Question
Muzi leases business premises from Lounge Properties (lessor). The salient terms of the lease agreement are: The lease agreement commences on 1 February and continues
Muzi leases business premises from Lounge Properties (lessor). The salient terms of the lease agreement are:
- The lease agreement commences on 1 February and continues for a period of 18 months.
- The rental amount is R17 500 p.m. which is payable on or before the 3rd of each calendar month into an account nominated by the lessor.
- The lessor nominates the account in the name of Lounge Properties, held with Knight Bank ltd, Pretoria branch, as the account into which payment must be made by Muzi.
- The rental amount is payable monthly in advance.
Failure to pay the rental amount on or before the 3rd day of each calendar month may result in the lessor cancelling the lease agreement. Muzi signs a stop order at Pretoria city centre branch of Fink Bank Ltd, his bank, to pay an amount of R17 500 into the lessor's nominated bank account on the 3rd day of each calendar month. On 1 April, Muzi sub-lets the premises to Leon (and cancels the stop order he put in place). Leon signs a stop order at the Pretoria branch of Knight Bank Ltd, his bank, to pay R17 500 into the lessor's nominated bank account on the 3rd day of each calendar month, commencing on 3 May. By 4 June, Knight Bank Ltd had failed to transfer the R17 500 into the lessor's nominated bank account. As a result, the lessor cancels the lease agreement.
With reference to case law advise Leon whether or not the lessor was entitled to cancel the lease agreement.
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