What rights does a landlord have if a tenant cancels the residential
lease, before it ends?
The tenant has the right to cancel the lease at any time (on
20 business days’ notice) in terms of the Consumer Protection Act (subject to
payment of a reasonable penalty) for premature cancellation. But
what is such a reasonable penalty or cancellation fee?
To determine a reasonable cancellation fee, the CPA
prescribes a list of factors which must be taken into consideration. These
factors include, among others:
· the
rental amount which the tenant stills owes the landlord up to the date of
cancellation;
· the
value of the lease transaction up to the date of cancellation;
· the
duration of the lease agreement as initially agreed upon by the parties;
· losses
suffered or benefits accrued by tenant because of the tenant entering into the
lease agreement;
· the
length of notice of cancellation provided by the tenant;
· the
reasonable potential of the landlord, acting diligently, to find an alternative
tenant between the time of receiving the cancellation notice and the time of
the cancellation;
· and
any general practices relating to the relevant industry.
These provisions
are not intended to penalise the tenant, but to recover any actual loss
suffered by the landlord because of the cancellation. The following costs could
apply:
§ Credit
check costs for any prospective replacement tenants (even those who are not
accepted);
§ Advertising
costs (only the actual amounts on the invoices);
§ Rental
– the exact number of days that the unit remains vacant after the tenant
vacates.
