Dylan Pillay believed he had struck the perfect deal. His fast-growing auto parts supply company needed more room than the family garage could offer, and a vacant light-industrial unit near the N3 looked ideal. A brief lease agreement recorded that he could move in on 01 March; during friendly conversation the owner mentioned “a year, maybe two,” and nothing more was said. Shelving went up, forklifts rolled in, and Dylan focused on meeting orders flowing in from dealerships across KwaZulu-Natal.
Ten months later everything changed. The landlord announced that a relative was launching a new venture and wanted the unit. An e-mail arrived instructing Dylan to vacate in four weeks or face eviction. Moving two hundred square metres of stock and machinery in the middle of peak season would be expensive, disruptive and, if a suitable replacement site was not found quickly, catastrophic for delivery deadlines. The crisis stemmed from a single omission: the lease did not say when it would end or how either party could bring it to a close.
What the Law implies when the Contract is Silent
South African courts treat a commercial lease with a definite start date but no finish line as a periodic agreement that renews automatically after each rental cycle. Either party may terminate it on “reasonable notice”. Reasonableness depends on context. For a furniture-free micro-office, one month might suffice; for a warehouse filled with racking, hazardous-materials permits and long-term supply contracts, a court is more likely to regard two or three months as fair.
In Dylan’s situation the landlord’s four-week ultimatum was unlikely to pass the test. Courts look at industry norms, the lead time needed to dismantle and reinstall equipment, and the financial harm abrupt relocation would cause. They also consider the landlord’s circumstances: genuine hardship on the owner’s side can shorten the notice that must be given, but mere preference for a handier tenant seldom carries much weight.
How a business can respond when time is too short
Because the lease said nothing about termination, Dylan could not insist on occupying the premises for the verbal “year or two.” He could, however, challenge the length of the notice. The usual first step is negotiation; if talks fail, urgent court proceedings may be necessary. A judge can extend the notice period, order the deposit returned immediately so the tenant can secure a new site, and require the landlord to maintain essential services until departure. For owners, that outcome means legal costs, delayed plans and – ironically – more time before the property is free.
An undefined term looks flexible but in practice invites costly surprises. Tenants risk sudden business interruption, lost goodwill and wasted investment in fit-out. Landlords face empty periods if litigation stalls access, strained cash flow, and reputational blow-back in a tight rental market. Banks and insurers also view uncertain tenure with suspicion, which can complicate financing or raise premiums.
Put Certainty on Paper
Avoiding this trap is simple. A commercial lease does not need to be a legal tome, yet four points should always appear in plain language.
First, the parties must agree on duration: either a fixed calendar end date, or a minimum notice period that reflects the realities of the trade. Second, they should spell out how early cancellation works, including the form of notice, lead time and any financial consequences. Third, deposit rules – interest, legitimate deductions and repayment deadlines – should be clear. Finally, the contract must explain what happens if either side breaches: the grace period for unpaid rent, the landlord’s rights of access, and the route to dispute resolution.
Had Dylan insisted on these paragraphs before signing, the landlord’s change of plan would have triggered a predictable process instead of an emergency.
Even where a lease is already in place, a rushed eviction is not inevitable. Dylan and the landlord could still draw up a short addendum. A practical compromise might allow Dylan to stay three months, keep paying rent and remove improvements methodically, while the landlord lists the unit but delays hand-over to the relative. If Dylan needs extra security, the parties can agree that the deposit is inspected and released early so he can book movers and pay a deposit elsewhere. Such negotiated solutions usually cost less and preserve neighbourly relations that make business smoother for both parties.
Lessons for Commercial Tenants and Property Owners
For tenants, the message is stark: never pour capital into premises without a written guarantee of how long you may stay. A lawyer’s fee for reviewing a short lease is negligible compared with relocation costs triggered by an abrupt notice. For landlords, clarity is equally valuable. A definite term with a tailored break clause lets you recover the property for family projects or redevelopment without springing unwelcome surprises on a reliable rent-payer and ending up in court.
Commercial property provides more than shelter; it underpins a business’s continuity. Leaving the end date to chance may feel accommodating at the outset, yet it can throw both parties into expensive uncertainty when circumstances shift. Whether you own the warehouse or fill it with vital stock, agree on the finish line – and how to reach it safely – before the first delivery truck arrives.
By Wilco du Toit | Senior Associate and Aaliyah Razak | Candidate Attorney
RMI4law members enjoy the benefit of legal advice from an attorney 24 hours a day. If you wish to join RMI4law, call 0861 668 677.
Auto & General Insurance Company Limited is a licensed non-life Insurer and Financial Services Provider.