What happens if I break my lease early?

You can usually get out of a fixed-term lease early. The Consumer Protection Act 68 of 2008 lets a consumer cancel a fixed-term agreement, including most residential leases, by giving 20 business days written notice. The landlord cannot refuse. What the landlord can do is charge a reasonable cancellation penalty, and claim any rent, utilities or damage you actually owe up to the point the property is re-let.

That is a very different thing from being liable for every month left on the lease, which is what many leases claim and many landlords believe.

Does the Consumer Protection Act cover your lease?

In most residential situations, yes. The Act applies where the landlord rents out property in the ordinary course of business, which covers professional landlords, letting agents and people who own one or more properties as an investment. It protects tenants who are individuals, and small juristic persons below the statutory threshold.

It may not apply where the landlord is a private person letting out a home as a genuine once-off, for example someone renting out their house while working abroad for a year. If the Act does not apply, your lease governs everything and cancelling early is a breach unless the lease has its own early termination clause. Read the lease first.

Note that the same 20 business days works both ways in a sense. A landlord can also cancel on 20 business days notice, but only after giving you written notice of a material breach and 20 business days to put it right.

How to cancel properly

1. Put it in writing. Email or a letter, not a phone call. State the property, the date of the notice, and that you are cancelling in terms of the Consumer Protection Act on 20 business days notice.
2. Count business days, not calendar days. Twenty business days is roughly a calendar month, but weekends and public holidays do not count, so work it out on a calendar.
3. Keep proof of delivery. A sent email with a read receipt, a signed acknowledgement or a courier slip.
4. Ask the landlord in writing what cancellation penalty is claimed and how it was calculated.
5. Keep paying rent until the notice period runs out and you have handed back the keys.
6. Arrange a joint outgoing inspection so your deposit comes back cleanly. See How long does a landlord have to return my deposit?.

What a reasonable cancellation penalty looks like

The Act allows a "reasonable cancellation penalty" but does not fix an amount, and there is no set formula. What is reasonable is judged on the circumstances, including how much of the lease was left to run, how much notice you gave, the value of what remains under the lease, how easily the landlord can find a replacement tenant, and what is normal practice in the rental industry.

In practice this means a penalty covering the landlord's genuine re-letting costs, such as an agent's placement commission, advertising and the credit check on the new tenant, plus rent for the period the unit actually stands empty while a new tenant is found. On a lease with eight months left, cancelled with a month's notice in a market where the flat re-lets in three weeks, a penalty equal to eight months rent is not reasonable and a Tribunal is unlikely to allow it.

The landlord also has a duty to limit the loss. A landlord who does nothing to advertise the property and then bills you for six empty months has not acted reasonably, and that failure counts against the claim.

Clauses that do not save the landlord

A lease cannot take away rights the Consumer Protection Act gives you. So a clause saying you may not cancel at all, or that you forfeit the deposit automatically, or that the full balance of the rent becomes immediately payable, generally does not stand up against a consumer tenant. Neither does a clause forcing you to find a replacement tenant yourself, though offering a good replacement is a practical way to reduce the penalty and is worth doing.

Your deposit is separate from the penalty. It must still be accounted for and refunded with interest, less lawful deductions.

If you and the landlord cannot agree

• Write a short letter setting out what you accept you owe and what you dispute.
• Refer the matter to the Rental Housing Tribunal in your province. It is free, and unfair practices in the way a lease is cancelled fall squarely within what it hears.
• For amounts up to R20 000, the Small Claims Court is free and quick, and neither side uses lawyers.
• Legal Aid South Africa on 0800 110 110 can direct you if you cannot afford advice.

If you are the landlord

You are not powerless, but you cannot simply hold the tenant to the whole term. Respond to the cancellation in writing, set out the penalty with a calculation and supporting invoices, advertise the property promptly and keep the evidence that you did, and account for the deposit properly. A documented, proportionate penalty is far more likely to be paid, and far more likely to survive a Tribunal hearing, than a demand for the full balance.

Related reading: Can my landlord increase rent mid-lease?.

LawMatch is not a law firm and this page is general information, not legal advice about your lease.