The effects of an Unsigned Lease

The effects of an Unsigned Lease

The Rental Housing Act of 1999 (RHA) is clear that a lease need not be reduced in writing unless it is requested by a tenant, in which case a landlord must comply. If the lease is in fact written, but unsigned by the tenant, then section 50 of the Consumer Protection Act of 2008 (CPA) deems it valid and binding.

From these provisions, we can glean that if there is a written agreement, albeit unsigned, it may still be an enforceable record of the contractual relationship.

Although not applicable throughout the country, the manner in which the Gauteng Unfair Practise Regulations have addressed the issue ought to serve as a useful guideline:

(1) If the landlord does not sign and deliver a written lease agreement, signed and delivered to the landlord by the tenant, acceptance of rent by the landlord gives the lease agreement the same effect as if it has been signed and delivered by the landlord.

(2) If a tenant does not sign and deliver a written lease agreement, signed and delivered to the tenant by the landlord, acceptance of possession of the dwelling and payment of rent gives the lease agreement the same effect as if it had been signed and delivered by the tenant.

The above approach is re-affirmed by the common law principle that the true intention of the parties may be ascertained from the circumstances surrounding the conclusion of the contract and the subsequent conduct of the parties.

The act of presenting an unsigned written agreement to the other party for signature may be constructed as an offer to enter into a contract as embodied in that document (Robers v Martin 2005 (4) SA 163 (C) 168).

A clause in a lease stating that it is not binding, unless signed by both parties would, therefore, have a somewhat paradoxical effect. For example, a Landlord delivers an unsigned lease to a new tenant, which contains such a clause (intended to operate as a suspensive condition). The tenant signs and moves into a property, paying his first month’s rent. The Landlord, despite handing over occupation rights and duties of each party, then despite the fact that the written lease is rendered inoperable by the unfulfilled suspensive condition, it is also clearly an exact recording of the precise terms of the parties agreement, signed by both parties or not.

Technically, the lease itself might not be enforceable, however, there is no doubt the parties concluded an oral agreement. How else would one determine the terms of the oral agreement but in the ‘inoperable’ lease?

The RHA and CPA confirm the validity of their contractual relationship, oral or otherwise. Therefore, the landlord’s offer, the tenant’s acceptance, and their consequent conduct render the suspensive condition meaningless.




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