COMPILED BY: CLAYTON MUTSENEKI

COMPILED FOR: COMMERCIAL LAW TUTORIALS

LEASE AND OCCUPANCY ASPECTS

SECTION 1 - INTRODUCTION: DEFINITION, ESSENTIALS AND

FORMALITIES OF A CONTRACT OF LEASE

i. Definition
ii. Essentials of a contract of lease
iii. Formalities and the parties

SECTION 2 - THE LESSOR’S OBLIGATIONS AND THE LESSEE’S REMEDIES

i. The obligation to deliver the thing let to the lessee free from
impediments and in a fit condition for the purpose leased.
ii. The obligation to ensure the lessee’s undisturbed use and
enjoyment of the thing let.
iii. The obligation to pay the rates and taxes.

SECTION 3 - THE LESSEE’S OBLIGATIONS AND THE LESSOR’S REMEDIES

i. Introduction
ii. The obligation to pay rent
iii. The obligation to take proper care of the property and use it only for
the purpose for which it was let.
iv. The obligation to restore the property on termination of the lease in
the same good order and condition as it was when it was received.

SECTION 4 - THE LEGAL POSITION OF THE LESSEE: SUBLETTING,

CESSION, ASSIGNMENT, HUUR GAAT VOOR KOOP

i. Introduction
ii. Subletting
iii. Cession
iv. Assignment
v. Huur gaat voor koop
SECTION 5 - TERMINATION OF A LEASE AGREEMENT

i. Introduction
ii. Termination by effluxion of time
iii. Termination by notice
iv. Termination by death
v. Termination by insolvency
vi. Lessee’s right to compensation for improvements

SECTION 6 - RENEWAL OF A LEASE

i. Introduction
ii. Express renewal
iii. Tacit renewal

SECTION 1: INTRODUCTION: DEFINITION, ESSENTIALS AND

FORMALITIES OF A CONTRACT OF LEASE

i. WHAT IS A LEASE AGREEMENT

A lease is, in the first instance, a contract. The agreement must therefore also
comply with the requirements for contracts in general, namely consensus,
contractual capacity, legality, physical possibility of performance and formalities.

1st Definition
It is trite that a lessee is entitled to full use and enjoyment of the property
during the full term of the lease. The respondent is therefore under a duty to
deliver and maintain the property in a condition reasonably it for the
purpose for which it has been let. The duty includes the obligation that lessees
shall not be exposed to any unnecessary risk to life or property and that lessees
shall occupy the premises with safety.”1

1 Satchwell J (in Mpange and Others v Sithole 2007 (6) SA 578 (W) at 587)
Satchwell J (in Mpange and Others v Sithole 2007 (6) SA 578 (W) at 587)

2nd Definition
A lease of things is a reciprocal agreement in terms of which one party, the lessor,
undertakes to confer upon another party, the lessee, the temporary use and
enjoyment of a particular thing (res) in exchange for a counter-performance.2

3rd Definition
A lease is a contract between two persons, the landlord (or lessor) and the tenant
(or lessee), for the letting by the former and the hiring by the latter, of specified
immovable property, in terms of which the landlord grants the temporary use and
occupation of the property to the tenant for a period in time in return for a specific
sum of money (or a share in the proceeds or fruits of the property) called rent.3
Kessler v Krogmann 1908 TS 290; De Jager v Sisana 1930 AD 71

General
‘A contract of letting and hiring of a thing (or a lease) is a reciprocal agreement
between the lessor and the lessee, in terms of which the lessor binds him- or herself
to give the lessee the temporary use and enjoyment of a thing, wholly or in part,
and the lessee binds him- or herself to pay a sum of money as compensation for
that use and enjoyment.’
From this definition, it is clear that there are two essentials of a contract of
lease. These can be
summarised as follows:
a) An undertaking by the lessor (the person who lets) to give the
lessee (the person who hires) temporary use and enjoyment of a
thing;

2 CJ Nagel (ed).Commercial Law (6th ) ed.Cape Town. LexisNexis (Pty) Ltd, 2019 , p
249.
3 Kessler v Krogmann 1908 TS 290; De Jager v Sisana 1930 AD 71
 b) An undertaking by the lessee to pay a sum of money in return for
the use and enjoyment which he or she will receive (i.e. an
undertaking to pay rent).

