Q&A: Lease Agreements and Cancellation Notices
Question: I’ve got a landlord who wants to give his tenants notice because he wants to sell his house. How many days’ notice must the landlord give the tenants? 2 months, 40 business days, or 80 business days?
Answer: The landlord is in a position to terminate the lease agreement at any time during the subsistence of the lease agreement in terms of section 4(5)(c) of the Rental Housing Act. This provision does, however, require the lease agreement to make provision for such early termination with specific details like the agreed notice period. There are no specific details surrounding the specific time period that the landlord has to give the tenant to affect this early termination.
The Act simply determines that this early termination may not construe an unfair practice, for instance, the landlord may not terminate the lease agreement just because he can place another tenant at a higher rental. It is very important to ensure that this provision is contained in your lease agreement, with a specific notice period.
Also, I’ve also got a tenant who wants to cancel his lease. His contract’s cancellation clause provides for one calendar month to give notice. But the CPA says he may legally cancel his lease agreement if he gives 20 business days’ notice, correct? The contract does not say anything about a cancellation fee, an obligation to get another tenant to take over his lease, or that he must pay for the full term even though he cancels the lease and moves out.
In this scenario, the landlord wants to keep his deposit, charge a cancellation fee, oblige him to get a new tenant and/or pay the rent even after moving out.
Section 14 of the Consumer Protection Act (CPA) will always supersede any lease agreement. The tenant would still be allowed to give the 20 business days’ notice of early cancellation. The CPA does allow for an early cancellation penalty in a situation like this.
When the lease agreement is silent on the details of the early cancellation penalty the landlord will be allowed to claim the actual damages suffered provided that he can prove that he mitigated his damages. In other words, he actively tried to find a new tenant. This provision does allow the landlord to require the tenant to pay rent until he can place a new tenant. Sec 14 does not require the tenant to find a new tenant, this obligation of mitigation is in fact on the landlord and not the tenant. The landlord is allowed to retain the deposit in lieu of the rental that is due up the date that a new tenant is placed.