Reasonable Cancellation Penalty Lease Agreement

Regulation 5, paragraph 2, point b) provides that „the value of the transaction until termination“ must also be taken into account. Probably, if the transaction value is high, a lower penalty would be justified and vice versa. As a general rule, a lease imposes a permanent obligation to pay the rent at the end of agreed periods (for example. B each month) during the lease currency. The tenancy obligation is due and payable at the end of each period and cannot be recovered by the tenant if the contract is terminated. A supply contract for regular delivery of products is another example of a permanent obligation, depending on how the contract was drafted. If the text of the contract confers separate rights, that is, if the contract is divisible, the rights that „are conferred as a means of redress regardless of a part of the binding contract“ are payable, due and enforceable, are not affected by the termination. Mennen asserts that appropriate cancellation sanctions are governed by Section 14 of the CPA and Regulation 5, which specifies the factors to be considered in determining the sanction. Once a tenant has decided to exercise his right of early termination, the landlord has the right to impose an appropriate withdrawal sentence on the tenant. Regulation 5, paragraph 2 of the CPA states that the penalty must not exceed a reasonable amount, taking into account that „three months [rent as cancellation fees] are simply not reasonable,“ Myburgh explains. The Tenant submitted that a penalty should only be relevant if an apartment is not put up for sale and marketed. He cited the uncertainty of his tenure following the impending sale and was the main reason for his early resignation. He said he was willing to pay a fine of 10,000 R100s that he thought was fair.

There are therefore different considerations when a tenant plans to terminate a tenancy agreement prematurely. To avoid unnecessary litigation and an exorbitant termination sentence, a tenant would benefit from consultation with his lawyer before informing his landlord of the termination. In this regard, Regulation 5, paragraph 2, point (i), maintains that „the appropriate potential of the service provider to find another consumer between the date of receipt of the withdrawal notification and the date of the cancelled booking must be taken into account. Again, the text of section 17, paragraph 4, should have been appropriate for the context, but the explanatory statement applies. If the supplier can find a replacement consumer, the supplier is not out of pocket. Regulations 5, paragraph 2, points h) and (i) do not apply to all services because they require services involving „seating“ or a service such as leasing where it is possible to „replace“ the consumer. Services such as telecommunications services are not provided on this basis. Regulation 5, paragraph 2, point g) stipulates that „the type of goods or services reserved or reserved“ must be taken into account when calculating an appropriate response to the cancellation. This factor is identical to one of the factors listed in Section 17 (4) that are taken into account when calculating a fair „cancellation fee“ for a pre-booking or order. The wording is difficult because it has not been adapted to the context of the temporary agreements, but the justification for this sub-regulation applies in this context. A consumer may terminate a fixed-term contract for special goods that cost the supplier significantly. If goods or services are tailored to the needs of a particular consumer, a higher penalty for cancellation may be justified.

In order to determine a reasonable cancellation fee, the CPA imposes a list of factors to be considered. This includes, among other things, that if the tenant is a natural person, which is usually the case for rentals, then the tenant has protection under section 14 of the act.