ESSENTIALS OF A CONTRACT OF LEASE

Apart from the general requirements that a lease has to comply with, the parties
must reach consensus on three further aspects, namely:
(a) the leased property;
(b) that the use and enjoyment of such property be conferred only temporarily; and
(c) the nature and extent of the counter-performance (i.e. the rent) to be delivered.

It is a contract between the landlord/landlady or a duly authorised agent and the

tenant to allow the tenant temporary use and enjoyment of the dwelling. This
agreement can be done: -
• in writing, or
• parties may orally agree to the terms and conditions of the lease
contract
• it could also be partly written and partly oral
Whether the lease is in writing, concluded orally or partly written and
partly oral, parties have to agree:-
• on the rental to be paid in respect of the dwelling let
• which dwelling is to be occupied and
• the period of the lease.
To put it another way, there is no lease: -
• when there is no agreement regarding the exact amount of
money to be paid as a rental;
• if parties fail to confirm the dwelling the tenant is to occupy for her or his use and
enjoyment and
• if the lease period is undecided.
1. TEMPORARY CONFERMENT OF POWER OF USE AND ENJOYMENT
The parties do not intend the tenant to have the use of the property permanently,
but only for a fixed period. The intention can be communicated either explicitly or
implicitly.

The parties must agree that the use and enjoyment of the property shall be
relinquished to the lessee only temporarily. It is important to bear in mind that the
lessee acquires only the entitlements to use and enjoy the property and not the
entitlements to consume or to destroy it. Any agreement in terms of which the
lessee acquires the power to diminish, consume or alienate the property is therefore
not a lease. Parties thus cannot conclude a lease in terms of which, for example, one
party acquires the right to remove clay, stone, salt or minerals from the premises
[Uitenhage Divisional Council v Port Elizabeth Municipality 1944 EDL 2].4

As the use and enjoyment of the property are conferred only temporarily, a property
cannot therefore be let in perpetuity. The duration of the lease may assume
different forms, as the following examples illustrate: the lease can run from one
specific date to another, from a fixed date for a specific period, from the
commencement of an event for a specific period or until the occurrence of a certain
event, for example, the death of a particular person (it is certain that the event will
occur, but uncertain when). It is also possible to conclude a lease for as long as the
lessor or lessee should desire. Yet a further possibility, which is fairly common, is to
conclude a lease on a periodic basis, in other words, from day-to-day, month-to-
month or year to- year.

‘by the lessor’

The lessor need not necessarily be the owner. He or she could for example be
leasing the property from the owner and sub-leasing to another. The lessee
therefore cannot attack the contract on the basis of the lessor's lack of title if the
latter has delivered and continues to deliver the use and enjoyment of the property.

4 Uitenhage Divisional Council v Port Elizabeth Municipality 1944 EDL 2

In Sby G.M.CO v Klipriviersberg Estate & G.M. Co 1893 Kotze5CJ commented
on this principle as follows:

‘By the law of this country any person can let to another something which belongs to
a third party, and it is not open to the lessee to raise the defence that he has
discovered that the lessor had no right to enter into a contract of lease with him, or
that the property leased belongs to another person, where, for instance, he is,
during the currency of the lease, sued for the payment of the stipulated rent.’

In a later case, Clarke v Nourse Mines Ltd 1901 TS 512 at 520-5216, Solomon
J followed this approach on the basis that one must pay for what one has contracted
for and received and that it is against good faith to attempt to use the law to avoid
payment in such circumstances.

Thus, while the lessor does not need to be the owner of the thing let, he or she
must guarantee that the lessee will have undisturbed use and enjoyment of the
property. If the lessor is unable to do so, then he or she may be in breach of
contract and may be liable for damages.

2. NATURE AND EXTENT OF THE COUNTER-PERFORMANCE

The parties must agree on the nature and extent of the counter-performance
to be paid in exchange for the use and enjoyment of the property.
Uncertainty exists as to whether this counter-performance has to be a monetary
counter-performance or whether it may, for example, assume the form of
improvements on the leased premises or the rendering of services.
As long as it is certain that a counter-performance is payable, the extent of the
counter-performance can be calculated according to various methods.
(a) The most common method is to stipulate a specific amount, for example, USD or
RAND per month.

