lessee’s use and enjoyment of leased property.
•Duties of lessee in case of disturbance by 3rd party?
–Inform lessor of disturbance
–Put up virile / vigorous defence (if lessor fails to act)
–Claim damages from lessor (not specific performance)
–Disturbance by third party with no / inferior title? (not covered by lessor’s duty!)
–(4) Compensation for improvements to leased property
•unproblematic where lessor’s permission was obtained and lessor agreed to pay compensation
•where permission not obtained OR permission obtained without lessor’s further undertaking to pay compensation?
–Dutch law: Placcaat of 1658 received into SA law (rural only)
–Effected with permission of lessor?
•Compensation may have been agreed to
•Where no compensation was agreed on? (UE)
–Necessary improvements - all expenses claimable
–Useful improvements - Increase in market value or costs incurred
–Effected without permission of lessor?
•May be removed during lease period / upon termination of lease (provided no damage caused)
- lessee will never have lien over leased property.
Discuss the manner in which the principle of huur gaat voor koop offers protection to lessees with reference to relevant case law. (8)
•Huur gaat voor koop NB
–Leased immovable property, when alienated, remains subject to the lease (RD law)
–Accords lessee a real right, which can be asserted vs the entire world!
–New owner becomes lessor
–Lessee protected in short-term lease
•If lessee is in occupation of the property
–Lessee protected in long-term lease (10+)
•Duration of lease if lease has been registered in deeds office
•Not registered? Lessee protected for first 10 years (provided in occupation of leased property)
–Where no occupation and no registration of long-term lease ? Lease still binding on:
•Persons who acquire the land without counter-performance (eg heirs)
•A new owner who was aware of lease at the time at which he became owner
•A new owner who succeeds the lessor in rights and obligations–
eg: L1 leases land to T for a period of 15 years. The lease is not registered. After T has been in occupation of the land for a period of 7 years ito the lease, L1 sells the land to L2 for R1.2 million. L2 proceeds to give T thirty days’ notice of termination of the lease. What is the legal position?
•Q: Is T protected under the huur gaat voor koop rule ?
–YES: unregistered long-term lease but T (owing to his occupation of the land) enjoys protection for the 1st 10 years)
»THUS: T will be protected for a further 3 years, after which he can sue L1 for breach of contract!
–L2 did give counter-performance (R1.2 million purchase price)
–If L2 was aware of the lease, L2 will be bound / obliged to tolerate the lease for the remaining 8 years of the lease period
–Genna-Wae Properties (Pty) Ltd v Media-tronics (Natal) (Pty) Ltd (1995) (A)
•Held: the lessee / tenant has no right of election as to whether or not to accept the purchaser of the leased property as the new lessor / landlords
–Spearhead Property Holdings Ltd v E&A Motors (Pty) Ltd 2010 2 SA 1 (SCA)
- Held: clauses in the lease contract which are purely incidental to the lease (as opposed to those which are central to the lease) remain valid only as against the original lessor (not the new owner) [an option to purchase the leased property = incidental to the lease]
- Dealt with as a ___________________________________
Explain the landlord’s tacit hypothec as a protection mechanism for the landlord (lessor). (8)
–(ii) Landlord’s tacit hypothec NB
•comes into operation ex lege at the moment the lessee falls into arrears with rental payments
–over lessee’s movable assets on lease premises (invecta et illata) (incl fruits and crops)
•exists only for period during which rent remains in arrears
•exists only while assets are on leased premises
•aim: gives lessor leverage to ensure the payment of arrears rent
What are the implications of section 14 of the Consumer Protection Act, 2008 for a contract of lease? (6)
•s 14 CPA – expiry and renewal of fixed-term agreements
–impacts on termination & renewal of lease agreements
–s 14 not appl to agreements concl betw juristic persons (regardless of NAV / AT) NB
–prescription of maximum periods for FT agreements by Minister
•Regulation 5: Consumer Protection Regulations (1 April 2011) NB
•24 months
•exceeding 24 months - ?
–consumer’s (lessee’s) express consent; and
–“demonstrable financial benefit” to consumer
11.When can a contract of lease to which the Consumer Protection Act applies be cancelled by the lessee? By the lessor? (5)
–cancellation right of lessee - ? NB
•despite contrary provision in contract
•upon expiry of FT / extended period, without penalty; or
•at any other time during term (20 bus days’ written notice)
–remains liable for outstanding amounts up to cancellation date
–“reasonable cancellation penalty” can be charged
»Regulation 5(2): can’t exceed a “reasonable amount” + can’t ‘negate lessee’s right to cancel’
–cancellation right of lessor - ?
•20 bus days after written notice to lessee of lessee’s “material failure” (unless lessee has rectified breach within such period)
–notice to lessee of impending expiry of FT agreement
•at least 40 but no more than 80 bus days prior to expiry
•include notice of material changes to terms if agr is renewed / continues past original expiry date
•notice of options available to lessee: continue / terminate
•even where agr clearly sets out lease term
–position following expiry - ?
•agr will continue automatically on month-to-month basis (subj to material changes)
•unless lessee requests lessor to terminate OR
•unless lessee agrees to a renewal of the agreement
