The lessor’s obligations in a contract of lease

Legal Matters with Arthur Marara

There are two parties to a lease agreement: lessor and lessee. This week, I am discontinuing a potentially lengthy discussion into the essential elements of the lease so that we can discuss the obligations of one of the parties, the lessor. Next week, we will look at the obligations of the lessee. The majority of disputes between the parties to a lease agreement emanate from a breach of the obligations.

The obligations of either party can be (1) expressly set out in the contract of lease, (2) can be implied from its contents or (3) can form part of the residual obligations of a contract of lease. “Residual obligations” are those obligations that are imposed by law [statute and/or common law]. The term “residual obligation” was first coined by Professor Kerr. They automatically apply to a contract of lease unless the parties remove or alter them. It must, however be, noted that parties cannot agree to disobey the law.

There are three main residual obligations of the lessor to a contract of lease. These are:

1. a) The obligation to deliver the thing left to the lessee on the due date free from impediments and in a fit condition for the purpose leased.
2. b) The obligation to ensure the lessee’s undisturbed use and enjoyment of the thing let.
3. c) The obligation to pay the rates and taxes.

We are going to look at the obligations one after the other, and explore the available legal remedies in the event of a breach.

1. a) The obligation to deliver the thing let to the lessee on the due date free from impediments and in a fit condition for the purpose leased.

This can be summarised as “the duty to deliver”. The lessor’s main duty is to give the lessee the use and enjoyment of the thing let. This means that his or her first duty is to deliver the thing to the lessee. The lessor must place the thing at the disposal of the lessee in such a manner that he or she is able to enjoy undisturbed occupation of it.

If the property is movable, the lessor would have to deliver the thing physically to the lessee. If the property is immovable, delivery could be effected by, for example, arranging that a previous tenant is not in occupation and by handing over the keys to the premises. In the case of a long-term lease, the lessor’s duty to deliver includes the duty to co-operate in registration of the lease should the lessee desire registration of the long lease.

There must be clarity as to what is being leased. The thing that the lessor must deliver to the lessee is the thing they agreed upon. Parties often dispute the subject matter of the lease, particularly as regards to what “additional” things or facilities are necessary for the proper enjoyment of the property.

The question arises as to what “additional” things or facilities are necessary for proper enjoyment of the thing let. Voet (at 19.2.14) states that the lessor is bound to make available “all those things without which one cannot have convenient use”.

The parties must agree on the delivery dates to avoid problems. The commencement date of the lease either expressly or impliedly. If the thing let is not available on that date, the lessee will need to put the lessor to terms by demanding delivery. If the lessor fails to do so, the lessee can cancel the contract.

In the case of Levy v Rose (1903) 20 SC 189, the defendant agreed to give the plaintiff a five-year lease without specifying the commencement date.

At the time of the agreement on January 3, the premises were not complete and it was agreed that the plaintiff would be given occupation at the end of January.

The house was still not ready at the end of January and, so, the plaintiff agreed to an extension until March 1. On March 1, the plaintiff was given occupation but almost immediately he was told to vacate again for about 10 days so that the defendant could acquire an occupation licence, the necessity for which he had overlooked.

The plaintiff alleged a breach of the contract, vacated the premises and claimed cancellation of the lease and damages.

The lessor is obliged to give peaceful and undisturbed possession of the property to the lessee. Any previous lessees or trespassers must be evicted from the property. The lessor must, in addition, remove any goods that may interfere with the lessee’s use and enjoyment. In the case of Bourbon-Leftley v Turner 1963 (2) SA 104 (C), it was held that a large Aga Cooker left in the kitchen was something that was “likely to interfere materially with the enjoyment of occupation”.

The lessor must deliver the thing in a condition that will enable the lessee to use and enjoy the thing let. The parties usually agree upon the kind of condition, but in the absence of agreement, the lessor must place the leased property in a condition reasonably fit for the purpose for which it was let.

This means, when something is let for a specific purpose, the lessor is deemed to have given a tacit undertaking that it will be reasonably fit for that purpose, for example, a shop, hotel or factory. This is often the condition in which it was at the time of contracting.

To be Continued . . .

LEGAL DISCLAIMER: The material contained in this article is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. It is not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expenses incurred as a result of relying in particular circumstances on statements made in the article. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements. For legal advice, you should consult with an attorney concerning your specific situation.

 

Arthur Marara is a corporate law attorney. He has specialised in employment law matters, having worked with corporates, trade unions and individuals in their labour matters. He is also a notary public and conveyancer. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email [email protected].