Please note that you are using an outdated version of Internet Explorer which is not compatible with some elements of the site. We strongly urge you to update to a newer version for optimal browsing experience.

Tenant reneging on lease renewal

28 Aug 2013

What happens if a tenant’s lease for the year has expired (in the original contract it stated that he had an option to renew the lease for a further year, with a negotiated increase) and he says he’ll be renewing the contract but decides to cancel it after a few months? 

The fact that the tenant may not have signed an official lease agreement document does not make the agreement any less valid, says Bauer.

Michael Bauer, managing director of IHPC estate agents, says this does happen from time to time and any communication going back and forth between the landlord and tenant should be put into writing. Even if the confirmation of the agreement is via email, that is still legal and binding, he says. 

If the tenant says he would renew his lease, this is seen to be a contract as there was an offer and an acceptance of the offer. Therefore, even though the tenant might have changed his mind he is still, in effect, held by the agreement via email or telephone to stay on for an additional year. 

The fact that he may not have signed an official lease agreement document does not make the agreement any less valid, says Bauer. 

By agreeing to extend the lease initially, a valid extension to the lease has resulted and the landlord has accepted that the tenant is staying on and made plans accordingly. 

Bauer says the tenant will have, if he still wants to cancel, to pay a reasonable cancellation fee (which is usually a month’s rent because that is how long it would take to find another tenant under normal circumstances) and give 20 business days’ notice to the landlord.  

Print Print
Top Articles
Savvy buyers can find great property options at lower prices in times of reduced confidence, and with signs of recovery and banks giving more bonds, it's a good time to buy...

While the commercial market may be slower than in recent years, it is by no means stagnating and demand in certain sectors continues to drive ongoing development.

Tourists are paying up to R4 400 per day in Cape Town’s mixed-use Waterfront and Foreshore, with visitor numbers expected to climb to 21 million by 2030. Read on...


Your browser is out of date!

It looks like you are using an outdated version of Internet Explorer.

If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.

For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.

Please contact our Property24 Support Team for further assistance. Tel. +27 (0)861 111 724