[Business Aviation case 2006 (6) SA 605 (SCA): held that the Placaeten apply to rural leases, while the common law applies to urban leases].
LEARNING UNIT 7: RENEWAL OF LEASE CONTRACT 1. Common law
Renewal of a lease takes place when immediately upon the expiration of the lease the lessee continues to hire the same property from the same lessor (tacit). Renewal takes places expressly, pre-emptive right is exercised ito an express clause in the lease contract. Although the parties and the subject matter must be the same for renewal, but the terms of the original agreement may be varied. [Note: terms may vary because Renewal of Lease brings about a new lease and is not a continuation of the old lease.] An agreement to renew the lease contract between the parties may be reached expressly or tacitly. Pre-emptive right Types of renewal 1.1) EXPRESS RENEWAL : This form of renewal is commonly effected by the exercise of an option to renew that is granted in favour of the lessee in the form of an express lease clause, or by a separate contract entered into during the currency of the lease known as an option agreement. The offer/option to renew is completed by the acceptance/exercise of the option, so that acceptance/exercise thereof will bring a new lease contract into existence whose terms are certain and definite. 1.2) TACIT RENEWAL: This is an implied agreement to release. The agreement is concluded btw the lessor and lessee to permit the lessee to remain in occupation after the termination of the lease for the payment of rent from the lessee for the use and enjoyment of the property.
[Note: Parties continue with the lease arrangement after termination – i.e. implied renewal by the behaviour of the parties.] Where the parties have not made a determination as to a fixed period for renewal, it is inferred that the intention was an indefinite period terminable on reasonable notice. Rent: If the parties did not say anything to the contrary, Pothier is of the opinion that a tacit renewal ‘is taken to be made at the same rent as that of the preceding lease contract and on the same conditions’. WHEREAS: W.E. Cooper is of the opinion that this statement by Pothier is too wide. Cooper prefers the view that was expressed in: [Doll House Refreshments (Pty) Ltd v O’Shea 1957 (1) SA 345 (T)] “The relocation/continuation is tacit, there is a presumption that the property is re-let at the same rent and that those provisions that are incidental to the relationship of landlord and tenant are renewed. But provisions that are collateral, independent of and not incidental to that relationship are not presumed to be incorporated in the new letting. THE DELETED LINE IN DOLL HOUSE HAS BEEN OVERRULED BY THE (CC) IN MOKONE V TASSOS IN 2017. Mokone v Tassos Properties 2017 (CC) Common law- case law development CC ruled that pre-emptive rights such as rights of first refusal need not comply with the formalities set out in the ALA.
- Winter '16
- Carey Robertson
- Common Law, Lessor