5 Sby G.M.CO v Klipriviersberg Estate & G.M. Co 1893 Kotze

6 Clarke v Nourse Mines Ltd 1901 TS 512 at 520-521
(b) Alternatively, the rent can be fixed according to a formula convertible into
money, for example, the same remuneration as that which was paid by the previous
lessee. If the rent is described as fair compensation, the lease will be valid provided
that the compensation can be fixed with reference to the rental value of the property
in the open market.
(c) Finally, the parties may agree that a specific third person or group of persons
will determine the rent, for example, as determined by the auditing firm XYZ or by
an arbitrator [see Southern Port Developments (Pty) Ltd v Transnet 2005
(2) SA 202 (SCA)].7

3. LEASED PROPERTY

The parties must agree on the particular subject matter of the contract, i.e. the
property to be rented. If the subject matter of the lease is not identifiable the
contract will be void.8 If movables are situated on the property they are not
automatically included in the lease.9

Consensus must be reached on the leased property. Immovable, movable,

corporeal and incorporeal things which are commercially available can be let. The
thing must be identified or identifiable, otherwise the contract will be void for
vagueness. A lease in respect of land can describe either the specific number of
units leased, for example 500 morgen, or the land as a unit, for example the farm
Vooruit in the district of Albertinia. It is also possible that only part of a property is
let, for example, a room in a house. Movables will form part of the leased property if
they were intended to go with such property, for example, a pump intended to
operate a swimming pool.

7 Southern Port Developments (Pty) Ltd v Transnet 2005 (2) SA 202 (SCA)
8 Total South Africa (Pty) Ltd v Xypteras 1970 (1) SA 592 (T) at 596.
9 Van der Westhuizen v Glastonbury 1908 TS 836.
If land is leased without mention of the immovable structures on it, such structures
are deemed to be included in the lease. Conversely, if only the immovable structures
are referred to, the land on which the structures are erected is included in the lease.

It is sometimes necessary to draw a distinction between rural and urban

tenements. The distinction does not lie in the location of the tenement, but rather
in the purpose for which the tenement is used. Rural tenements are used chiefly for
agriculture and grazing, while urban tenements are intended for domestic, business,
commercial, manufacturing and mining purposes.If agricultural land is leased
with a view to using only the residence on such land, the lease would be
deemed to be one in respect of an urban tenement.

DUTIES OF THE LESSOR

It is trite that a lessee is entitled to full use and enjoyment of the property during
the full term of the lease. The respondent is therefore under a duty to deliver and
maintain the property in a condition reasonably it for the purpose for which it has
been let. The duty includes the obligation that lessees shall not be exposed to any
unnecessary risk to life or property and that lessees shall occupy the premises with
safety.”10
Satchwell J (in Mpange and Others v Sithole 2007(6) SA 578 (W) at 587)

General
The four most important duties of the lessor are:
(a) delivery of the leased property;
(b) maintenance of the leased property;
(c) ensuring the lessee’s undisturbed use and enjoyment of the leased property; and
(d) compensation for attachments and improvements.

A written lease must include the following information:

• the names of the tenant and the landlord

10Satchwell J (in Mpange and Others v Sithole 2007(6) SA 578 (W) at 587)
• the dwelling to be occupied by the tenant must be
described (e.g., a house, room, outbuilding, garage). • the rental to be paid
• any reasonable increase
• the amount of deposit if any
• any charges (e.g., water, electricity)
• the lease period (e.g., monthly, 6 months or 3 years)
• the duties of the tenant and the landlord / landlady
• the rental period (eg. monthly, weekly, daily, yearly)
• the notice period for terminating the lease if the lease
period is not stated

a) Delivery Of The Leased Property

Condition it for the purpose for which it is let. It is an established part of our
common law that the dwelling to be let must be in the condition it for the
purpose for which it is let when handed over to the tenant11 and the landlord
/ landlady must maintain the premises in that condition.

van Winsen J states: “Before dealing further with the facts of this case it would be
as well to refer shortly to the law on the liability of a lessor relative to defects in the
leased premises. One of the incidents of a contract of lease in Roman-Dutch Law is
that a lessor is obliged to hand over the leased premises at the outset of the lease in
a condition reasonably it for the purpose for which they are let and he remains liable
throughout the term of the lease to maintain the premises in that condition.” 12

At the end of the lease, the tenant is required to hand over the dwelling in
the same condition it was received or to restore it to that condition.

