LEASE Unit 5: Termination of lease contract
6 most common terminations of lease contract: 1. TERMINATION BY EFFLUXION OF TIME/ LAPSE OF TIME 2. TERMINATION BY NOTICE 3. TERMINATION BY CANCELLATION 4. TERMINATION BY EXTINCTION OF TITLE 5. TERMINATION BY DEATH 6. TERMINATION BY INSOLVENCY
1. BY LAPSE OF TIME: A lease for a fixed period or until the occurrence of a specified event respectively terminates upon the expiration of the period of time for which the property was let or the event occurs. No notice of termination is required . Periodic /or “indefinite leases”: can be terminated by notice given by the lessor or the lessee. The notice period is either by contractual agreement or “ reasonable notice” must be given. “Reasonable notice”: certain guidelines have emerged over the years (Pg 185 examples: expires at the end of a period; and reasonable time to find another tenant/lessee or other premises). A lease at the will of the lessor or lessee may be terminated by either party ‘at will’ by giving reasonable notice at any time. The terms/manner of notice to terminate a lease must be clear and the notice is effective only if it comes to the actual knowledge of the other party. 2. BY NOTICE:
By Cancellation clause where the lease contract is silent on cancellation – and one of the parties commits a material breach then such aggrieved party, could elect to cancel the lease.
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