Sub-letting of rental properties

Sub-letting of rental properties

Private Property South Africa
Sarah-Jane Meyer

Sub-letting with or without the landlord’s permission is a growing trend as tenants continue to feel financial pressure.

Many tenants who might no longer be able to afford their rentals are finding ways to defray expenses by letting rooms in their rented homes to sub-tenants.

Dexter Leite, Pam Golding Properties Western Cape Rentals Manager, says that sub-letting of rental properties is potentially fraught with challenges for tenants and landlords.

Tenant risks

“Sub-letting could be risky for tenants,” says Leite.

“You are inviting someone you don’t know to share your home, which could be a security risk. Even if the new occupant is not a dangerous criminal, you and the sub-tenant may be incompatible in a shared living scenario. In particular, the use of common areas like the living room and kitchen could be challenging for both of you. Other possible issues could include visitors, parties and noise pollution.

“Also, what if your sub-tenant defaults on the agreed rent or utility contribution? You would be required to take steps, which could involve costly legal advice or action against someone living in your space 24/7. This would be uncomfortable for all parties concerned.”

Also bear in mind that you are effectively becoming a sub-landlord, so the particulars of any new sub-tenant need to be verified. You need to check their affordability levels, income, past tenancy conduct where possible, and so on. Most tenants are not equipped to do this.”

Landlords

From a landlord’s point of view, Leite says, there would be a sub-leasing arrangement - formal or informal - in place. This potentially holds risk, particularly in a breach of lease scenario and/or if the sub-tenant refuses to vacate the premises when required to do so.

He believes a joint lease is preferable from the commencement of the lease, with both parties committing to the lease jointly.

“Such a joint lease should preferably be with someone you already know and with whom you believe you could get on within a shared living scenario. Both parties need to discuss and agree on all the relevant aspects in a joint tenancy scenario, before concluding a lease.

“Seemingly elementary decisions such as who supplies the fridge/freezer or how food is stored and shared can become challenging if not agreed upfront.”

Agreed sub-letting

“If all aspects are fully considered and properly documented and dealt with, all may go well,” says Leite.

He says that any sub-letting agreement should be recorded in writing - with the landlord’s written consent, if this is a prerequisite in terms of the main lease.

All the salient aspects should be recorded in such an agreement, which in itself requires “legal” thought and application. For example:

  • Who pays for utilities - is it a percentage contribution?
  • Who pays the damages deposit?
  • Who will attend ingoing and outgoing inspections?
  • Who is responsible for any damage to the property and how is this determined?
  • Use of parking bays.
  • Common area use.
  • Furnishings.
  • Complying with management and conduct rules if applicable.

“Importantly, the sub-tenant needs to be bound to the relevant provisions of the main lease as they apply to the tenant,” says Leite.

“However, if your rental home is big enough to share, it may be prudent to first explore the option of renting a smaller or cheaper home, where you remain the sole tenant. In this way you will avoid all the above risks,” says Leite.

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