You will notice that clause 6 in the CPA compliant Lease differs
from clause 6 in the non-CPA compliant Lease Agreement. The reason for this is
that in the CPA compliant Lease, one needs to take into account the provisions
of section 14 of the CPA. These provisions can seem complicated, but in a nutshell
are quite simple. In the event that the Tenant is a NATURAL PERSON (The
provisions of section 14 do not apply to juristic entities, regardless of the
threshold values, hence these provisions will only apply where the Tenant is an
INDIVIDUAL) then:
The Landlord may cancel the Lease on 20 (Twenty) Business
Days’ notice to the Tenant in the event that the Tenant is in breach of its
obligations in terms of the Lease.
The Tenant may cancel the Lease at any time on 20 (Twenty) Business
Days’ notice to the Landlord, subject to a reasonable penalty.
When the Initial
Period of a Lease comes to an end and the Tenant has not communicated the
desire to either renew or terminate the Lease, the Lease will automatically continue
on a month to month basis. The implication of this is that the Lease will no
longer be deemed to be a fixed-term contract and will rather be a periodic
lease. As such, section 14 of the CPA will no longer apply, the 20 business
days’ notice provision will fall away and either party may cancel the Lease on
one Calendar Month’s notice to the other party. Alternatively, the Tenant may
communicate the desire to terminate the Lease upon expiry of the Initial
Period, or to renew the Lease for a further fixed-term period.
Given that section 14
obviously does not apply to the Non – Consumer Protection version of the Lease,
this Lease provides only that the Lease will terminate on the Termination Date
unless terminated earlier by the Landlord. There is no provision for the Tenant
to cancel the Lease early.
Finally, clauses 5.5 and 5.6 of both versions are essential
clauses. In the event that a Tenant refuses to vacate the Premises, the Tenant
will be obliged to make payment of Rent for the period that the Tenant
continues to inhabit the Premises BUT this will not preclude the Landlord from
instituting eviction proceedings against the Tenant. Thus, the Tenant will not
be able to raise the fact that it is continuing to make payment of Rent as a
defence in any litigation proceedings which obviously strengthens the position
of the Landlord.