In South Africa, a lease agreement between a tenant and landlord can be written or verbal. Although the latter isn’t commonly practiced, there are a number of court cases that prove just how complicated and difficult it can become if an eviction is challenged, in most cases, between a landlord and tenant.
Lease agreements are legally binding documents, which can be fraught with potential pitfalls if not approached with care and diligence. In essence the law says that a lease is an agreement between a lessor (landlord) and lessee (tenant), in terms of which the lessor agrees to provide the lessee with the temporary use and enjoyment of a thing, in whole or part. The flip side is that the lessee binds himself to pay a sum of money as compensation (rent) to the lessor, for such use and enjoyment.
These agreements are governed by the Rental Housing Act of ’99, however, an Amendment which was promulgated in 2014, has yet to be implemented, with draft regulations only submitted in 2022. The proposed Amendments carry significant implications, such as it being a criminal offence if a landlord does not provide a tenant with a written lease agreement that complies with all the laws, including local regulations.
In the meantime, landlords are best advised to acquaint themselves with the draft regulations and apply those to a lease agreement, which will avoid having to re-negotiate the contract when the Amendment comes into affect.
Inclusions
There are many online platforms that offer a free, or sample lease agreement, and which can be adapted to individual specifications. However, there are some absolutes that must be included, aside from a description of the property, its address, and names of the two parties entering the agreement, including ID numbers. These include:
- Rent and when it is due.
- Any additional charges for add-on utility usage or amenities.
- The security deposit and terms of returning the deposit at the end of the lease term.
- The lease term and termination of the lease.
- Maintenance and repairs indicating who is responsible for repairs vs structural issues.
- A pets policy.
- Restrictions on how the rental property is used or enjoyed.
It may also be wise to include the following:
- Smoking on the property.
- Exclusive use areas, and parking arrangements.
- Rules, such as number of guests, and their acceptable term of stay.
- Sub-letting or co-living considerations.
- Furniture and appliances included in the agreement.
- Late payment penalties.
- Guarantor details. Who will pay the rent if the primary tenant cannot?
Once an agreement has been reached, both landlord and tenant must have a copy for it to be valid.
Essential tips
- Tenants should read the lease agreement thoroughly, asking questions if need be, to ensure all terms and conditions are understood.
- Both parties should familiarise themselves with rights and responsibilities, and key terms and clauses of the law or local regulations.
- Communication should be clear and professional, be that written or verbal. Landlords should be open to negotiation, but similarly knowledgeable to prevent either party from deviating from the terms of agreement.
- All correspondence should be documented, or noted, and again this is regardless of it being verbal.
- Always abide by the lease terms.
- If a tenant wishes to remain beyond the lease agreement term, a new lease must be signed. Failure to sign means the tenant has no legal right to reside on the property.
- Ensure that the lease agreement complies with the Consumer Protection Act (CPA), which clarifies what are considered discriminatory and unfair practices.
- Note that in terms of the CPA, if a tenant wishes to cancel the lease agreement early, 20 business days notice must be provided. Bear in mind the landlord is entitled to charge a penalty for early cancelation, which is equal to one month’s rental.
- Landlords may opt to use a rental management agent on a commission basis, who will have a mandate to negotiate the rental lease with a tenant.