Reference no: EM132627904
1. On 1 March 2020 she entered into a written, fixed-term lease agreement with Andile Seshoka in terms of which Seshoka leased to her a property situated at 19 Main Road (owned by him) for a monthly rental of R12000 for a two year period until 28 February 2022.
2. The premises had been used by the previous lessees as a restaurant for several years. After your client had satisfied herself (after a thorough analysis of the prospects of success) that a restaurant business was a viable proposition, she concluded the lease agreement with the intention of opening Thuli's Diner.
3. Seshoka knew that this was her intention, and it was a term of the agreement that the property was being leased for the purposes of a restaurant business, and not for residential or any other purposes.
4. It was a further term of the agreement that the lessor would ensure that the restaurant license in the name of the previous tenant would be transferred into Thuli's name, which was duly done.
5. On 27 March 2020 a State of Disaster was declared by Government due to the Covid-19 pandemic, and restaurants (along with most of the economy) were not permitted to operate. Thuli adapted to this setback, however, and used the time to prepare for the opening of her business.
6. In June 2020, before the lockdown regulations permitted her to open the Thuli's Diner, Thuli received notice from the local Municipality that a portion of Main Road, including no. 19, had been re-zoned for residential purposes in order to make way for much-needed accommodation for students at the local university. The notice stated that the re-zoning would take effect on 1 August 2020, and that her license to pursue her restaurant business would be withdrawn from that date.
7. Thuli immediately told Seshoka about this, who said that he knew nothing about the intended re-zoning. He was mortified by the news, as he had renovated and refurbished the premises several years ago specifically for the purposes of a restaurant at great personal expense, and doubted that he would be able to find a new tenant. Further, he would have to spend a lot of money to renovate the premises for residential purposes.
8. On 30 June 2020 Thuli delivered a letter to Seshoka in which she cancelled the lease agreement in terms of section 14(2)(b)(i)(bb) of the Consumer Protection Act 68 of 2008. In the letter she advised him of her intention to vacate the premises on 31 July 2020, which she duly did, having paid the rental due until that date.
9. In August Thuli was shocked to receive a letter from Seshoka's attorneys demanding cancellation penalties amounting to the equivalent of three months rental (R36 000) in terms of section 14(3)(b)(i) of the Consumer Protection Act.
Provide Thuli with a legal opinion as to her legal rights and obligations, and advise her on her prospects of successfully defending any claim for cancellation penalties.
Refrence list
1. Bayley v Harwood 1953 (3) SA 239 (T); 1954 (3) SA 498 (A).
2.Wilson v Smith and Another 1956 (1) SA 393 (W).
3.Section 14 of the Consumer Protection Act 68 of 2008.
4.D Hutchison and C Pretorius (eds) The Law of Contract in South Africa 3 ed (2017) chapter 8.