The Sequel Isn’t Automatically “Month-to-Month”
Most South Africans assume that, when a fixed-term lease expires and the tenant quietly stays on with the landlord’s blessing, the contract simply morphs into a month-to-month rental. It feels logical – like a straight-to-streaming sequel that keeps the story alive for another 30 days. Yet our common-law doctrine of tacit relocation and section 14 of the Consumer Protection Act (“CPA”) tell a more nuanced tale. If you are a landlord or a tenant relying on that easy assumption, you may be working off the wrong script.
Tacit relocation – The silent reboot
Under South African Common Law a lease doesn’t evaporate at midnight on its expiry date. If neither side gives notice and the tenant remains in occupation with consent, the lease renews by tacit relocation – an implied agreement inferred from the parties’ conduct. All the original terms (rent, escalation clauses, maintenance obligations, etc.) survive; only the fixed duration is replaced by an indefinite period that lasts until one party gives “reasonable” notice. The courts decide the length of that notice by reading the parties’ intentions and the circumstances – urban residential property often warrants a calendar month, while rural farmland or warehouse space can justify a full year. The critical point: nothing in the doctrine says the new term must be month-to-month.
Where the “month-to-month” myth comes from
Popular blogs and rental checklists routinely state that tacit relocation transforms every lease into a 30-day arrangement. Some of that confusion flows from section 5(5) of the Rental Housing Act, which recognises that if the parties expressly agree to let the tenant hold over after expiry, the lease will “continue on the same terms on a month-to-month basis.” But that statutory default applies only when the parties’ intention is clear; it does not displace common-law rules where the intention is silent or ambiguous. Landlords who rely on the “automatic month-to-month” idea sometimes find themselves stuck with a far longer notice period than expected, while tenants who assume a flexible exit discover they are liable for several extra months of rent.
The Consumer Protection Act: Rewriting the Third Act
Since 2011, many residential leases have been “fixed-term consumer agreements” under section 14 of the CPA. Where the tenant is a natural person and the landlord is “in the ordinary course of business”, the CPA overrides parts of common law:
- The landlord must remind the tenant 40–80 business days before expiry that the term is ending and set out any renewal options.
- If neither side acts, the lease rolls over indefinitely but either party may cancel on at least 20 business days’ notice (effectively a month).
- Those rights exist regardless of what the original lease said about notice after expiry.
Crucially, that 20-business-day rule is not the same as an automatic month-to-month lease. It is a statutory right of cancellation that co-exists with tacit relocation: the contractual relationship continues until valid notice is given in writing.
Practical take-aways before the credits roll
For landlords
- Plan the sequel early. Send renewal reminders well before the 40-day CPA window. Decide whether you want the tenant to stay – and on what terms.
- Put it in writing. If you prefer a true month-to-month after expiry, record that expressly and require one calendar month’s notice in clear terms.
- Don’t assume “reasonable notice” means 30 days. If the original lease ran year-to-year (common with commercial property), a court may see a year as the baseline.
For tenants
- Confirm CPA coverage. If you lease as a trust, company or close corporation, section 14 may not apply; your notice period could be much longer.
- Treat silence as dangerous. Staying on without a written extension can leave you liable for an unexpected rental tail.
- Read the fine print on rent increases. Under tacit relocation, escalation clauses remain in force unless renegotiated.
Avoid the plot twist
A tacit lease is not a one-size-fits-all month-to-month arrangement; its length hinges on the invisible intentions of the parties and, where relevant, the CPA’s 20-business-day exit rule. Whether you own a portfolio of high-end rentals or you’re the tenant of a luxury apartment, clarity today saves costly drama tomorrow. Get the renewal – or the termination – in writing and roll the credits on any lingering uncertainty.
By Wilco du Toit | Senior Associate – Barnard
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