South African law of lease. The South African law of lease is an area of the legal system in South Africa which describes the rules applicable to a contract of lease (or letting and hiring, Latlocatio conductio, Afrikhuur en verhuring). The law of lease is often discussed as a counterpart to the law of sale. South African law, like its Roman counterpart, recognises three forms of the contract of lease: locatio conductio rei, or renting or hiring of a thing, movable or immovable; locatio conductio operarum, or contract of employment, between an employer and an employee; andlocatio conductio operis, or contract for the supply of services, like the construction of a building, between an employer and independent contractor.
So much in their incidents do these differ, however, that they are best regarded as three different types of contract. This entry is concerned with the first of the three, or what is known in English law as, and commonly called in South Africa, the contract of landlord and tenant. The lease of movable property is subject to the provisions of the National Credit Act (NCA). The NCA does not apply in respect of lease of immovable property; the common- law rules governing such contracts have been left intact. Part C of the NCA. This means that a credit agreement does not include a lease of immovable property. It also means that the definition of a contract of letting and hiring of immovable property remains the same.
Most sources describe the contract of lease as one whereby one party (the lessor) undertakes to grant to the other (the lessee) the temporary use and enjoyment of a thing in return for the latter's undertaking to pay rent. This definition differs from the one contained in the NCA. Some commentators on the Act have observed that it has in fact blended the lease of movables with a sale, and that this could create the problem of determining which naturalia of the contract will apply.
It should be noted that, in terms section 8(4) of the NCA, if the agreement provides that ownership will always remain with the lessor, the agreement is not a lease for the purposes of the NCA. It will, however, be a credit transaction in terms of section 8(4)(f), and will therefore be subject to the NCA, provided that a fee, a charge or interest is payable. A lease in terms of which the lessee pays rent which does not include a fee, charge or interest, and in terms of which ownership remains with the lessor throughout, will not be subject to the NCA. A contract in which a lessee hires property permanently is not a lease; it is another type of contract. See the case of Mutual Construction Co v Komati Dam Joint Venture.
Bilateral juristic act. There are several statutes applicable to the contract of lease. The parties must be mindful of the relevant statutory provisions when drafting the lease. The rights and duties afforded by legislation may not be waived.
For example, section 5(3) of the Rental Housing Act (RHA) sets out certain rights and duties, while section 5(4) states that such provisions may not be waived by either party, as they are for the mutual benefit of both parties. The contract of lease will be deemed to include these provisions.
Such provisions include the provision that, before the tenant takes occupation, there must be a joint inspection of the leased premises for defects and the right to privacy. The contract of lease may be entered into orally, expressly or impliedly. One must bear in mind the provisions of the RHA, especially with regard to what constitutes a . If the tenant requests that the contract be reduced to writing, the landlord has no choice in the matter and must comply. The tenant has the right not to have the property searched and seized except in terms of a law of general application. The exceptio non adimpleti contractus, whereby a defendant may avoid his obligations to the plaintiff based on poor performance by the plaintiff, still applies. See the case of Pete's Warehousing and Sales CC v Bowsink Investments and Ntshiqa v Andreas Supermarket.
Huur gaat voor koop. Roman- Dutch law adopted this position, and it is still in force in South Africa. The modern contract of lease is therefore the Roman locatio conductio rei, the rental or hire of a thing. Contrary to Roman law, however, is that in South Africa prevails the Roman- Dutch doctrine of huur gaat voor koop (. The lessee has under a lease only a personal right against the lessor, allowing him to demand possession of the leased property (res locata). Once the lessee takes possession of the res, he acquires a limited real right erga omnes in the res for the duration of the lease and will thereafter be protected by the maxim huur gaat voor koop. For long leases, every successor- in- title of the lessor is automatically bound by the lease, but for short leases, the successors are not bound until the transfer of the res has been registered, irrespective of whether they are aware of its existence.
