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.”