11 Viljoen v Cleaver 1945 NPD 332 at 336

12 Hunter v Cumnor Investments 1952(1) SA 735 (C) at 740.
The landlord must give the tenant free and undisturbed possession of the
property (Personal Rights and Real Rights distinctions). If the property
cannot be used without some other thing, such as a right to travel over land next to
the property, then the landlord must ensure that the tenant also has use of the
other thing. McNeill v Eaton (1903) 20 SC 507; Pistorius v Abrahamson
1904 TS 643.13 The property must be delivered in a reasonable state of
repair under the circumstances, both internally and externally.14

The lessor’s primary responsibility is to make the temporary use and enjoyment
of the property available to the lessee. Sometimes, symbolic delivery is
sufficient, for example, delivery of the keys to a house, but sometimes
actual delivery is required, as in the case of movables which are easy to
handle. In the case of a long lease where the lessee desires registration, the lessor
has to give his full co-operation in this regard.

The property must be delivered in the condition agreed upon. If, for example, the
parties agree to enter into a lease agreement in respect of a furnished flat, the
necessary kitchen requisites and crockery must be supplied and, if the lessor has
undertaken to paint the flat, this must be done before delivery. The thing must be
delivered together with the attachments and additions required to make it
suitable for the purpose for which it was hired, for example, a house with
the keys to it or a farm with a windmill.

If no agreement has been reached as to the condition in which the property has to
be delivered, it must be delivered in the condition the property was in at the time of
contracting. If the property is let for a specified purpose, however, it must be
reasonably suitable for use for that purpose, for example, as a shop, hotel, factory,
residence or service station for the selling of petroleum fuel [see Harlin Properties

13 McNeill v Eaton (1903) 20 SC 507; Pistorius v Abrahamson 1904 TS 643.

14 McNeill v Eaton (1903) 20 SC 507; Pistorius v Abrahamson 1904 TS 643; Tsandu v
City
Council Johannesburg 1947 (1) SA 494 (W).
(Pty) Ltd v Los Angeles Hotel (Pty) Ltd 1962 (3) SA 143 (A), Mpange and
Others v Sithole 2007 (6) SA 578 (W) and Gateway Properties (Pty) Ltd v
Bright Idea Projects 249 CC and Another [2014] 3 All SA 577 (KZP)].

b) Maintenance Of The Leased Property

The landlord must also continue to keep the property let in a proper condition, which
means it must be reasonably fit for the purposes for which it was let. The landlord
must maintain the property both externally and internally during the lease, that is,
repair all flaws that interfere with the tenant's use of the property. This duty extends
to repairs to structural or other flaws, and preventing the property from becoming
dilapidated.

What are landlord / landlady’s duties?

To hand over the dwelling for occupation to the tenant in a reasonable condition (“a
good state of repair”; “it for the purpose for which it is let”) that would allow the
tenant undisturbed use and enjoyment. q To maintain the property both internally
and externally at
all times.
Parties can however agree that the tenant will take over certain common law duties
of the landlord / landlady.

Internal Repairs

The landlord / landlady has to maintain the premises let and ensure that the
following is in good and safe working order (e.g., electricity, plumbing, ventilation,
doors, windows).
If the landlord / landlady installs appliances such as stoves and refrigerators, he or
she has to keep these in good working order too.
“It is trite law that, unless otherwise provided, a landlord is obliged to maintain the
lease property during the currency of the lease.”15

External Repairs

External repairs include damage to roofs, gates, windows, doors, plumbing, repair
works and gutters. The landlord/landlady also has a legal duty to keep every part of
the external dwelling clean and free of rodents, dirt, garbage or other offensive
material. A tenant, however, can undertake to maintain the premises and thereby
relieve the landlord/landlady of his or her common-law duty. The tenant must look
for a “maintenance clause” before signing a lease.

Repair-and-Deduct
The landlord/landlady must know of the defects or ought to have knowledge of it by
reason of trade or profession16.
• The tenant must notify the landlord before carrying out the repairs78
himself/herself.

