Accurate
Country-specific legal content
Drafted with legal expertise for each jurisdiction, far more thorough than AI-generated drafts that copy generic clauses across borders.
Rental & PropertyZA
Commercial Lease Agreement Template – South Africa
A commercial lease agreement governs the letting of business premises in South Africa. Our free South African commercial lease template covers rental in ZAR, annual escalation, deposit, tenant fit-out rights, and obligations under the Consumer Protection Act 68 of 2008.
Free to useInstant PDFNo account required
PDF (free) + editable Word (.docx) with Expert
COMMERCIAL LEASE AGREEMENT
LANDLORD
Nkosi Properties (Pty) Ltd
14 Maude Street, Sandton, Johannesburg 2196
Reg 2015/123456/07
VAT 4123456789
Reg 2015/123456/07
VAT 4123456789
By: Sipho Nkosi, Director
TENANT
Cape Digital Solutions (Pty) Ltd
8 Boundary Road, Century City, Cape Town 7441
Reg 2020/567890/07
Reg 2020/567890/07
By: Ayanda Dlamini, Chief Executive Officer
Commencement: 1 June 2026
Expiry: 31 May 2029 · Rent: ZAR 45 000,00 p.m. excl. VAT
This Commercial Lease Agreement ("Lease") is entered into between Nkosi Properties (Pty) Ltd (the "Landlord") and Cape Digital Solutions (Pty) Ltd (the "Tenant"). This Lease is governed by the laws of the Republic of South Africa, including the common law of lease (Roman-Dutch heritage), the Value-Added Tax Act 89 of 1991, the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE Act), the Conventional Penalties Act 15 of 1962, the Prescribed Rate of Interest Act 55 of 1975, the Electronic Communications and Transactions Act 25 of 2002 and the Protection of Personal Information Act 4 of 2013 (POPIA). The Rental Housing Act 50 of 1999 does not apply (it governs residential leases only). The Tenant is a juristic person with annual turnover exceeding ZAR 2 million; section 14 of the Consumer Protection Act 68 of 2008 therefore does not apply to this Lease.
1.
LEASE OF PREMISES
The Landlord lets to the Tenant, and the Tenant takes from the Landlord, the commercial premises situated at 22 Fredman Drive, Sandton, Johannesburg 2196 (Ground-floor office suite, Unit G1, approximately 350 m²) (the "Premises"), for the sole purpose of General office and administrative use. The Premises are let voetstoots (as-is) subject to all existing conditions, servitudes and rights affecting the property.
| Address | 22 Fredman Drive, Sandton, Johannesburg 2196 |
| Description | Ground-floor office suite, Unit G1 |
| Rentable Area | 350 m² |
| Permitted Use | General office and administrative use |
| Parking | 4 dedicated basement parking bays (B-12 to B-15) included in the monthly rental. |
2.
LEASE TERM
This Lease commences on 1 June 2026 and expires on 31 May 2029 (the "Term"), unless terminated earlier in accordance with this Lease. Either party may terminate this Lease at the expiry of the Term by giving not less than 60 calendar days' written notice. Continuation of occupation beyond the Term with the Landlord's acquiescence shall constitute a month-to-month lease on the same terms, terminable on 60 calendar days' written notice.
3.
RENTAL AND PAYMENT
The Tenant shall pay to the Landlord a base monthly rental of ZAR 45 000,00 exclusive of VAT, plus VAT at 15% (currently ZAR 6 750,00), totalling ZAR 51 750,00 inclusive of VAT per month, under the Value-Added Tax Act 89 of 1991. Rental is payable in advance on or before the 1st day of each calendar month by electronic funds transfer into the Landlord's nominated bank account. Time is of the essence with respect to payment of rental. The Tenant shall not be entitled to withhold, defer or set off any rental or other amount due without the prior written consent of the Landlord.
4.
ANNUAL ESCALATION
The base monthly rental shall escalate by 7% per annum, compounded annually, on each anniversary of the commencement date. The Landlord shall notify the Tenant in writing of the escalated rental amount at least 30 (thirty) days before the escalation takes effect.
5.
