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LU14: Contract of Lease
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LU14: Contract of Lease
Contract of Lease: Is a contract whereby one party (the lessor or landlord) undertakes to make
temporarily available to another person (the lessee or tenant) the use and enjoyment of a thing,
wholly or in part, in return for the payment of a sum of money, or a shar in the fruits of the
property.
Essential elements of a contract of lease:
An undertaking by lessor to give the lessee The thing corporeal (tangible), moveable or
the use and enjoyment of something immovable. Can pertain to thing in its totality
or may pertain to only part of the object.
Object must be identified or identifiable.
An agreement between the lessor and Not a requirement that contract be entered
lessee that the lessee’s use and enjoyment into for a definite time – contract may
is temporary stipulate that it will run until occurrence of an
event or a specific date or indefinitely i.e. it
can be any period, but once expired it must
be returned (not permanent).
An undertaking to pay rent Lessee must undertake to pay rent and rent
must be a specific sum of money. Exception
is in the lease of agricultural land (farms),
rent must consist of a definite quantity or a
proportion of the fruits of the property i.e.
exchanging oranges for tractor use through
this form of a bartering system. Amount of
rent must be certain or ascertainable. If
ascertainable, it is a specific amount of
money or quantity produce; agreeing on a
method or formula by which to calculate rent
i.e. agreeing that 3rd person may determine
amount of rent.
Formation of contract of lease: No formalities required for the conclusion of a valid contract of lease.
Formalities in Respect of Leases of Land Act 18 of 1969 provides that a long lease (a lease longer than
10 years) must be registered against the title deeds of the land to be valid for more than 10 years. If not
registered, the lease agreement will only be valid for 10 years. If it is a long-term lease, the excess years
involved it will not be a valid lease.
Duties of lessor (landlord):
To deliver the leased object to the lessee Lessor must put the use and occupation of the
object at the disposal of the lessee in such a way
that lessee is able to have undisturbed occupation
of it. If object is let for a specific purpose lessor is
deemed to have given a tacitly undertaking that it
will be reasonably fit for that purpose.
To maintain the thing let in proper condition The object must not only be delivered in a
condition which is fit for the purposes for which t is
being leased – it must also be maintained in that
state. The lessor must continue to maintain the
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