• Should the landlord/landlady having knowledge of the defects, fails to carry out
the necessary repairs or fails to maintain the premises in a proper condition a
FORTEEN (14) days notice (a letter detailing the complaints) can be sent to
him or her. It is considered a reasonable time period for the landlord/landlady to
attend to the necessary repairs.
On the failure of the landlord to maintain the premises in a fit state of
repair, the tenant may choose any of the following three remedies:
1. Cancel the lease and vacate the premises.
2. Recover damages for the breach of the lease, and consequential damages if
the landlord had actual or imputed knowledge of the defect and could have
repaired it.

15 Benlou Properties (Pty) Ltd v Vector Graphics (Pty) Ltd, 1992 (1) SA 179 (A).
16 Hunter v Cumnor Investments 1952(1) SA 735 (C).
 3. Demand a reduction in the rent proportionate to the loss of use.
4. The landlord is not liable for damages caused by the negligence of the tenant
or by persons for whom the tenant is responsible.

c) Undisturbed Use And Enjoyment

A tenant rents a property for his or her quiet and undisturbed use and enjoyment. It
is therefore the landlord/landlady’s duty to fulfil this right during the lease period.
the tenant would be given possession of the dwelling; to use and enjoy, and, to
have temporary ownership. In reality, the owner or landlord-landlady grants the
tenant the following:17
• guarantees physical control over the property (detentio) with all its accessories
• unhindered possession of the property (vacua possessio)
• undisturbed use and enjoyment of the property (commodus usus)

The landlord / landlady disturbs or interferes by: -

(i) preventing a tenant access to his or her dwelling by barring entry,
(ii) preventing him or her from occupying the dwelling or part of it,
(iii) cutting off water or electricity supply or putting up barriers that interfere with
the tenant’s ease of entry or exit to his or her dwelling,
(iv) refusing to attend to specific problems e.g., leaking roof, faulty electrical wiring,
and plumbing.
(v) carrying out repairs which are not necessary or which can be done after the
lease expires
(vi) entering the dwelling without the tenant’s consent which amounts to a trespass.

The obligation to ensure undisturbed use and enjoyment means that the
lessor :
(a) may himself not disturb the lessee’s use and enjoyment; and

17 Soffiantini v Mould 1956 (4) SA 150 (E).

(b) has to guarantee that no third party with a better title will disturb the lessee in
his use and enjoyment.
Disturbance by lessor
Disturbance by the lessor may assume various forms, for example, frequent hunting
expeditions on the premises without the lessee’s consent, gathering the produce of
the property or changing the locks of a leased flat.
Non-compliance with this obligation (that is, the obligation to provide undisturbed
use and enjoyment) entitles the lessee to the ordinary remedies for breach of
contract, namely specific performance, rescission and/or a claim for
damages.
Specific performance can be achieved in two ways, namely by:
(a) a prohibitive interdict; or
(b) a spoliation order – an order which obliges the lessor to restore the lessee to
his occupation.
Under certain circumstances, a lessee will also be entitled to a reduction in
the rent.

Disturbance by third parties

Apart from the fact that the lessor himself undertakes not to disturb the lessee in his
use and enjoyment of the leased property, he also guarantees that nobody else with
a better title than that of the lessee will infringe on the lessee’s use and enjoyment.
This obligation of the lessor is similar to the seller’s duty to warrant the buyer
against eviction.

If a third party with a better title infringes upon the lessee’s occupation, the
lessee must inform the lessor in order to enable the latter to defend the
former’s right in the property or assist him in his defence. If the lessor fails
to act, the lessee may not abandon the leased property without putting up a
vigorous defence, a virilis defensio. The lessee need not, however, give the lessor
notice of the disturbance or put up a vigorous defence if the third party’s claim
appears to be indisputable. Although the lessee cannot insist on specific
performance in these circumstances, he is entitled to claim damages from the lessor.
What are the tenant’s remedies?
a.tenant may demand that the landlord/landlady put the dwelling into the condition
required by contract
b. seek a proportionate reduction of rent while remaining in occupation
c. cancel the contract and sue for breach
d. take the matter to court to prevent the landlord/landlady
from continuing the interference (interdict)
e. restrain the landlord/landlady by an interdict if he or she enters without
permission

Huur gaat voor koop

In Roman law, the lessee had only personal rights and no real rights in respect of
the property. Unless agreed otherwise, the lessee’s rights had to yield if a third party
acquired a real right in respect of the property. If the lessor sold the property during
the term of the lease, the lessee could not enforce the lease against the buyer but
had to hold the seller (lessor) liable for damages. It made no difference whether the
successor acquired the property titulo oneroso, for example as a buyer, or titulo
lucrativo, for example as heir. The only exception made was one in respect of
successors titulo universali, in other words, successors not only in rights but also
in obligations. Such successors, in contrast to successors in rights (titulo singulari
or particulari), were indeed bound by the lease.