The lessee's protection under the rule is conditional on payment of the rent for the unexpired term of the lease to the new lessor. The rule applies only to material terms; it therefore covers the option to renew a lease but does not bind the new lessor in respect of an option to purchase. Lease and other branches of the law.
The rules of a contract of sale are sometimes applied in terms of a contract of lease, as where, for example, a third party fixes the sale or rental price. The rules of a contract of loan are also sometimes applied in terms of a contract of lease. In NBS Boland Bank v One Berg River Driver and Others, the court held that, save, perhaps, where a party is given the power to fix his own prestation, or to fix a purchase price or rental, a stipulation conferring upon a contractual party the right to determine a prestation is unobjectionable. This does not mean that an exercise of such a contractual discretion is necessarily unassailable; it may be voidable at the instance of the other party. It is a rule of the common law that, unless a contractual discretionary power is clearly intended to be completely unfettered, an exercise of such a discretion must be made arbitrio bono viri.
The discretionary powers vested in mortgagees in terms of mortgage bonds conferring upon the mortgagees the right unilaterally to increase the original rate of interest payable by the mortgagor must therefore be subject to the aforesaid inherent limitation. Such a provision in a mortgage bond is therefore valid. In this case, in Van Heerden DCJ's obiter dictum, he noted that it is conceivable, albeit unlikely, that a stipulation may be so worded that an absolute discretion to fix a prestation is conferred on one of the parties. In these circumstances, it is unnecessary to express a view as to whether such a stipulation will be invalid as being in conflict with public policy, or whether the fixing of the prestation may only be assailed when it is done in bad faith. See also the case of Benlou Properties v Vector Graphics.
Source of rules and proof of contract's existence. Examples of such statutes are ESTA, PIE, Land Reform Labour Tenants Act, RHA and NCA. Note the case of Pete's Warehousing, noted above.
Regarding the common law in terms of competing leases, see the case of Croatia Meat v Millenium Properties. In these circumstances, it is noted that one must apply the rules of contract. See also the cases of De Jager v Sisana, Schmidt v Dwyer and Southernport Developments v Transnet. Essentials of the contract.
According to Karin Lehmann, the word . Consequently, so- called . The lessee's right to commodus usus is one of the naturalia of a contract of lease.
Where the profitability of the lessee's business has been reduced, the lessee's commodus usus has been impaired. In Sishen Hotel v Suid- Afrikaanse Yster en Staal Industri. Botha AJ thus introduced the principle of equality into the law of lease by protecting the interests of the lessee against both direct and indirect interference with the profitable use of the leased thing. The conclusion that the right to profitability is an ex lege term in all commercial leases appears to have been received with mixed feelings and remains under suspicion. The extension was challenged in Sweets from Heaven v Ster Kinekor, where the question of the future profitability of leased premises arose when the lessor let property in the close vicinity of the lessee's premises to a business competitor of the first lessee. In Sishen, Botha JA had approached the question of whether or not a breach of the duty to provide commodus usus by the lessor constitutes a breach of contract as a question of the content of the lessor's common- law obligations to the lessee. Malan J, in Sweets from Heaven followed the approach submitted by Cooper: that the question of whether or not a lessor has committed a breach of contract can be decided only with reference to the terms of the contract.
A tacit term is implied where the contract is silent on the point, but it is clear that the parties intended the term to be part of their agreement; they would not have contracted otherwise than on the basis of that term. In such a case, the common intention of the parties is inferred by the court from the express terms of the contract and the surrounding circumstances. It is not necessary that the parties should have consciously envisaged the situation; it is sufficient that their common intention was such that a reference to such a situation by the hypothetical bystander would have obtained a unanimous assertion of the implied term. Conversely, a term implied by law is one that the law attaches to the particular class of contract in the absence of agreement to the contrary by the parties. These terms are the naturalia of the contract.
The obligation to provide the lessee with commodus usus is one such term; therefore, where the parties do not explicitly include a term in the contract which excludes this obligation, it will be implied by law.
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