SCA: Latest Judgment On Rental Lease Agreement Renewals

Where parties fail to timeously reach an agreement on the rental for a renewal period and they do not invoke a clause providing for the rental to be fixed by a third party, this will result in the lapse of the lease agreement by the effluxion of time. This was confirmed in the Supreme Court of Appeal ("SCA") judgment in Mlungisi Ndodana Sontsele v 140 Main Street Properties CC and Another, which was delivered on 7 July 2020.

Facts

The judgment concerned a notarial agreement of lease concluded on 29 June 2004 between Mr Sontsele together with his mother and the lessee, 140 Main Street Properties CC.

The lease agreement included the following terms:

• commencement on 1 July 2004 and termination on 31 May 2014;