The Contract of Lease
A “contract of Lease” is a reciprocal contract in which one party the lessor
undertakes to to make temporary available to another party the lessee the
use and enjoyment of a thing, wholly or in part in return for the payment of a
sum of money or a share of the fruits
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Both parties have rights & duties in terms of the contract.
Also gets called a rental agreement or contract of letting and hiring.
The Essentialia of a contract of lease
1. An undertaking by the lessor (Mr A) to give the lessee (Mr B) the use
and enjoyment of something (the flat)
2. An agreement between the lessor(Mr A) and the lessee (Mr B) that the
lessee’s (Mr B) right to use and enjoyment is to be temporary
3. An undertaking to pay rent – a sum of money- or share in the fruits of
the property in return for the use and enjoyment which he or she will
receive.
The formation of a contract of lease
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There are no formalities required for the conclusion of a valid contract
of lease.
Certain Act require it to be in writing.
Long lease must be registered against the title deeds of the land let to
be valid for more than ten years.
Rights & Duties of the Lessor and the Lessee
3 Duties of the Lessor
1. The duty to maintain the thing let in proper condition
Lessor must make sure that object is in a good condition and maintain it in
that condition. Must allow for normal wear and tear.
2. The duty to ensure the lessee’s undisturbed use & enjoyment
Lessor must warrant that no one has the right to disturb the lessee’s use and
enjoyment of the property.
3. The duty to deliver the object let to the lessee
If someone rent property from a specific date onwards, it’s the Lessors
responsibility to make sure it is available from the day agreed upon onwards.
Duties of the Lessee
1. The lessee’s duty to pay rent:
 Payment of rent is an important part of a contract of lease.
 Date to pay the rent must be negotiated between the Lessor and
Lessee
 Breach can be in two ways , default in payment or can repudiate
liability for rent
 Remedy for repudiation or mora debitoris
2. The lessee’s duty of proper use & care of the object let
 The object let may not be used improperly or unreasonably.
 Must be maintained in a good condition and only used for the purpose
it was leased for.
3. The lessee’s duty to return the property undamaged on termination of
lease
 The lessee must return the object in same conditioned he got it. Any
damage must be repaired
The right of the Lessor
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Non Payment of rent
o Parties need to agree on including the cancellation clause.
o Can be orally, but better to get the clause in writing.
o The clause give the lessor permission to cancel the rental
contract on breach.
The Lessor’s tacit hypotec for unpaid rent
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The lessor can keep all movable property of the lessee as security if the
lessee falls behind with his payments.
Serves as security
Operative only when and for as long as the rent is in arrears
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Misuse of property
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o Contractual remedy that will be used by the Lessor will depend
on whether the misuse of the property is material or not material.
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Failure to return the property
o A lessee who remains in occupation of the lessors property after
the lease has expiredcommits the delict of unlawful possession of
another’s property as well as breacjh of contract.
o The normal contractual remedies will again be at the disposal of
the lessor.
The right of the Lessee
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Failure to deliver
o Breach like this is material and the lessee can sue for damages.
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Failure to maintain the property
o Breach like this is material and the lessee can sue for damages.
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Breach of warranty against interference
o Lessee can get an interdict against the lessor if he disturb the
lessee’s privacy while leasing property. He can also claim
damages.
o If the leased property get destroyed by vis major (Act of God)
the lessor and lessee has no claim against each other.
o If the leased property get destroyed by casus fortuitus (Act of
state) the lessor and lessee has no claim against each other.
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Subletting
o It all depends what is agreed upon in the contract between the
Lessor & Lessee.
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Cession
o A lessee may cede his or her rights to a third party unless the
contract prohibits or restricts this right
Assignment
o If there is a complete substitution of one lessee for another it must
be effected by a combined cession and delegation. This is
termed an assignment.
Termination of a Lease
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Termination by effluxtion of time
o If the lease was only for a specific period, the contract end when
it expired.
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Termination by notice
o If there is no specific end date, the lessor or lessee can give a
notice to end the contract.
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Termination by death
o Lease is terminated by the death of the lessor or lessee if the
contract so provide
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Termination by Insolvency
o If a person go insolvent, the contract will get terminated.
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Termination by extinction of the lessors title
o If the lessor is unable to continue giving the lessee the
undisturbed use and enjoyment of the thing because his title to it
is extinguished it may lead to termination of the obligations
arising to from the lease by supervening impossibility of
performance.
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The lessee’s right to compensation for improvements
Agreement on the rights of the lessee to remove improvements and his
claim to compensation if improvements are not improved
Renewal of a lease
A contract of lease may be renewed, a new contract or lease is concluded
between the lessor and lessee and starts immediately upon termination of
their existing lease.