Cancelling your lease without the hidden costs


Many tenants will be looking to downgrade to more affordable premises by cancelling their leases. If you are unable to keep up with your monthly rental, the sooner you take action to move, the more affordable rental the better.

Seeff advises tenants to take care to ensure that you cancel your lease properly and downgrade safely without incurring further costs:

Cancelling your existing lease agreement

In terms of the Consumer Protection Act (the CPA), section 14, you can cancel your existing lease by giving twenty business days’ notice, but you need to ensure this by doing so in writing.

You will be responsible for your rent until your notice period ends. If you are in arrears, you need to make payment arrangements or negotiate a compromise with your landlord as you will require a good credit record if you want to apply for a new rental property.

It is at the landlord’s discretion to charge a reasonable cancellation fee which will consider the time that it will take to get a new tenant and, the costs of securing the new tenant. Most contracts now stipulate a reasonable penalty.

At the end of the notice period, your deposit (together with interest) must be refunded to you within fourteen days’ in terms of the Rental Housing Act. However, the landlord may deduct outstanding rent, a reasonable penalty, and the cost of damage repairs.

To avoid damage repair costs, ensure that the property is in the same condition as it was when you took occupation. Ensure that you attend the exit inspection with the agent and/ the landlord to agree on damage and the cost of repairs (if any) and to return the keys. If you do not attend, you could be vulnerable in terms of what the landlord could deduct for damages.

Important points about your new lease

Before occupation:

  • Ensure that you enter a professionally drawn up lease agreement which protects your interest as well as that of the landlord. There needs to be an upfront stipulation of what the reasonable penalty would be should you need to terminate the lease early.
  • You will require a deposit equivalent to one to two months’ rent as well as the first month’s rent to pay upfront. There will also be an upfront admin or contract fee for your account.  
  • Make sure that there is an incoming inspection with the agent and/ landlord. All defects and damages should be stipulated in an addendum to the lease agreement. This will be important when you it comes to your deposit being refunded.
  • Maintain a good credit record by paying your rent on time. By being a good tenant, you can ensure that you get as much of your deposit back at the end of the lease agreement.