SECURITY DEPOSIT
The Tenant shall pay a security deposit of ZAR 135 000,00 on or before the commencement date. The deposit shall be held by the Landlord in an interest-bearing account. The deposit (with accrued interest, if any) shall be refunded to the Tenant within fourteen (14) days after the expiry or termination of this Lease and vacation of the Premises, less any amounts lawfully deductible for rental arrears, damages, or unpaid utility charges. The Landlord shall provide the Tenant with a written statement of any deductions within the same period.
6.
ELECTRICAL COMPLIANCE
The Landlord has provided the Tenant with a current valid Electrical Certificate of Compliance (CoC) issued by a registered electrician under the Electrical Installation Regulations of the Occupational Health and Safety Act 85 of 1993. The CoC is attached as an annexure to this Lease.
7.
OCCUPATION AND CONDITION
The Tenant shall take occupation on the commencement date and shall maintain the Premises in a clean, tidy and operational condition throughout the Term. The Tenant is responsible for minor day-to-day maintenance. The Landlord is responsible for structural repairs, roof maintenance and repairs to the exterior of the building, save where caused by the Tenant's negligence or that of its employees, invitees or contractors. A joint inspection report (snag list) shall be completed by the parties on the commencement date and shall form part of this Lease.
8.
ALTERATIONS, IMPROVEMENTS AND USE
The Tenant shall not make any structural or permanent alterations, improvements or additions to the Premises without the prior written consent of the Landlord, which consent shall not be unreasonably withheld. Approved alterations shall be carried out in a workmanlike manner in compliance with all applicable building regulations, by-laws and zoning requirements at the Tenant's cost. Any proposed change to the Permitted Use — including (without limitation) a change of category, sub-letting in respect of a different use, or change of customer-facing trading style — requires the prior written consent of the Landlord, which consent may be granted, refused or conditioned in the Landlord's reasonable discretion having regard to zoning, insurance and the building's tenant mix.
9.
OPERATING COSTS AND UTILITIES
Municipal rates and assessment rates attributable to the Premises only. The Tenant shall be responsible for, and shall pay directly, all utility charges relating to the Premises (electricity, water, gas, telecommunications, refuse removal) and shall arrange its own connections and accounts with the relevant service providers. The Tenant shall not permit any utility supply to be cut off due to non-payment. Where the Tenant occupies premises forming part of a body corporate or sectional title scheme, levies attributable to the Premises shall be recovered from the Tenant in accordance with the recovery model above.
10.
LANDLORD'S LIEN (TACIT HYPOTHEC)
The Landlord has a tacit hypothec (huur gaat voor koop) over all movable property of the Tenant on the Premises as security for unpaid rental and other amounts due under this Lease, as recognised under South African common law (Roman-Dutch heritage). This right entitles the Landlord, on Tenant default, to apply to court for the attachment and sale in execution of such movable property. The Tenant confirms that it will not remove movable property from the Premises while any amount is due and unpaid without the prior written consent of the Landlord.
11.
SUBLETTING AND CESSION
The Tenant shall not sublet the Premises or any part thereof, nor cede or assign any of its rights or obligations under this Lease, without the prior written consent of the Landlord, which may be withheld in the Landlord's reasonable discretion. Any purported assignment, subletting or cession without consent shall be void and shall constitute a material breach of this Lease.
12.
INSURANCE
The Tenant shall, at its own cost, obtain and maintain throughout the Term: (a) public liability insurance of not less than ZAR 10 000 000 per claim; and (b) insurance against loss or damage to the Tenant's own assets, stock and equipment on the Premises. The Landlord shall insure the building against fire, storm and other standard perils, and shall maintain Sasria political-violence cover. Each party shall not do or permit anything that would void or prejudice the other party's insurance cover. The Tenant shall provide proof of its insurance cover to the Landlord on request.
13.
PREMISES FIXTURES INVENTORY
The Premises include the fixtures, finishes and equipment listed below in the conditions recorded at the commencement inspection. The Tenant is responsible for their safekeeping and for their return on termination of this Lease in equivalent condition, subject to the Make-Good Obligation clause and fair wear and tear.
| Built-in air-conditioning — 4 x ducted Daikin units | Qty 4 · Condition: Excellent — last serviced March 2026 · Replacement: ZAR 180 000 |
| Open-plan office partitions and finishes | Qty 1 · Condition: Good — minor wear on corner panels · Replacement: ZAR 95 000 |
| Boardroom AV system — projector + ceiling mics | Qty 1 · Condition: Excellent · Replacement: ZAR 85 000 |
| Kitchenette fittings — sink, hob, microwave, fridge | Qty 1 · Condition: Good · Replacement: ZAR 38 000 |
14.
