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LPL4801 LATEST EXAM PACK
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LPL4801 – Exam prep
EXAMINATION LONGER QUESTIONS
MAY/JUNE 2013
QUESTION 1
X IS THE OWNER OF A DAIRY FARM SITUATED ON THE BANKS OF A RIVER IN THE EASTERN
CAPE. Y LEASES THE DAIRY FARM FROM X FOR 2 YEARS. THE RENT IS PAYABLE MONTHLY.
DURING A FLOOD THE DAIRY IS DAMAGED TO SUCH AN EXTENT THAT Y CAN NO LONGER
USE THE PREMISES AS A DAIRY. NEVERTHELESS, X STILL CLAIMS PAYMENT OF RENT.
DISCUSS Y’S DEFENCE AND GIVE REASONS FOR YOUR ANSWER. [10]
ANSWER:
In this case we are dealing with the remission of rent. In which case the lessee is wholly or
partially released from his or her obligation to pay the rent if he or she is prevented by vis
manior from having full use and enjoyment of the thing.
Rules for the remission of rent
⇒ A lessee who is deprived through vis maior or casus fortuitus of the use and enjoyment of
the property let to him or her is entitled to remission of rent, is that it is an example of
supervening impossibility of performance which extinguishes the contract wholly or
partially, as the case may be.
⇒ Distinction should be drawn between cases of total destruction and cases where the
lessee does not have use and enjoyment of the property
⇒ In the case of total destruction the contract would obviously be extinguished as a result
of supervening impossibility
⇒ In cases where the lessor does not have use and enjoyment of the property the lessor is
not being prevented from performing. The lessee remains in occupation of the property.
The reason being that the lessee is entitled to remission of rent is that the continuous full
beneficial use and enjoyment of the property was a supposition upon which the parties
contracted and, therefore, on failure of their supposition the lessee is entitled to claim
remission of rent. This is acceptable provided that “supposition” is interpreted as meaning
simply a tacit stipulation.
⇒ The lessee will thus be entitled to demand remission of rent is the loss has been caused
by a vis maior
From the above facts Y as lessee will be entitled to a remission of rent.
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QUESTION 2
BRIEFLY NAME THE ESSENTIALIA CREATED BY THE RENTAL HOUSING ACT 50 OF 1999 [10]
ANSWER:
⇒ All leases, whether in writing or not, are deemed to include the following standard
provisions, which may not be waived by the tenant or the landlord (s 5(3) and (4)):
⇒ Receipts: The lessor must provide the lessee with a written receipt for each payment
received from the tenant (s 5(3)(a). The lessor must also provide receipts to the lessee as
proof of costs incurred by the lessor in repairing damage caused to the dwelling during the
lease period- including replacing keys
⇒ Deposits: To demand a deposit is permissible, but the deposit may not be more than the
amount specified in the contract (s 5(3)(c)).
_ The act does not limit the amount of the deposit.
_ The deposit must be invested by the landlord in an interest-bearing account with a
financial institution and the lessor must pay the tenant interest at the applicable rate, which
may not be less than the interest rate on savings accounts with a bank.
_ When the lease is terminated, the lessor may use the deposit and interest towards the
payment of unpaid rental or any other amounts due and payable by the tenant under the
lease, including the reasonable cost of repairing damage to the dwelling during the lease
period and the cost of replacing lost keys.
_ The lessor must refund this to the tenant within 14 or 21 days of restoration of the
dwelling to the lessor (s 5(3)(g) and (m)). If no money is owed in terms of the lease, the
lessor must refund the deposit, together with the accrued interest to the lessee, without
any deduction or set-off, within seven days of termination of the lease (s 5(3)(I)).
⇒ Inspection: before and after occupation to pick up any defects or damage to determine
the lessor's responsibility for rectifying such defects or damage as well as to register such
defects or damage in a list (s 5(3)(c)) which list must be attached to the lease, if the lease is
a written lease (s 5(7)).
o Upon termination the parties must arrange a joint inspection of the premises- three days
before the end of the lease
o If the lessor fails to inspect the premises in the presence of the lessee, such failure is
deemed to be an acknowledgement by the lessor that the premises are in a good and
proper state of repair. In this case, the lessor will have no further claim against the lessee
who must then be refunded the full deposit including interest (s 5(3)(j)).
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o If the tenant fails to respond to the lessor's request for an inspection, the lessor must
inspect the premises within seven days from the termination of the lease in order to assess
any damages or loss, which occurred during the lease period
⇒ Vacation without notice: If the lessee should vacate the premises before expiration of the
lease, without notice to the lessor, the lease is deemed to have expired on the date that the
lessor established that the tenant had vacated the premises. The lessor retains all his/ her
rights arising from the lessee's breach of the lease contract
⇒ Tacit renewal: If the lessee should vacate the premises before expiration of the lease,
without notice to the lessor, the lease is deemed to have expired on the date that the lessor
established that the tenant had vacated the premises. If this should happen, the lessor
retains all his/ her rights arising from the lessee's breach of the lease contract.
⇒ Written leases: written lease must include the essentials of the contract of letting and
hiring of a thing, namely the names of the parties, a description of the premises, and the
amount of rent
_ The addresses of the parties, any other charges payable, provision for a reasonable
escalation, if wanted, when payments are to be made if they are not to be made monthly,
the amount of the deposit, the period for which the lease is to be concluded as well as the
notice period.
_ Attached to the contract must be a copy of the house rules, if there are any and the list of
defects registered during the inspection must also be attached
_ Noncompliance with these provisions of the Act causes the agreement to be invalid, which
leaves the contracting parties without the protection of the act and without the protection
of the common law of lease.
QUESTION 3
DISCUSS THE LEGAL POSITION WHERE THE THIRD PARTY WHO HAS TO DETERMINE THE
PURCHASE PRICE, FIXES AN UNREASONABLE PRICE. DO NOT DISCUSS THE PROVISIONS OF
THE CONSUMER PROTECTION ACT 68 OF 2008. [8]
Unreasonable price fixed: where the 3rd party does fix a price, but it appears to be
unreasonable there are 4 possible solutions:
1. The contract of sale is valid, notwithstanding the unfair price. In English law, the price
specified by the 3rd party is binding in the absence of mala fides, fraud, error or collusion.
2. The contract of sale is invalid as the parties intended for the price to be reasonable
3. The sale is valid, but the aggrieved party is not bound by the manifestly unjust
determination of the price, as the court has a general power to correct such determination
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