In Roman-Dutch law, the position was different in respect of the lessee of land
and buildings. Such a lessee had a real right which he could assert against the entire
world. This exception, which is referred to as the rule of huur gaat voor koop –
meaning that lease takes precedence over sale – was received into South
African law and Zimbabwean Law. Although the rule refers only to contracts of
purchase and sale, it finds application in all forms of alienation including, for
example, donations and bequests.
The principle of ‘hire takes precedence over sale’ applies. This is also known as huur
gaat voor koop. The effect is that the sale of the property cannot prejudice
the tenant, since the buyer at the time of the sale had actual, or
constructive, notice of the lease. The new owner simply ‘steps into the
shoes’ of the original landlord. This means that the new landlord acquires
all of the rights of the original landlord, and also acquires all of the duties.
The original landlord is no longer liable under the lease.18

Mignoel Properties (Pty) Ltd v Kneebone19

A landlord sold a building to a new owner. The new owner sued a person who had
signed as surety and co-principal debtor for the tenant, who had failed to pay the
rent. The court held that the new owner stepped into the shoes of the previous
lessor, and had acquired all of the rights held by the previous owner.

The ‘hire takes precedence over sale’ principle does not apply to leases of
movables. It also does not apply where the property is expropriated by the
State.
The protection granted to the lessee in terms of the huur gaat voor koop rule can
be
summarised as follows:
(a) A lessee in terms of a short lease is protected if he is in occupation of the
leased property [see Metcash Seven Eleven (Pty) Ltd v Pollev Property
Holding and Investment CC 2013 (4) SA 506 (GSJ), which confirmed
that a lessee who has abandoned possession of the leased premises will not
be protected under the rule].
(b) A lessee in respect of a long lease will be protected for the full duration of
the lease, provided that registration of the lease has taken place. If no
registration has taken place, the lessee will be protected for the first ten years

18 De Wet v Union Government 1934 AD 59; Boshoff v Theron 1940 TPD 299;
Shalala and another v Gelb 1950 (1) SA 851 (C); Kessoopersadh v Essop 1970 (1)
SA 265 (A);
19 Mignoel Properties (Pty) Ltd v Kneebone 1989 (4) SA 1042 (A).
 if he is in occupation of the leased property.Non-registration of a long lease,
therefore, does not give rise to invalidation of the lease
between the lessor and the lessee, but only to its unenforceability against third
parties after the first ten years.

(c) All later rights vesting in the land after the above requirements have been
complied with are subject to the lease and all parties who later obtain rights
in relation to the land are bound by the lease (based on the maxim qui prior
est tempore potior est iure).

(d) Where the lessee is not in occupation of the leased property or where
registration of the lease has not taken place, the lease is binding only on:

(i) persons who acquire the land without rendering a counter-performance, in

other words, successors titulo lucrativo;
(ii) purchasers and credit grantors who, at the time of conclusion of the
transaction or of the granting of credit, are aware of the existence of the
lease;
(iii) persons who succeed the lessor in rights as well as obligations, in other
words, successors titulo universali.

d) Compensation For Attachments And Improvements.

It is self-evident that if the lessor granted the lessee permission to make
attachments and improvements to the leased property and agreed to compensate
the lessee for such attachments and improvements, the lessee is entitled to
compensation. Problems arise, however, where permission was not obtained or
where permission was indeed obtained but without the further agreement to pay
compensation. In such a case, the position in Holland was regulated by legislation in
the form of a Placcaat of 1658, which was re-enacted in 1696. This Placcaat was
received into South African law and problems with regard to compensation for
attachments and improvements have to be answered with reference to it.
No compensation can be recovered for improvements made without permission.
These improvements can be removed during the continuance of the lease on
condition that the premises are not left in a worse condition after the removal than
they initially were at the commencement of the contract. Under no circumstances
will the lessee have a lien over the property as a result of the improvements.

DUTIES OF THE LESSEE

General
The lessee’s three main duties are:
(a) payment of the rent;
(b) proper use of the leased property; and
(c) return of the property on termination of the lease.

