BER 210- Ch 11 : Letting and Hiring

ESSENTIALIA OF A CONTRACT OF LEASE

• A contract of lease exists when there’s consensus on:
a) The property being leased- must be determinable @ time of conclusion otherwise null and void
b) Temporary enjoyment and use is given to lessee by lessor
c) The lessee will pay lessor determined/determinable amount of compensation (rent) for the use and
enjoyment of property
• If there are no essentialia, still a valid contract , just not that of lease. Courts will determine and give effect to
the true intention of the parties
• Compensation (rent):
• Lessor and lessee must:
 Agree expressly/tacitly on amount of compensation/rent OR
 Determine formula in terms of which comp/rent can be determined OR
 Nominate a 3rd party or group to determine comp/rent
 DUTIES OF THE LESSOR
o The lessor is required to :
a) Deliver the property
b) Maintain the property (as to how it was found and kept @ beginning )
c) Provide the undistributed use and enjoyment
d) Pay taxes
o Remedies of the lessee- Where the lessor doesn’t fulfil duties= breach of contract. Lessee can use normal remedies for breach (a-c) :
a) Specific performance
• Influenced by Eng Law- SA courts were not prepared to force the lessor to deliver or maintain the property
• Recently, courts have granted the claim for specific perf more readily where other remedies aren’t practical
b) Cancellation or rescission
• If condition in which property is delivered or maintained is defective and where lessee isn’t reasonably expected to maintain it – substantial
defective performance – lessee may cancel contract
c) Claim for damages
• If lessee suffers damages because of defective delivery or maintenance of the property, they are entitled to compensation provided that the
lessor foresaw or should reasonably have foreseen such damages
d) Claims for reduction in rent
• If defective performance is not substantial enough to justify cancellation
• Lessee is entitled to reduce in rent proportion to his or her reduced enjoyment/use
e) Repair of property by lessee combined with the reduction of rent or claim costs from lessor
• Same effect of specific performance if the lessee repairs the property and claims costs from lessor
• Lessee can only do so if they have notified the lessor of the defect and has given them reasonable time to repair it
o “Huur gaat voor koop” – (lease goes before sale)
• General rule A lease contract only means the lessee has a personal right not
a real right.
• Owner stronger right Which means the lessee can’t enforce their right to
use & enjoy the property against the claim of the person with the real right of
the property.
• Eg. If property is sold during a contract of lease, the lessee can’t enforce lease
on new owner – the lessor has a claim based on breach to the lessor only
• EXCEPTION
• Roman Dutch Law = principle that the lessee of a house or a field acquires a
real right to property = Doctrine of “Huur gaat voor koop”= the new owner
becomes the lessor in place of the pervious and acquires all rights and
duties in terms of existing contract of lease
• Principals governing the doctrine (Application of the rule):
a) Where the lessee already occupies the property , HGVK applies for the entire short term
period or the first 10 years of a long term lease
b) Where long term lease was registered against title deed of property – HGVK applies in full
term of lease
c) Both A and B all subsequent rights in property are subject to contract of lease and all new
owners are bound to contract of lease
d) If a,b ,c requirements aren’t met contract will be enforceable against only :
• Persons who obtained property without payment of consideration (eg: heirs)
• Buyers and credit grantors who had knowledge of the lease at the time of transaction
e) The HGVK doesn’t apply to property expropriated (taken) by the State
f) HGVK applies to lease of land and buildings (immovable property) only
Short term lease = less than 10 years.
 DUTIES OF THE LESSEE
• Unless otherwise stated duties of a lessee are :
a) Pay rent
b) Protect and use property in a proper manner
c) Return the property in proper condition upon expiry of the lease

Lease
Lessor Lessee (sublessor)

Sublease
Sublessee
 MISCELLANEOUS ASPECTS - Sublease
• Where the lessee leases the property to another person
• It is reciprocal contract btw 2 parties sublessor and sublessee that entitles whole or partial
enjoyment and use of property , temporarily against payment (determined or determinable)
• Sublease creates normal relationship of lessor and lessee btw sublessor and sublessee
• There is NO relationship btw original lessor and sublessee
• Rights and obligations of sublessee are subject to those of sublessor, the lessor can evict
sublessee when original contract is terminated
• Original contract of lease ISN’T influenced by the sublease
• Sublessor is still liable to pay rent in their capacity
• The lessee is entitled too sublet property UNLESS otherwise stated
• Exception Rural property is used for agricultural purposes, and in terms of Placcaat 1658,
cannot be sublet without lessor’s written consent otherwise= null and void