MAKE-GOOD OBLIGATION ON TERMINATION
On termination of this Lease, the Tenant shall return the Premises to the Landlord in the condition recorded at the commencement inspection, fair wear and tear excepted. The Tenant shall not be required to remove fit-out and improvements approved by the Landlord, unless the Landlord requires removal by written notice given at least sixty (60) days before the termination date.
15.
BREACH AND REMEDIES
If either party commits a material breach of this Lease and fails to remedy the breach within seven (7) business days of receipt of written notice (or such longer reasonable period as the nature of the breach requires), the aggrieved party may cancel this Lease on written notice and claim damages. Without prejudice to the foregoing, late-paid rental and other arrears shall, in addition to interest, attract a contractual penalty of 2% per month on the overdue amount, enforceable under the Conventional Penalties Act 15 of 1962, subject to judicial reduction if grossly disproportionate. Nothing in this clause limits either party's right to seek an urgent interdict in the High Court where immediate relief is required.
16.
EARLY TERMINATION BY TENANT
If the Tenant cancels this Lease before the expiry of the Term (other than for material breach by the Landlord), the Tenant shall give the Landlord at least 60 calendar days' written notice and shall pay the Landlord an early-termination penalty equal to 3 month(s)' rental (calculated at the then-current rental rate inclusive of VAT), together with all outstanding amounts due under this Lease.
17.
LEGAL COSTS
If the Landlord is required to take legal action to enforce any provision of this Lease (including recovery of arrears, eviction proceedings or arbitration), the Tenant shall be liable for all legal costs incurred by the Landlord on an attorney-and-client scale, including counsel's fees and disbursements, recoverable as a debt.
18.
EVICTION
On cancellation of this Lease the Tenant shall vacate the Premises immediately on written demand. The Landlord acknowledges that self-help eviction is prohibited. Any eviction of the Tenant shall be effected strictly in accordance with the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE Act) and the relevant court process under the Magistrates' Courts Act 32 of 1944 or the Superior Courts Act 10 of 2013, as applicable.
19.
FORCE MAJEURE — INCLUDING LOADSHEDDING
Neither party shall be in breach of this Lease or liable for any delay in performing or failure to perform its obligations (other than the Tenant's payment of rent) where the failure or delay results from circumstances beyond its reasonable control, including: (a) sustained loadshedding above stage 6 declared by Eskom or the relevant municipal utility; (b) interruption of municipal water supply for more than 48 hours; (c) acts of God, pandemic, civil unrest or natural disaster; or (d) cyberattacks on national infrastructure. The affected party shall promptly notify the other and take all reasonable steps to mitigate the effect of the force-majeure event.
20.
ANTI-BRIBERY AND CORRUPTION
Each party warrants that neither it nor any of its representatives have, in connection with this Lease, paid, offered, promised or authorised any payment, gift or other thing of value to any public official or private person with the intent of obtaining or retaining business or any improper advantage, in contravention of the Prevention and Combating of Corrupt Activities Act 12 of 2004 (PRECCA), the UK Bribery Act 2010, the US Foreign Corrupt Practices Act 1977, or any equivalent legislation. Any breach of this clause constitutes a material breach.
21.
PRIVACY AND DATA PROTECTION (POPIA)
Each party shall process personal information of the other party's personnel, directors or representatives in connection with this Lease in accordance with the Protection of Personal Information Act 4 of 2013 (POPIA). Each party shall implement appropriate technical and organisational measures to ensure the security of personal information and shall not process such information for any purpose other than the administration of this Lease.
22.
ELECTRONIC EXECUTION
This Lease may be signed electronically. Electronic signatures are valid and enforceable under sections 11 and 13 of the Electronic Communications and Transactions Act 25 of 2002 (ECT Act) and have the same legal effect as handwritten signatures, unless this Lease falls within a category expressly excluded under Schedule 2 of the ECT Act.
