This clause deals specifically
with the provisions of section 14 of the Consumer Protection Act 68 of 2008
(“the CPA”)and stipulates that a Tenant is entitled to cancel a Lease Agreement
at any time during the subsistence of the Lease Agreement, for any reason, on
20 (Twenty) business days notice to the Landlord or Agent, subject to a
reasonable penalty.
There are guidelines insofar as calculating what
constitutes a “reasonable” penalty, as contained in Regulation 5 to the CPA,
but these guidelines are not definite and still need to be interpreted by the
Courts. It is for this reason that clause 1.28 is so important, because it
allows the parties to agree from the outset what will constitute a reasonable
penalty in the event that the Tenant cancels and therefore avoid a dispute. TPN suggests
between 1 (One) and 3 (Three) months’ Rental, depending on the amount of time
still due to elapse in terms of the Lease Agreement.
Obviously, if a new Tenant
can be found before the existing Tenant vacates, then the clause stipulates
that “reasonable” will be deemed to be the advertising costs and the commission
due to the Agent. This clause is important, because it protects the Agent
against what normally otherwise ends up being a sticky situation. For obvious
reasons, this clause does not appear in the non-CPA compliant Lease Agreement.