C&A Friedlander Attorneys

Lease agreements are contracts entered into between a lessor and a lessee for a specified period of time, allowing a lessee to occupy and enjoy the property for that aforementioned period. Most lease agreements have renewal periods after one year and they do not need to be registered at the Deeds Office.

A notarial lease agreement is a contract between the lessor and the lessee, signed before a notary public and registered at the Deeds Office. This contract allows the lessee the temporary use and enjoyment of the property in exchange for a consideration paid to the lessor.

A notarial lease agreement in respect of immovable property can only be registered at the Deeds Office if:

  • the lease is for 10 years or longer;
  • the lease is for the natural life of the lessee or any other party to the lease agreement; and
  • the lease agreement will be renewed from time to time.

There are four essential terms that need to be identified in the lease agreement. Firstly, the parties to the agreement need to be identified – the lessor being the registered owner of the property and the lessee being the person or entity wishing to make use of the property. Secondly, the object of the lease agreement needs to be stated – most commonly the “use and enjoyment of the property”. Thirdly, the term of the lease period needs to be temporary; for a long-term lease specifically this needs to be for a period of 10 years or longer. Lastly, there needs to be a consideration payable for the “use and enjoyment of the property” – this is generally your monthly rental, however, for long-term and commercial leases it is not uncommon for the consideration to be expressed in different terms. For example, the consideration payable could be expressed as a percentage of revenue, or it could be a determinable calculation payable annually.

Notarial leases may be hypothecated in terms of section 81 of the Deeds Registries Act 47 of 1937. A mortgage bond may be registered if the lease is in terms of immovable property and a notarial bond may be registered if the lease is in terms of movable property.

A notarial lease may be cancelled for various reasons, such as early termination by both parties. If parties decide to cancel their notarial lease before the expiry date, both parties need enter into a written agreement. This agreement must be notarial executed and thereafter registered at the same Deeds Office as the initial notarial lease agreement.

Notarial lease agreements offer the parties security and ensure that their obligations are maintained toward one another. It creates a real right for the lessee to enjoy the property without disturbance, and it is enforceable against third parties.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).