Understanding lease agreements
Category Rentals
A lease agreement is vital for any landlord to ensure that its interests are protected in the highly regulated environment of rental properties.
These agreements are legal contracts between the landlord/owner (lessor) and tenant (lessee) granting occupancy on certain conditions and in return for payment of rent, and are governed by the Rental Housing Act and the Consumer Protection Act.
The agreement should be in writing and signed by both parties and should include certain annexures and actions. It should include the names and addresses of the parties, a property description, the rental and how and when it must be paid, and a reasonable escalation.
A start and end date and period should also be included as well as a notice period (usually one calendar month as legally required), and importantly, a stipulation in terms of the cancellation penalty that will apply.
The rental deposit amount should also be included, and for further protection, the conditions under which it will be withheld, and the process for returning the deposit at the end of the lease. The withholding or right to deduct would usually include any arrear rent as well as the cost of damage repairs, subject to certain conditions.
There should also be a provision for maintenance and repairs such as who is responsible for what, as well as what happens in the event of repairs needed due to tenant negligence. Also, how the tenant must go about reporting any maintenance or repairs needed from the landlord.
The payment of utilities and services should also be included. Usually, the landlord pays the property rates and levies (in the case of sectional title and estate properties for example) while the tenant would be responsible for utilities and usage such as water, electricity, refuse removal, garden services etc.
Additional clauses would cover the responsibilities of the parties, and any other conditions of occupancy.
An important section relates to breach of contract and the process that must be followed to ensure legality. Breach usually include aspects such as late or failure to pay the rental amount, breach of conditions of occupancy or the rules of the complex or estate, damage to the property, or if the tenant fails to vacate the property at the end of the lease, etc.
Following the legal processes is vital. The landlord may not cut off the tenant's access to basic utilities and services, lock the tenant out of the premises, or evict the tenant without following due legal process, the latter for example requiring a legal eviction order of court.
An important annexure is a Condition of Property Report which is now required in terms of the Property Practitioner's Act. It sets out the condition of the property including any defects and must be signed by the landlord and tenant. It also forms the basis for the incoming and outgoing inspection of the property and refunding of the rental deposit.
There may also be additional annexures. For example, if the property is furnished, there could be a schedule listing the furniture and furnishings, condition thereof and so on. House Rules which apply to sectional title or estate property should also be annexed.
Certain aspects may not be included in a lease agreement such as penalties for late payment of rent, other than interest. Although the landlord may stipulate the number of people who may live in the property, it may not discriminate on any basis including race, gender, marital status, age, disability or religion, or regulate who may visit the tenant.
A strong agreement of lease and working with a skilled rental agent will ensure the landlord's interests are well protected. At Seeff, Home is our Story, and property our passion. We are skilled and experienced rental agents, and our clients' top class back-office services and the latest technology.
For a hassle-free rental experience, please feel free to contact one of our rental agents today.
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Author: Gina Meintjes
