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Wednesday Aug 07, 2013

Property owner may sue a tenant for lost rent value

The tenant's right to undisturbed, full use and enjoyment of the dwelling during the lease period ends when the lease is lawfully terminated.

The landlord has the right to be restored free and undisturbed possession unless the tenant can justify his or her legal right to continue occupation.

What legal remedy does the landlord have if the tenant refuses to vacate?

The landlord will have to obtain a court order to have the tenant evicted.

Can the landlord claim additional amounts to the rental in the instance of a cancelled lease?

The landlord can claim damages for 'holding over'. This is based on the landlord's right to free and undisturbed possession. 

Mb>What is 'holding over'?

The tenant retaining possession of the property without the landlord's consent.

When the tenant fails to vacate after the lease has come to an end, the landlord can claim damages for holding over.

The claim as a result of the breach is measured as damages, which is the market rental value the landlord would be able to get if the property was re-let.

The landlord accepts the rental from the tenant while holding over as damages, and usually informs the tenant that should he or she fail to vacate, the damages would be higher than the rental the tenant used to pay. It is the market-related amount the landlord is likely to get for renting the property to a new tenant.

Is there a difference between a breach during the lease period and breach after a cancelled lease?

A tenant who moves out before the lease expires is in breach, and the landlord is entitled to the rentals for the remaining period of the lease.

The landlord can sue for damages for breach for the full amount. The damage claim is based on the rentals for the unexpired portion of the lease.

The rental amount is reduced if the landlord finds another tenant, which he is legally obliged to do to mitigate his loss.

'Where the tenant continues to occupy after valid cancellation, thereby depriving the landlord of his ability to give possession to a new lessee, the claim will not arise from the initial breach giving rise to the cancellation, but arises from the 'holding over'. (Hyprop Investments Limited and another v NCS Carriers and Forwarding CC and another (2013) JOL 30246 (GSJ)).

Some leases have a specific clause with the following: 

'If the landlord cancels this lease and the tenant disputes the landlord's right to do so, and remains in occupation of the lease premises, then:
1.1. The tenant shall continue to pay all amounts due by the tenant in terms of this lease on the due dates as agreed;
1.2. The landlord shall be entitled to recover and accept those payments;
1.3. The acceptance by the landlord of those payments shall be without prejudice to and shall not in any manner whatsoever affect the landlord's claim to cancellation then in dispute.
1.4. If the dispute is determined in favour of the landlord, then the payments made and received in terms of subclause 1.1 hereof shall be deemed to be amounts paid by the tenant on account of damages suffered by the landlord by reason of the cancellation of this lease and/or the unlawful holding over by the tenant.'

Parties should be guided by legal advice in the event of an alleged cancellation and the invoking of the 'holding over' clause.

Dr Sayed Iqbal Mohamed
Chairman of Organisation of Civic Rights
Tenant Issues
Daily News

For tenant's rights' advice, contact Loshni Naidoo or Pretty Gumede at 031 304 6451


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