In depth summary of Letting & Hiring (Chapters 16-18) in the commercial law 5th edition nagel et al textbook for KRG 120. Includes graphical explanations, a glossary of latin terms applicable and extensive examples to help understand concepts.
- Letting and hiring of things = governed by common law with some statutory
additions
- Rental Housing Act (RHA): governs relationship between landlords and tenants –
it places no restriction on the amount of rent nor the grounds on which lessees
may be evicted.
- RHA was introduced to give effect to the right to adequate housing (Section 26
of The Constitution)
- RHA provisions – enforced by Rental Housing Tribunal
o Lessor or lessee can file a complaint concerning “unfair practice”
o “any act or omission by a landlord or tenant in contravention of the Act or
a practice unreasonably prejudicing rights of tenant or landlord”
o Tribunal can make a ruling and if not complied with criminal action may
be instituted.
- RHA – not applicable to; use of movable property, agricultural land or business
purposes.
- Consumer Protection Act (CPA) is also applicable as this act defines a service as
“ access to or use of any premises or other property in terms of a rental”
- CPA – applicable to residential & commercial leases (Application to commercial
leases does not apply to juristic-person lessees with net asset value/turnover => R2
million – therefore cannot enjoy protections of this Act)
- RHA - only applicable to residential leases
DEFINITIONS
- Lease: reciprocal agreement in terms of which one party (lessor) undertakes to
confer upon another party (lessee), the temporary use and enjoyment of a
particular thing (residence) in exchange for counter performance.
- Landlord: an owner of a dwelling
- RHA: lessor = landlord & lessee = tenant
GENERAL REQUIREMENTS FOR THE CONCLUSION OF THE LEASE
- A lease = A contract (thus requires; consensus, contractual capacity, legality,
physical possibility & formalities)
- Consensus (Essentialia)
o With regards to CPA; Act restricts way lessor may market his services (these
provisions have a bearing on the manner in which consensus is obtained
thus obtaining consensus is restricted)
, FORMALITIES
- Can be tacit, verbal or in writing
- Contacts of lease (in respect of movables) need to be reduced to writing if they
fall within the National Credit Act 34 (if not complied with; lease is still valid but
fine imposed)
- Lessee has right to request lessor to reduce lease to writing
§ If this happens the Rental Housing Amendment Act 35 of 2014 kicks
in
§ This Act will make the reduction to writing peremptory/final
§ Written agreement must include:
Þ The names of the lessee and the lessor and their addresses
Þ description of the dwelling
Þ amount of rental & reasonable escalation
Þ Where rentals are not paid on a monthly basis, the
frequency of rental payments.
Þ amount of the deposit
Þ ease period, or, if there is no lease period determined, the
notice period requested for termination of the lease.
Þ obligations of the lessee and the lessor
Þ any other charges payable in addition to the rental in
respect of the property
Where lessor fails to reduce to writing -guilty of an offence & liable to a
fine and/or imprisonment (not exceeding 2 years)
- CPA requires lease to be written in plain language (duty of the lessor to ensure
lessee fully understands agreement)
ESSENTIALA OF THE CONTRACT OF LEASE
Parties must reach consensus on ;
- The leased property
- Use & enjoyment of such property be conferred inly temporarily
- Nature & extent of counter-performance
a) The Leased Property
- Must be identified/identifiable (if not = void)
- Is possible only part of the property is leased (e.g. room in a house)
- If land is leased without mention of immovable structures on it – structures
included in lease
- If only Immovable structures are referred to in contract – land they are on is also
included in lease
- Rural vs Urban tenements ( distinction drawn in purpose for which tenement id
used)
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