What to Expect If You Want to Terminate Your Lease Before Expiry | Fox Asset Management

Ending a lease agreement before its expiry date can be a complex process with financial and legal implications. At Fox Asset Management, we guide tenants through lease terminations while ensuring compliance with the Consumer Protection Act (CPA), Property Practitioners Act (PPA), and Protection of Personal Information Act (POPIA).

Below, we outline what you need to know if you're considering terminating your lease early.

1. Notice Period – How Much Time Do You Need to Give?

• As per the Consumer Protection Act (CPA), Section 14, tenants have the right to terminate a lease early with a minimum of 20 business days' written notice.

• Rent remains payable throughout the notice period.

• Notice must be submitted in writing to hello@foxassetmgmt.com.

⏳ Fox Asset Management ensures that notice terms align with CPA regulations to protect tenants and landlords.

2. Financial Obligations of Early Termination

Depending on when and how a lease is terminated, tenants may be liable for the following costs:

Scenario 1: New Tenant Placed Immediately (No Vacancy)

• If a new tenant moves in immediately, the outgoing tenant is only responsible for: 

✅ Procurement & vetting costs (8.5% of the new lease value + VAT, prorated for the remaining term).

✅ Cleaning and any damages recorded in the exit inspection.

Scenario 2: Property Remains Vacant (Rental Loss to Landlord)

• If it takes time to secure a new tenant, the outgoing tenant is responsible for: 

✅ Rent until a replacement tenant is secured (maximum of 3 months).

✅ Procurement & vetting costs (adjusted based on remaining lease term).

✅ Cleaning and damages as per the exit inspection.

🔍 All deductions are calculated fairly and in line with CPA guidelines.

3. Understanding Procurement & Vetting Fees

When a tenant leaves early, the landlord incurs costs to find a replacement. These costs are passed on to the outgoing tenant and are calculated as follows:

Formula:

📌 Example Calculation: If there are 5 months left on the lease and the new rental is R9,850:

• (R9,850 × 12 × 0.085) = R10,038

• VAT (15%) = R1,506

• Total Annual Fee = R11,544

• Pro-rata for 5 months = (R11,544 ÷ 12) × 5 = R4,810

📢 Fox Asset Management ensures that procurement costs are transparent and fairly applied.

4. Exit Inspection & Deposit Refunds

🔹 A professional exit inspection will be conducted to assess any damages.

🔹 If no damages are found, the deposit will be refunded within 14 days.

🔹 If damages require repairs, the refund (or part thereof) will be processed within 20 business days after repairs are completed.

🔹 Outstanding amounts for utilities, cleaning, or unpaid rent will be deducted from the deposit before processing refunds.

🏡 Fox Asset Management ensures a fair and transparent deposit refund process for all tenants.

5. Tips to Minimise Early Termination Costs

✅ Provide notice as early as possible to increase the chances of finding a replacement tenant.

✅ Ensure the property is in good condition to avoid cleaning and damage deductions.

✅ Settle all outstanding bills before vacating to prevent additional charges.

✅ Cooperate with your agent by ensuring they have access to the property for viewings and that the unit is spotless for prospective tenants. Keep in mind that replacement tenants must undergo proper vetting and application approval by the landlord. All tenant replacements are subject to the landlord's final approval. Not just anyone can take over the lease, and there are associated marketing costs and approval processes required. This significantly increases the likelihood of securing a new tenant quickly and reduces the risk of being liable for additional rental payments of up to 3 months.

✅ Remember that all tenant replacements must undergo proper vetting and final landlord approval. The process includes advertising, marketing fees, application reviews, and affordability checks, ensuring that only qualified tenants are approved.

✅ Communicate with your property manager if you need flexibility or assistance.

📞 Need help navigating your lease termination? Contact Fox Asset Management at hello@foxassetmgmt.com.

Final Thoughts

While early lease termination is sometimes unavoidable, understanding your responsibilities can help minimise financial impact. By following CPA-compliant procedures and working with Fox Asset Management, tenants can navigate lease terminations smoothly.

📩 Have questions? Get in touch!

📍 Fox Asset Management – Your Trusted Partner in Rental Solutions!