In a recent Western Cape High Court case, the Court was faced with such a question and had to decide whether a lessee could claim for remission from the lessor if it was the sub-lessee that was deprived of the property’s use.
Through careful consideration, the Court found that two distinct contracts had been entered into: the main lease agreement between the lessee and lessor, and a secondary lease between the lessee and sub-lessee. Due to the simple fact that the lessee had not actively enjoyed use of the property beforehand (seeing as it let the property out to the sub-lessee), the Court deemed that the lessee had no grounds for remission in their rent. Similarly, the sub-lessee could not claim remission directly from the lessor as there exists no legal agreement between them.
As of this writing, the judgment is on appeal at the Supreme Court of Appeal, where the involved parties are waiting to see if its ruling mirrors the High Court’s decision.
This case highlights how important it is for lessors and lessees to carefully consider the terms of their lease agreement and to draft sub-leases clearly with the necessary foresight. When entering into a lease agreement where sub-leases will be involved, lessees should discuss the terms of their sub-leases with the primary lessors as well to ensure a mutually beneficial relationship going forward.
For support in all your property law matters and the drafting of lease agreements, get in touch with CMM Attorneys.
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)