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Rental agreements: The devil is in the detail

Published Oct 26, 2020

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For both landlords and tenants, a good lease drawn up with legal advice means they can avoid potential arguments later, says an expert.

The economic situation

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and ongoing impact of the Covid-19 lockdown is seeing many South African homeowners considering a switch to

renting

and tenants looking to downscale.

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finding a good tenant

has always been a difficult task and this challenge will be bigger in the current climate.

Even after the lease is signed many things can go wrong, says Ben Shaw, chief executive of digital rental platform

Clauses regarding payment

The lease should note the amount of rent payable each month, the due dates, how it will be paid – such as cash or EFT – and any late payment charges. It should also state the utilities that are available and how these will be charged.

“Water, electricity, sewage and refuse removal may be included in the rent but rates, levies and taxes generally aren’t,” he says.

Clauses about ongoing use

Clarify who will be responsible for damage, repairs and maintenance. Typically, the tenant is contractually responsible for keeping the property neat, clean and free of unnecessary damage, and for repairing intentional damage or damage caused by negligence.

“Outline the rules in terms of pets, noise and smoking. If there are complex or body corporate rules, attach them to the lease. You may also want to include when, and in which circumstances, the landlord/owner can enter the unit, for example, to conduct a property inspection.”

Clauses on ending the lease

Shaw says the lease should also list the requirements of both parties to renew, and the cost or rental price implications. And landlords should consider what will happen in the event of a breach of contract or lease cancellation.

Common pitfalls to avoid

Landlords who are drafting their own lease agreements should proceed with caution, for several reasons, he warns. “Firstly, well-intended clauses could trip you up later unless they are written in a way that cannot be misinterpreted. Secondly, there are strict laws governing the rights and obligations of landlords and tenants, and some of the clauses you include in your lease agreement may not hold up in court if they contravene these rules.”

Landlords should also note that rental laws change, so a lease agreement that was compliant when it was drafted may no longer be valid a few years later.

Ensuring your lease is watertight

At the very least, it is essential to read the Rental Housing Act and the Rental Housing Amendment Act before finalising lease drafts. In addition, it is worthwhile consulting a legal or rental expert, particularly someone who has experience in handling landlord and tenant disputes.

“Alternatively, you can purchase an existing lease from rental agencies as a basis for your draft. That way, you benefit from others’ rental expertise but still, have the flexibility to include your own clauses such as house rules.”

Shaw says

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