Written for Property Poser

This week’s Property Poser reader question is from a landlord whose letting agent has become a huge source of frustration.

The reader says while his tenant pays on time every month and takes care of the leased property, the letting agent avoids his telephone calls and is often late with the transfer of rental payments.

This situation has become unacceptable to him as landlord and his questions relate to the cancellation of his agreement with the agent.

The existing contract expires at the end of the year, but he wishes to cancel before such time and set up a “new lease with the same tenant with or without another agent”.

The reader’s next question concerns the deposit currently held by the agent and whether he has any right to refuse to pay it over should the reader choose to cancel his agreement with the agent.

Jacques Ehlers from Du Toit Strömbeck Attorneys in Port Elizabeth says the terms and conditions of the existing agreement and its termination will be contained in the contract. “One has to examine the document to determine what the rights and obligations of both parties are.”

Ehlers says the agreement will state whether it is for a fixed term or not and what provisions have been made for its cancellation upon notice by either party.

“As a rule, where an agreement is entered into between two parties for a fixed term (that is with a specified termination date), no provision is made for its early termination.”

However, says Ehlers, it may be that the agreement makes provision for the cancellation of the contract by either party upon an act or omission by the other, if it constitutes breach of the agreement.

“Stipulations may be contained whereby the party in breach is to be put on terms and if the breach is not remedied, the ‘offended’ party may cancel the agreement.”

Charlotte Vermaak from Chas Everitt in PE says all of these issues are dependent on a careful examination of the agreement. “However, certain general principles of contract law may become applicable if there is no written contract or if the agreement is silent on certain points.”

Vermaak says the cancellation or otherwise of the contract between the landlord and letting agent should not affect or negate the existence of the lease between landlord and tenant.

“Certain terms, such as to whom the rental is paid over should the letting agent be removed from the equation, may change, by agreement.”

Should the reader be in a position to cancel the contract with the letting agent, the latter would be obliged to pay over the deposit, according to Vermaak. “The agent does not hold it for his own benefit, but on behalf of the landlord, subject to the provisions of the Rental Housing Act.”

Once the underlying contract has come to an end, says Vermaak, no basis will exist upon which the agent is entitled to hold the deposit.

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