(A) PAYMENT OF THE RENT

The lessee’s most important duty is to pay the rent. The rent is payable in the
manner agreed upon in the contract and, in the absence of an agreement, at the
end of the term of lease. In case of a periodic lease, the rent is payable at the end
of each period. Should a lessor require payment of the rent in advance (for example,
at the beginning of each month), this must be agreed upon. The parties usually
agree upon the time and place of payment. Unless otherwise agreed upon, rent
is payable up to midnight of the date agreed upon. When rent is payable in advance,
this means that it must be paid before or on the first day of each period. Except
when payment has to be made at the premises of a public business, such as a
building society, the lessee must pay on that day, irrespective of the fact
that it may be a Sunday or public holiday.
Payment of rent is a two-fold legal act and the co-operation of both parties is
required. Should the lessor prevent the lessee from fulfilling his obligation (for
example, by refusing to accept the rent), the lessee is not in default and, instead,
the lessor would be in breach of the contract in the form of mora creditoris.
Reduction of rent
The lessee is obliged to pay rent for as long as he has the use and enjoyment of the
property. If he should be deprived of this use and enjoyment either in whole or in
part he may insist on a reduction of rent. In the course of this chapter, it has already
been pointed out that reduced rent is payable if:
(a) the property is not delivered in the condition agreed upon;
(b) the property is not maintained properly; and
(c) the lessor himself or a third party with a better title interferes with the use and
enjoyment of the property.

A further cause for insisting upon a reduction in rent is when the lessee has no or
only
partial use and enjoyment of the leased property owing to its complete or partial
destruction through vis maior. Examples of vis maior include earthquakes,
catastrophic weather conditions and war; in other words, natural or other
events that could not reasonably have been foreseen or prevented. If vis
maior results in complete destruction of the leased property, the lessee does not
have to pay any rent. If the lessee’s use and enjoyment of the leased property are
impaired only partially, a reduction of rent in proportion to the loss may be insisted
upon.
Non-substantial loss does not justify any rent reduction. If a property is leased for a
specified purpose and subsequently cannot be used for this purpose owing to vis
maior, although remaining suitable for another purpose, claim may be laid to a
reduction of rent.

B)TO ENSURE THAT THE PROPERTY IS NOT MISUSED AND IS

USED ONLY FOR PURPOSE FOR WHICH IT WAS LET

If there is an express agreement as to the use of the property, it only may be

used for those purposes. In the absence of an express agreement, the property only
may be used for the same purposes it was used before the lease. If the tenant
uses property unreasonably or improperly, an action for damages can be brought
against the tenant. For example, the tenant may not use residential premises for
business purposes. Living an immoral private life does not constitute misuse of the
premises.
In the Lomax v Killarney of Durban (Pty) Ltd20
A landlord applied to court to cancel a lease as it was alleged that the tenant was
using the premises to have sex with women to whom he was not married.The court
held that the conduct complained of was not a misuse of the premises, and refused
to allow the landlord to cancel the lease.
In the case Oatorian Properties (Pty) Ltd v Maroun21
A written lease agreement provided that a tenant was allowed to use the leased
premises only for parking motor vehicles and motorcycles and for no other
purpose. The tenant had in fact erected a wooden shed on the leased
premises. The court held that this amounted to a breach of the lease, which in
terms of the lease agreement entitled the landlord to cancel the lease.

During the continuance of the lease, the lessee must act as a bonus paterfamilias
would act in relation to the leased property. In other words, the lessee is obliged to
use the leased property as a reasonable man would use and care for his own
property. For example, if a car is rented, the lessee may not leave the car standing
unlocked in the street.
The most common form of improper use is damage caused to the property by the
lessee or by persons for whose actions the lessee is responsible. Thus, for example,
a lessee may only cut down self-regenerating trees (sylva caedua) and not trees
providing fruit or shade or decoration. A lessee may, however, cut down trees he
planted himself, provided that, upon expiry of the lease, he is able to return the
property to the lessor in the same condition as that in which he found it.

20 Lomax v Killarney of Durban (Pty) Ltd 1961 (2) SA 573 (D).

21 Oatarian Properties (Pty) Ltd v Maroun 1973 (3) 21 779 (A).
Proper use of the leased property means, among other things, that the property
should be used for the purpose for which it was leased. A residence, for example,
may not be used as a boarding house or for other business purposes. If the
lease agreement is silent on the particular use, the property may be used in the
same manner as in the past or for the purpose for which it was
manufactured or created.

