Breaking a Lease Early in Pretoria East: A Tenant's Guide to Cancellation Rights and Reletting Costs

A new job in another city, a relationship that ends, a transfer that comes through sooner than planned. There are good reasons a Tenant needs to leave a property before a Lease Agreement runs its course. South African law gives Tenants a route to do this lawfully. It does not mean leaving free of cost, but it does mean leaving without being held to the full remaining term.

This guide sets out how early cancellation works for Tenants renting in Pretoria East, what a Landlord can and cannot charge, and the steps worth taking before notice is given.

The legal right to cancel early

Section 14 of the Consumer Protection Act applies to most residential leases in South Africa, provided the Tenant is a natural person and the Landlord lets the property in the ordinary course of business. This covers the great majority of residential tenancies in Pretoria East, including those let through a managing agent.

Under section 14, a Tenant may cancel a fixed-term Lease Agreement before it ends by giving twenty business days' written notice. A month-to-month lease requires a full calendar month's notice instead. The notice must be in writing and should be dated and delivered in a way that can be proven, by email for example.

This right exists regardless of what the Lease Agreement says. A clause that attempts to remove it, or that locks a Tenant into the full remaining term with no right to cancel, does not override the Act.

What counts as a reasonable cancellation penalty

Cancelling early is a right, not a free pass. The Landlord is entitled to a reasonable cancellation penalty to cover the actual loss caused by the early end of the lease. There is no fixed percentage set out in law, despite what is sometimes quoted. The penalty must be assessed against factors set out in the regulations to the Act, including:

• How much of the lease term remains
• The monthly rental and the Landlord's documented financial loss
• The length of notice the Tenant gave
• Whether a New Tenant could reasonably be found in that time with Reletting and advertising costs actually incurred

A penalty pitched at a flat "three months' rent" or "fifty per cent of the remaining lease" regardless of these factors is open to challenge. A Tenant who is charged a penalty that looks disconnected from the Landlord's actual loss can query it with the Landlord or managing agent in writing, and can take an unresolved dispute to the Rental Housing Tribunal or the National Consumer Tribunal at no cost.

The Landlord's duty to try to relet

A cancellation penalty is meant to cover a loss, not to punish the Tenant for leaving. This means the Landlord has a duty to take reasonable steps to find a New Tenant rather than simply claiming the full penalty and leaving the property empty.

If a New Tenant is found and signs a new Lease Agreement for the same period or longer, the Landlord's financial loss falls away, and so does most or all of the cancellation penalty. The departing Tenant can usually still be held liable for reasonable advertising costs incurred in finding that replacement, commission paid to an Agent or a reasonable cancellation penalty but not for rent beyond the point a new Tenant takes over.

A Tenant who needs to leave early can often shorten the penalty considerably by helping in this process: giving as much notice as possible, keeping the property presentable for viewings, and asking the agent directly what progress is being made on reletting.

How this interacts with your deposit

It is very often specified in the Lease that the Deposit Held cannot be used in respect of Rental. Under the Rental Housing Act, a Landlord must refund the deposit, less any valid deductions, within fourteen days of the lease ending, or within twenty one days in some circumstances. A joint outgoing inspection should take place close to the end of occupation, with the Tenant present, if possible, and any deduction should be supported by receipts.

Deductions for a cancellation penalty should be itemised separately from deductions for damage. Fair wear and tear is not a valid deduction under either heading.

Before you give notice

A few steps make the process smoother for a Tenant who needs to leave before the lease ends.

• Check the Lease Agreement for an early cancellation clause that you have already agreed to by signing the Lease and read what it says the penalty will be based on
• Put your notice in writing, dated, and keep proof it was sent and received
• Ask the Landlord or agent in writing how the cancellation penalty will be calculated and on what factors
• Offer to assist with viewings and ask for updates on reletting progress
• Settle rent and utilities up to the date you vacate, and request a joint outgoing inspection before handing back the keys
• Keep a copy of every communication until the deposit has been refunded and the matter is closed

If you are a Tenant in Pretoria East weighing up an early move, or a Landlord wanting a Lease Agreement with a cancellation clause that holds up and is fair to both sides, the Kingsmark team is happy to talk it through. Contact our office and we will help you work out what applies to your situation.