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Home » Legal News » “Reasonable” Penalty and early lease cancellation

June 30, 2015 By Wesley Mathew 1 Comment

“Reasonable” Penalty and early lease cancellation

How does the landlord calculate a “reasonable” penalty for early cancellation of the lease agreement?

Regulation 5 issued in terms of the Act requires the landlord to take the following into account when calculating a reasonable penalty:

  • the amount which the consumer is still liable for to the supplier up to the date of cancellation;
  • the value of the transaction up to cancellation;
  • the value of the goods which will remain in the possession of the consumer after cancellation;
  • the value of the goods that are returned to the supplier;
  • the duration of the consumer agreement as initially agreed;
  • losses suffered or benefits accrued by consumer as a result of the consumer entering into the consumer agreement;
  • the nature of the goods or services that were reserved or booked;
  • the length of notice of cancellation provided by the consumer;
  • the reasonable potential for the service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice and the time of the cancelled reservation; and
  • the general practice of the relevant industry.

Notwithstanding the above, the landlord may not charge a charge which would have the effect of negating the consumer’s right to cancel a fixed term consumer agreement as afforded to the consumer by the Act.

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Comments

  1. Leon du Plessis says

    October 24, 2018 at 6:32 pm

    Hi I have cancelled a 12 month lease end of month 11 paying R20 000 rent per month I gave 2 months notice now the retal agent wants to deduct the full R20000 from my deposit is this legal or fair?

    Reply

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Le Roux Attorneys Inc. is a Cape Town based law firm specializing in residential, corporate and farm evictions. We are members of the Law Society of the Cape of Good Hope as well as the Attorneys’ Fidelity Fund, guaranteeing clients both expert assistance and the peace of mind that all funds held in trust are securely underwritten by a certified statutory body. Le Roux Attorneys' immigration division trades as SAvisas.com and assists companies and individuals with their South Africa visa requirements.

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