23.
GOVERNING LAW AND JURISDICTION
This Lease is governed by and construed in accordance with the laws of the Republic of South Africa. The parties irrevocably submit to the jurisdiction of the High Court of South Africa, Gauteng Division, Johannesburg for the resolution of all disputes arising out of or in connection with this Lease.
24.
GENERAL PROVISIONS
Entire Agreement: This Lease constitutes the entire agreement between the parties on its subject matter.
Amendment: No amendment is binding unless in writing and signed by both parties.
Severability: Any invalid provision shall be severed; the remaining provisions remain in force.
Waiver: No failure to enforce any provision shall constitute a waiver of future enforcement.
Notices: Written notices shall be delivered by hand, registered post or email to the addresses recorded above.
Counterparts: This Lease may be signed in counterparts, each constituting an original.
Domicilium: Each party chooses its address recorded above as its domicilium citandi et executandi for the service of all legal process.
Amendment: No amendment is binding unless in writing and signed by both parties.
Severability: Any invalid provision shall be severed; the remaining provisions remain in force.
Waiver: No failure to enforce any provision shall constitute a waiver of future enforcement.
Notices: Written notices shall be delivered by hand, registered post or email to the addresses recorded above.
Counterparts: This Lease may be signed in counterparts, each constituting an original.
Domicilium: Each party chooses its address recorded above as its domicilium citandi et executandi for the service of all legal process.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.
LANDLORD
Sipho Nkosi
Director
Nkosi Properties (Pty) Ltd
Date: ____________________
TENANT
Ayanda Dlamini
Chief Executive Officer
Cape Digital Solutions (Pty) Ltd
Date: ____________________
Available as a print-ready PDF or an editable Microsoft Word (.docx) file.
What Is a Commercial Lease Agreement in South Africa?
A commercial lease agreement is a written contract between a landlord (lessor) and a business tenant (lessee) that sets out the terms on which commercial premises — such as office space, retail premises, a warehouse, or industrial property — are let in South Africa. It covers the rental amount in ZAR, the lease term, annual rental escalation, deposit, permitted use, maintenance responsibilities, sub-letting restrictions, tenant fit-out rights, and the grounds for termination. A well-drafted commercial lease protects both the landlord's investment and the tenant's ability to operate their business.
South African commercial leases are primarily governed by the common law of lease (locatio conductio rei), derived from Roman-Dutch law. Unlike residential leases, commercial leases are not governed by the Rental Housing Act 50 of 1999, which applies only to residential tenancies. The Consumer Protection Act 68 of 2008 (CPA) applies to commercial leases where the tenant is a "consumer" under the Act — broadly, a small business with an annual turnover or asset value below the prescribed threshold. CPA-qualifying tenants have the right to cancel a fixed-term lease with 20 business days' written notice, subject to a reasonable cancellation penalty.
Commercial property in South Africa is subject to VAT at the standard rate of 15% under the Value-Added Tax Act 89 of 1991 if the landlord is VAT-registered. The lease agreement should clearly state whether the rental is exclusive or inclusive of VAT. Rental income derived from commercial property is also subject to income tax under the Income Tax Act 58 of 1962. From a practical perspective, South African commercial leases commonly include annual rental escalation clauses (typically 8 to 10% per annum), deposit requirements, tenant installation (fit-out) provisions, and comprehensive maintenance allocation between landlord and tenant. POPIA 4 of 2013 applies to the personal information of the parties processed in connection with the lease.
What's Covered in This Template
Our South African commercial lease agreement template covers every essential term for the letting of business premises.
Landlord and Tenant Details
Full legal names, CIPC registration numbers, VAT numbers, and addresses of the landlord and tenant.
Premises Description
Full address, description, size (m²), and erf number of the commercial premises being let.
Lease Term
Commencement date, duration of the lease, and any option to renew at the tenant's election.
Monthly Rental
Monthly rental in ZAR (R), whether exclusive or inclusive of VAT, and the payment date each month.
Annual Rental Escalation
The annual escalation rate (fixed percentage or CPI-linked) applicable on each anniversary of the lease.
