Weekend Argus (Saturday Edition)
Read the lease carefully to avoid conflict later
CONFLICT between tenants and landords may arise if the parties – and any agents – are unsure about their rights and responsibilities.
“This conflict is easily avoided by carefully reading the lease agreement and taking note of the contractual obligations,” says Paul Stevens, CEO of Just Property.
The lease is the contract between the tenant and the landlord that details what is expected of both parties.
A lease should cover all areas, from use of a garden service to keeping pets; how long the agreement will last; what is to be done if circumstances change and the landlord wants to sell the property, or if the tenant wants to leave before the lease is up.
It will also cover maintenance and make provision for the landlord or his agent to regularly inspect the property. It will include details of the deposit, and how and when this will be refunded.
Sometimes landlords will use a lease they have bought from a stationery shop or downloaded online, but these do not necessarily comply with the law, says Michael Bauer, managing director of estate agency SAProperty.com.
“In the past two years, the Rental Housing Act and the Consumer Protection Act (CPA) have made a considerable impact on consumer rights and certain clauses in a residential lease. Clauses regarding notice period of cancellation or annual rental increases should definitely be checked in case they are outdated or unlawful.”
For example, many old “standard” leases included a 10% year-on-year increase, but the CPA now prohibits this. An extension of the lease needs negotiation about a possible rent increase.
In another change, Bauer says the CPA allows a tenant to give 20 working days’ notice to cancel at any time should the need arise. But the landlord can then charge a “reasonable” penalty to help recover his costs. Bauer says one month’s rent is usually considered a reasonable penalty ( which would be paid in addition to a month’s rent in lieu of notice).
If the landlord decides to sell the property, it does not mean the tenant has to move out because the lease precedes the sale, says Adrian Goslett, regional director and chief executive of Re/MAX Southern Africa.
“Essentially, this means the tenant can remain in occupation of the property until the lease lapses.”
But the planned sale can make the tenant anxious about having to deal with new owners, or the renewal terms of the lease. There is also the matter of the new owners’ intentions: if they want to live in the property, they will not want to renew the lease.
“Instead of waiting out the lease, some tenants may want to find alternative accommodation sooner,” says Goslett.
“If this is the case, they will need to read through the lease agreement to see what it says about early termination. If agreed at the signing of the lease, there might be a stipulation giving the tenant the right to cancel the contract should the property be sold.
“If these are the terms and there is mutual consent, the tenant is absolved from any penalties that may arise due to a breach of the agreement.”
If there is no such sale stipulation in the lease, its terms and conditions will be carried over to the new owners, and the tenant could face a penalty if he or she decides to leave.
“An investment buyer may have purchased the property with the intention of retaining the tenant. In this situation, they will be less likely to release the tenant from the lease agreement.”
But honest conversation can help. “Before making decisions regarding cancelling the lease, tenants should talk to the new landlord. Communicating will ensure both parties are on the same page.”