Study Unit 2

Study Theme 3: Duties of the Lessee

GENERAL
The lessee’s three main duties are:
 Payment of the rent.
 Proper use of the leased property.
 Return of the property on termination of the lease.

PAYMENT OF RENT
 The lessee’s most important duty is to pay the rent.
 The rent is payable in the manner agreed upon in the contract and, in the absence of
an agreement, at the end of the term of lease.
 In case of a periodic lease, the rent is payable at the end of each period.
 Should a lessor require payment of the rent in advance (for example, at the
beginning of each month), this must be agreed upon. The parties usually agree upon
the time and place of payment.
 Unless otherwise agreed upon, rent is payable up to midnight of the date agreed
upon.
 When rent is payable in advance, this means that it must be paid before or on the
first day of each period. Except when payment must be made at the premises of a
public business, such as a building society, the lessee must pay on that day,
irrespective of the fact that it may be a Sunday or public holiday.
 Payment of rent is a two-fold legal act, and the co-operation of both parties is
required.
 Lessor will be in breach of contract (mora creditoris) should they prevent the lessee
from fulfilling their obligations.
 The duty to ensure that the rent is paid on time rests with the lessee.
 Where the parties have not agreed on a place for payment, the lessee as debtor
must go to the lessor as creditor, provided that a date for payment has been agreed
upon.

 Engen Petroleum Ltd v Kommandonek (Pty) –

It was held that a clause in a rental agreement giving the lessee a discretion to unilaterally decrease the
amount of rent payable was not void for vagueness provided that the discretion was not unfettered (for
example, the discretion must be exercised in good faith and reasonably).
Reduction of Rent:
 The lessee is obliged to pay rent for as long as he has the use and enjoyment of the
property.
 If he should be deprived of this use and enjoyment either in whole or in part he may
insist on a reduction of rent.
 Reduced rent is payable if:
a) The property is not delivered in the condition agreed upon.
b) The property is not maintained properly.
c) The lessor himself or a third party with a better title interferes with the use
and enjoyment of the property.
 A further cause for insisting upon a reduction in rent is when the lessee has no or
only partial use and enjoyment of the leased property owing to its complete or
partial destruction through vis maior (earthquakes, catastrophic weather
conditions and war; in other words, natural or other events that could not
reasonably have been foreseen or prevented).

Remedies of The Lessor:

1. Specific performance, rescission and damages-

 By failing to pay the rent, the lessee commits mora debitoris or repudiation, and
the usual contractual remedies are available to the lessor.
 The lessor may resile from the contract if the lease contains a lex commissoria or
he may acquire a right of rescission by reasonable notice [Goldberg v Buitendag
Boerdery Beleggings (Edms) Bpk].
 Should the lessor decide to rescind the contract, he must inform the lessee of his
decision. Failure to exercise the option immediately, however, does not imply that
the right to rescind has been forfeited.
 A claim for the payment of rent in arrears due in terms of a lease agreement is
considered to be a claim for specific performance and not one for damages
[Director-General, Department of Public Works v Kovacs Investments].
 A lessee who remains in occupation of a leased property after termination of the
lease cannot be held liable for the payment of rent during this period [Nedcor
Bank Ltd v Withinshaw Properties].
 Depending on the circumstances, the lessor either has a delictual claim under
these circumstances or he may institute a claim on the basis of unjustified
enrichment.

2. Tacit hypothec
 The lessor has a tacit hypothec over movable assets brought onto the leased
premises, the invecta et illata, as well as over the fruits and crops of the property,
whether gathered or not. (Lessor obtains a security right over movable assets
present on the leased property).
  The lessor’s tacit hypothec may also be applied in respect of damage caused by
the lessee to the leased premises and not only in respect of arrear rental.
 Assets on the leased premises but belonging to third parties are subject to the
hypothec only if:
a) The lessor is unaware of the fact that the assets do not belong to the
lessee.
b) The assets were brought onto the premises with the knowledge that an
impression could be created thereby that the lessee is the owner of the
assets, and the third party fails to correct this impression.
c) The assets were brought onto the premises with the intention to hold
them there permanently.
d) The assets were brought onto the premises for use by the lessee.
 The hypothec comes into operation at the moment the rent falls into arrears and
exists only for the period in which the rent remains in arrears.

PROPER USE OF THE PROPERTY

 During the continuance of the lease, the lessee must act as a bonus paterfamilias
would act in relation to the leased property. - the lessee is obliged to use the leased
property as a reasonable man would use and care for his own property.
 The property should be used for the purpose for which it was leased.
 Unless a different intention appears from the agreement between the parties, the
leased property may not be altered without the lessor’s consent during the
continuance of the contract. – unless the lessee is able to return the property to the
lessor in its original condition upon termination of the lease.

Remedies of The Lessor:

 Specific performance in the form of an interdict may be claimed if the lessee does
not use the property properly.
 Lessor may rescind contract if the breach of contract is sufficiently material i.t.o. lex
commissoria. Damages may also be recovered.

RETURN OF THE PROPERTY ON TERMINATION OF LEASE

 At the end of the lease period, the leased property must be returned in the same
condition as that in which it was received, with due allowance for ordinary wear and
tear necessarily resulting from the effluxion of time and ordinary use of the property.