Rental Deposit
The deposit amount, conditions for holding and investing the deposit, and the return of the deposit on termination.
Permitted Use
The specific business activities the tenant is authorised to conduct from the premises — and any prohibited uses.
Maintenance Obligations
Allocation of maintenance responsibilities between landlord (structural, external) and tenant (internal, fair wear and tear).
Tenant Installation Rights
Rights to install fixtures, signage, or tenant improvements, and the obligation to reinstate on termination.
Sub-letting and Assignment
Restrictions on sub-letting or assigning the lease without the landlord's prior written consent.
Breach and Termination
Notice of breach, cure periods, and the landlord's right to cancel and claim damages or accelerated rent.
Governing Law
South African law governs the lease, with the appropriate South African court having jurisdiction over disputes.
How to Create a Commercial Lease Agreement in South Africa
Follow these steps to produce a comprehensive South African commercial lease agreement.
- 1
Identify the Parties and Premises
Record the landlord's and tenant's full legal names, CIPC numbers, and addresses, and describe the premises fully.
- 2
Set the Lease Term and Rental
Specify the commencement date, lease duration, monthly rental in ZAR (R), VAT treatment, and annual escalation rate.
- 3
Address Deposit and Permitted Use
State the deposit amount, the permitted business use, and any specific restrictions on use of the premises.
- 4
Allocate Maintenance and Fit-Out Rights
Define maintenance responsibilities clearly and specify the tenant's rights (if any) to install improvements or signage.
- 5
Review and Download
Review all terms for South African legal compliance, then download the commercial lease as a PDF for signature by both parties.
Why Doxuno documents are different
Four things that make our templates more thorough than AI-generated drafts and more current than static template libraries.
Always current
Always current with the law
Templates carrying statute references are continuously updated as the law changes. Your document always reflects the current legal framework.
Free PDF
Print-ready PDF
Free to download. Vector text, embedded fonts, statute citations baked in. Print, sign, file. Ready for any signing flow including electronic signature.
Word · .docx
Editable Word (.docx)
Continue editing in Word after download. Add custom clauses, reuse the template for similar agreements, or share with a colleague for collaborative review.
Requires Expert one-time unlock or any paid Doxuno subscription.
Legal Considerations
South African commercial leases must address CPA applicability, VAT treatment, and common law obligations.
This template is for informational purposes only and does not constitute legal advice. Consult a qualified South African attorney for advice specific to your situation.
Reviewed for South African law
CPA Cancellation Rights for Business Tenants
The Consumer Protection Act 68 of 2008 applies to commercial leases where the tenant is a consumer — broadly, a juristic person with annual turnover or asset value below a prescribed threshold (currently R2 million). A CPA-qualifying tenant may cancel a fixed-term commercial lease with 20 business days' written notice under Section 14 of the CPA. A reasonable cancellation penalty is permissible, but it must be proportionate to the landlord's actual loss. Landlords should consider whether their tenants qualify as consumers when drafting the lease.
VAT on Commercial Rentals
If the landlord is a VAT vendor in South Africa, rental on commercial premises is subject to VAT at 15% under the Value-Added Tax Act 89 of 1991. The landlord must issue monthly tax invoices complying with Section 20 of the VAT Act. A VAT-registered tenant is generally entitled to claim the VAT on commercial rentals as input tax. The lease agreement should specify whether the stated rental is exclusive or inclusive of VAT to avoid disputes. Residential accommodation is VAT-exempt, but commercial accommodation is standard-rated.
SPLUMA and Zoning Compliance
Commercial premises in South Africa must be zoned for the use to which the tenant intends to put them. The Spatial Planning and Land Use Management Act 16 of 2013 (SPLUMA) and municipal zoning schemes regulate permitted land uses. The landlord should warrant in the lease that the premises are zoned for the permitted use. A tenant who uses premises in contravention of the applicable zoning scheme may face municipal enforcement action and may not be able to trade lawfully from the premises, potentially triggering lease termination rights.
Frequently Asked Questions
Create Your South African Commercial Lease Agreement Now
Protect your commercial property investment with a professional lease agreement for South Africa. Download your PDF in minutes.
Free PDF · Editable Word with Expert · No account required