TIP

CityPress - - Business -

If it’s time to re­new the lease for your rental prop­erty, don’t just ac­cept the rental in­crease. Ac­cord­ing to Shaun Groves, Gaut­eng rental man­ager for Lew Gef­fen Sotheby’s In­ter­na­tional Realty, the days of a stan­dard 10% year-on-year in­crease are long gone.

He says the Con­sumer Pro­tec­tion Act in ef­fect pro­hibits “con­tract­ing out of law”, which means that when the orig­i­nal lease is drawn up, as­sum­ing the orig­i­nal term is only for 12 months, it can’t con­tain a set per­cent­age es­ca­la­tion clause for year two. In ef­fect, rent hikes must be ne­go­ti­ated and agreed to at the time of the re­newal.

Ten­ants of good stand­ing should re­mind land­lords of this fact when the lease is up for re­newal, and should in­clude an up-to-date credit re­port to mo­ti­vate for a smaller in­crease.

Groves adds that ten­ants should do their home­work and try to find prac­ti­cal com­pro­mises.

“Of­fer to take over pay­ment of the gar­den/pool ser­vice or, if there are no ad­di­tional ser­vices or costs, per­haps of­fer to re­paint the in­te­rior or ex­te­rior in a colour of the land­lord’s choice in ex­change for a re­duced rental in­crease.”

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