What a lease agree­ment should have

Lesotho Times - - Property -

IF you’re the owner of any kind of res­i­den­tial prop­erty that is be­ing rented out to some­one else, you need a proper writ­ten lease to pro­tect your in­ter­ests, as well as those of your ten­ant.

This is ac­cord­ing to An­drew Schae­fer, MD of Trafal­gar, who says whether you have a gar­den cottage to let, a house at the coast or a high-end, fully-fur­nished apart­ment, a clear and de­tailed lease agree­ment is your best de­fence against mis­un­der­stand­ings and dis­putes with un­re­li­able ten­ants that could re­sult in you los­ing your in­vest­ment.

Ver­bal agree­ments or “hand­shake ar­range­ments” should no longer be valid in any re­spect.

Schae­fer says the best leases are those that leave the least room for doubt on any as­pect of the agree­ment be­tween land­lord and ten­ant, but at the very least, land­lords should make sure that their lease doc­u­ments con­tain the fol­low­ing in­for­ma­tion:

The names and ID num­bers of both land­lord and ten­ant and the street ad­dress of the prop­erty.

A clause de­scrib­ing the prop­erty and stat­ing how many peo­ple may live there.

A clause stat­ing the pe­riod of the lease and what penal­ties may ap­ply if the ten­ant ter­mi­nates the lease prior to the agreed ex­piry date.

A clause stat­ing the amount of rent payable and how and when it should be paid, for ex­am­ple, into a cer­tain bank ac­count on the first of ev­ery month.

A clause de­tail­ing any other charges payable, such as mu­nic­i­pal charges for wa­ter and elec­tric­ity con­sump­tion, or the costs of a se­cu­rity or gar­den ser­vice.

A clause out­lin­ing the re­spon­si­bil­i­ties of the land­lord with re­gard to the main­te­nance of the prop­erty and es­sen­tial re­pairs.

A clause de­tail­ing the re­spon­si­bil­i­ties of the ten­ant with re­gard to look­ing af­ter the prop­erty and us­ing it only for its “proper pur­pose”, for ex­am­ple, not run­ning a busi­ness from a res­i­den­tial prop­erty.

A clause stat­ing how the lease can be re­newed and by how much the rent will go up if it does.

A clause or two stat­ing what the process and con­se­quences will be if ei­ther party breaches the agree­ment. For ex­am­ple, what will hap­pen if the ten­ant does not pay the rent on time or what the ten­ant can do if the land­lord fails to main­tain the prop­erty.

And fi­nally, Schae­fer says it is im­por­tant that the lease agree­ment con­tain a clause that clearly states what de­posit is payable by the ten­ant, what it is for, where it will be kept and in what cir­cum­stances it will be or won’t be re­turned.

Both the land­lord and ten­ant must make sure they keep a copy of the signed lease agree­ment, as well as a copy of the in-go­ing in­spec­tion re­port, he says.

“And if the rental prop­erty is in a sec­tional ti­tle com­plex, the land­lord or man­ag­ing agent must also en­sure that a copy of the Con­duct Rules for that com­plex is at­tached to the ten­ant’s copy of the lease.”

Given the in­creas­ing com­plex­ity of the leg­is­la­tion re­lat­ing to prop­erty rentals, he says land­lords should avoid drawing up their own lease doc­u­ments, and should in­stead seek ex­pert help from a rep­utable man­ag­ing agent.

In ad­di­tion, he says no-one should ever sign a lease un­less they fully un­der­stand the con­tents and im­pli­ca­tions, and should get proper legal ad­vice if they are in any doubt.

— Prop­erty24

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