The Real Purpose of the 40-80 Business Day Notice (Many Agents Still Miss This)
The 40-80 business day notice under Section 14 of the CPA remains one of the simplest — yet most misunderstood — requirements in residential rentals. When agents get the 40-80 business day notice wrong, the consequences can be serious: unexpected vacancies, lost rental income, angry landlords… and sometimes even claims against the agent.
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Why this notice matters
The 40-80 business day notice under Section 14 of the CPA is not just admin. It is the formal trigger that tells the tenant their fixed-term lease is ending and starts the conversation about what happens next. Used correctly, the 40-80 business day notice protects both the landlord and the agent from costly surprises.
So let’s simplify it.
Core Principle
The sole purpose of this notice is to inform the tenant that their fixed-term lease is about to expire and to outline their options.
That’s it. Nothing more. Nothing less.
Everything else — renewal conversations, exit planning, and month-to-month discussions — comes afterwards. The 40-80 business day notice simply sets the stage.
The Default Position: The Lease Ends
This is the single most important fact every agent must remember:
Unless ALL parties agree to extend the lease, AND document the extension, the lease ends on the expiry date.
Most leases contain a clause requiring all amendments to be in writing and agreed to by all parties. That means:
- Verbal agreements carry no weight
- WhatsApp messages are not good enough
- “The tenant said they’ll stay” means nothing legally
- You cannot hold a tenant liable after expiry without written agreement to contiue past the end date
If there is no agreed, written agreement in place, the tenant is fully entitled to leave on the last day of the lease — and you have no recourse.
This is where agents get caught out, and where landlords often hold their agents responsible for the lost rental.
Why the 40-80 Business Day Notice Isn’t a Month-to-Month Safety Net
Many agents still think, “If nothing is done, it just rolls into month-to-month.”
Yes — but only on the expiration of the lease. The 40-80 business day notice is there to make sure everyone knows that expiry is coming and to avoid a shock vacancy.
That means if your lease expires at 12:00 on the last day of the month, the tenant can move out at 11:59 and you cannot stop them. The landlord now has a sudden vacancy… and who do you think they will hold liable?
The risk in real numbers
If you’ve earned 10% every month for a year (120% of one month’s rent), but now need to compensate the landlord for a month’s loss, you’ve effectively worked the whole year for just
20% of one month’s rental.
Completely avoidable — if the correct process is followed.
The Notice Must Clearly State the Tenant’s Options
The 40-80 business day notice is not a renewal request.
It is a notification + options letter.
It must clearly set out:
- The upcoming expiry date
- The tenant’s available options
- Whether the landlord will or will not offer an extension
- The exact terms of any offer (new rent, deposit changes, conditions, confirmation/alteration of contact details for formal notices, etc.)
- The deadline for the tenant to respond
Sometimes the landlord does not want to extend — the notice must state this clearly.
If an extension or renewal is offered, the exact terms must appear in the notice itself, not after the tenant “lets you know”.
The 40-80 business day notice is what formally starts the next process (exit or renewal/extension) and puts everything on record.
The Tenant Must Choose — Then YOU Act
Once the tenant responds (or once you extract a response — and yes, that is our responsibility), you move into the next phase:
- If they’re leaving → start the exit process
- If they’re staying → draft and document the extension
Until the extension is documented and agreed to by all parties, the lease is ending.
Agents often say, “Tenants just don’t respond.” But follow-up is part of the job. You cannot wait. You must drive the process.
In Episode 2520 of the RentalSphere Inner Circle, we covered scripts, strategies, and escalation steps to guarantee a clear response — all built around a clear, well-timed 40-80 business day notice.
Never Forget: The Lease Is Ending Until It’s Not
This is the mindset shift every rental agent needs:
The lease is ending unless — and only unless — there is a written extension in place.
Assumptions, casual comments, and “the tenant said…” do not protect anyone.
Your role is to control the process:
- Notify (using a compliant 40-80 business day notice)
- Present options
- Set deadlines
- Get commitment
- Get the agreement documented and agreed to by all parties
Want the Complete Blueprint? Watch Episode 2520
This article gives only a high-level overview.
The full step-by-step process — including templates, wording, legal considerations, compliance, and best-practice workflow for issuing the 40-80 business day notice — is covered in:
🎙 INNER CIRCLE LIVE Episode 2520
“The 40-80 Business Day Letter: The CPA Notice That Can Save Your Landlord (and You)”
And don’t miss our Bumper December LIVE where we’ll be releasing our brand-new, redesigned Pro Power Packs covering:
- The 40-80 Business Day Notice, and
- The Lease Renewal Process
This is our third renewal-related update in 12 months, ensuring members always have best-practice, legally compliant process documents to close gaps that can cost agents money.
The replay is available immediately in the Inner Circle Library.
👉 Join the Inner Circle here:
https://rentalsphere.co.za/rentalsphere-inner-circle/
Further reading on Section 14 & renewals
If you’d like to go deeper on renewals, the 40-80 business day notice, and Section 14 CPA compliance:
FAQs on the 40-80 Business Day Notice
Is the 40-80 business day notice the same as a renewal request?
No. The 40-80 business day notice is a compliance requirement under Section 14 of the CPA. Its purpose is to notify the tenant that their fixed-term lease is about to expire and to outline their options — not to negotiate terms.
Does a lease automatically roll over to month-to-month if I don’t get a signed extension?
It may convert to month-to-month BUT only on expiry and only if the tenant remains in occupation with the landlord’s permission. Until a written extension is entered into, you must operate on the basis that the lease is ending.
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