C)RETURN OF THE PROPERTY ON TERMINATION OF LEASE

At the end of the lease period, the leased property must be returned in the same
condition as that in which it was received, with due allowance for ordinary wear and
tear necessarily resulting from the effluxion of time and ordinary use of the property.
A lessee of a residence cannot, therefore, return only the keys to the
lessor but must also remove all his personal effects.

THE LEGAL POSITION OF THE LESSEE

The content of the lessee’s right can be derived largely from the obligations of the
lessee and the lessor as stated above. However, it is important to touch on some
other important aspects of the lessee’s rights that are not apparent from these
duties. These are discussed separately under the headings of subletting, cession and
assignment respectively.

SUBLETTING

If there is no provision in the contract of lease dealing with subletting, a lessee is

entitled to sublet (i.e. re-let) any thing that has been let. In this way, a second lease
is formed. The lessee does not require the lessor’s consent, provided that the
proposed sublessee is not a person to whom the original lessor could reasonably
object.If the property is sublet, a contract arises between the original lessee and the
sublessee. There is no contractual relationship between the original lessor and the
sublessee. Therefore, the sublessee will have to give up occupation of the thing let
when the original contract of lease comes to an end.

CESSION

Cession by a lessee of his rights under a lease means a transfer of those rights to a
third person. If there is no provision in a contract of lease prohibiting cession, a
lessee may cede his or her rights to a third person like any other creditor. The effect
of a cession is that the lessee ceases to be the creditor of the lessor and that the
cessionary takes the lessee’s place as a creditor of the lessor. The cessionary then
becomes entitled to exercise such rights as are ceded to him under the lease.
However, it is important to note that the cessionary does not undertake the
obligations of the cedent (the lessee) who, though no longer creditor, still remains a
debtor under the lease. Thus, the rights, and not the obligations, of the lessee are
ceded.

Assignment

The assignment of a lease (a term taken from English law) means the entire
substitution of a new lessee for the old one. As assignment encompasses not only
the cession of the lessee’s rights but also the delegation of his or her duties, a
tripartite contract is required between the original creditor (lessor), old debtor
(original lessee) and new debtor (new lessee). The lessor can give his consent in
advance (for example, a lease with the lessee or his assignees, assigns) or tacitly,
through conduct, such as acknowledging a third person as the new lessee.

TERMINATION OF LEASE
1. Agreement of parties
2. Death of either of the parties
3. Insolvency of the Lessor
4. Operation of Law
 RENEWAL OF LEASE AGREEMENT

Parties to a contract of lease may agree expressly or impliedly that immediately

upon the expiration of their lease, a new lease of the same thing let will commence
between them.
The term ‘renewal’ used in the part is slightly misleading in that it may create the
impression that the old lease is being continued. Note that, upon an agreement to
re-institute or revive a lease by agreement, a new lease comes into existence, but
which may incorporate the old terms of the original agreement.
Express renewal (conventional relocation)
Express renewal is effected by express agreement by the parties during the contract
of lease or upon its expiration. It is commonly effected by the exercise of an option
to renew that was provided for in the contract of lease or by a separate contract
entered into during the currency of the lease.

The time and manner of exercising such a right is usually prescribed in the contract.
Where the option is included in the contract but with no time prescribed, the option
must be exercised before the lease expires as the option expires with the lease. The
offer to renew contained in the option should be complete. This means that the
terms of the lease must be so certain and definite that its acceptance will bring the
contract into existence.
The new lease may introduce / alter terms in the contract. Where the parties
agree to renew their lease without setting out the new terms for the new lease, the
courts have held that, in the absence of an express stipulation to the contrary in the
renewal agreement, any collateral pacts in the lease must be taken to have been
renewed.
Tacit renewal
Where there is nothing in the contract regarding renewal but the lessee remains in
occupation of the leased thing and continues to pay the rent while the lessor permits
him to remain in occupation after the termination of the lease and continues to
accept the rent, renewal can be inferred. It is noted that it is not just the fact that
the lessee remains in occupation of the leased property but also that the lessor
continues to accept the rent. Thus it is the fact that both parties are content to carry
on as before