Remedies of The Lessor:

 If the property is not returned in the same condition as that in which it was received
(for example, where the lessee erected structures on the property without the
lessor’s consent), the lessor has a choice between specific performance and a claim
for damages.
 If the leased property is not returned at all, the lessor can, in the case of immovables,
obtain an eviction order.
  It was held that the courts have a residual common-law power to stay or suspend
(though not to refuse) an eviction order, to allow the lessee a reasonable time to
vacate the premises, and that this power existed in respect of both residential and
commercial leases.
 It was held that the Constitution was applicable to lease agreements and that a
court, before ordering that a lessee should be evicted, has to adhere to section 26(3)
of the Constitution which prescribes that a person may not be evicted before all
relevant circumstances are taken into account.

 Berman Brothers Property Holdings (Pty) Ltd v M and Others –

The court applied, alongside the PIE Act, section 28(2) of the Constitution, in finding that although the
lessee was indeed in unlawful occupation of the leased premises, the best interests of the lessee’s minor
child, who was completing her final year of high school at the time of the hearing, dictated that the
lessee should be evicted from the premises only after the child’s Matric year had been completed.

 If the property is returned in a damaged condition, the lessor cannot refuse to

receive it. His only remedy is a claim for damages.
 Damages are calculated in accordance with the difference between the value of the
property at the end of the term of lease and the value of the property if it were to
have been delivered in a proper condition.
 As a general rule, it can be accepted that the reasonable costs of repair or
maintenance would be an indication of such difference in value.
 The lessor only has a claim for damages suffered once the lease agreement had
terminated and not during the term of the lease agreement.
 Prior to termination of the lease, the lessor has no contractual claim against the
lessee for breach of the duty to return the premises in the same condition in which it
was received even if the property had been damaged prior to this time.

RIGHTS AND DUTIES IMPOSED BY THE RENTAL HOUSING ACT

Under Chapter 3 of the Rental Housing Act 50 of 1999, a lease agreement is deemed to
include terms relating to the following:
a) The lessor shall furnish the lessee with a written receipt for all payments received by
him or her from the lessee.
b) The receipt must be dated and clearly indicate the address, including the street
number and further description, if necessary, of the property in respect of which the
payment was made and whether the payment was made for rent, arrears, deposit or
otherwise and specify the period for which the payment was made.
c) Although the lessor may require the lessee to pay a deposit before moving into the
leased property, such deposit may not exceed an amount specified in the lease
agreement or otherwise agreed upon.
d) The lessor must invest the deposit in an interest-bearing account at a financial
institution, which interest must be paid over to the lessee.
 e) The lessee and lessor must jointly, before the lessee moves into the dwelling, inspect
the dwelling to ascertain whether any defects exist in the property.
f) Upon expiry of the lease, the lessor and the lessee must arrange for a joint inspection
of the dwelling at a mutually convenient time but within a period of three days prior
to the lease’s expiry, with a view to ascertaining whether any damage has been
caused to the property during the continuance of the lease.
g) On expiry of the lease, the lessor may apply the deposit and interest thereon to the
settlement of the lessee’s outstanding amounts, including the reasonable cost of
repairing damage caused to the dwelling and, for example, replacing lost keys.
h) Where no amounts are owing by the lessee to the lessor, the full deposit and interest
must be refunded to the lessee within seven days of the expiry of the lease
agreement.
i) Should the lessee vacate the leased property prior to expiry of the lease, without
notice to the lessor, the lease is deemed to have expired on the date the lessor
established that the lessee has vacated the dwelling.
j) A copy of any house rules applicable to a dwelling must be attached as an annexure
to the lease agreement.
k) Following the promulgation of the Rental Housing Amendment Act 43 of 2007, any
costs in relation to the lease shall be payable by the lessee only upon proof of factual
expenditure by the lessor.

 Section 5(4) of the Act makes it clear that neither a lessee nor a lessor may waive any
of the provisions referred to above.
 A lessor is prohibited from unfairly discriminating against such prospective lessee or
lessees or the members of such lessee’s household or the visitors of such lessee.

The lessee has, among others, the following rights against the lessor:
a) The right to privacy during the lease period, and the lessor may exercise his or her
right of inspection only in a reasonable manner after having given reasonable notice
to the lessee.
b) The right not to have:
(i) his or her person or home searched.
(ii) his or her property searched.
(iii) his or her possessions seized, except in terms of law of general application
and having first obtained a ruling by a tribunal or an order of court; or
(iv) the privacy of his or her communications infringed.

The lessor’s rights against a lessee include:

a) The right to prompt and regular payment of rent or any charges that may be payable
in terms of a lease.
b) The right to recover unpaid rent or any other amount that is due and payable after
obtaining a ruling by the tribunal or an order of a court of law.
c) The right to terminate the lease in respect of rental housing property on grounds
that do not constitute an unfair practice and that are specified in the lease.
 d) The right, on termination of a lease, to:
(i) receive the rental housing property in a good state of repair, fair wear and
tear excluded.
(ii) repossess rental housing property having first obtained an order of court
in accordance with the PIE Act.
e) The right to claim compensation for damage to the rental housing property or any
other improvements on the land on which the dwelling is situated (if any) caused by
the lessee, a member of the lessee's household or a visitor of the lessee.

REMEDIES FOR FAILURE TO COMPLY WITH THE PROVISIONS OF THE

RENTAL HOUSING ACT
 The provisions of the Rental Housing Act are enforced by so-called Rental Housing
Tribunals created under the Act. In terms of the Rental Housing Amendment Act 35
of 2014 (which was yet to take effect in law at the time of writing), a tribunal is
required to be established in each province.