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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