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Rent

Rental Income - Eviction Lawyer South Africa

Keep your rental income flowing freely

By | Evictions, Lease Agreement, Rent | No Comments

Rental Income - Eviction Lawyer South Africa

 

Have you recently become a landlord? Or maybe you’ve had problems with tenants in the past and want a bit of guidance to avoid trouble in the future? We’ve laid out the key things you need to know when embarking on a rental agreement with a new tenant.

 

Is a formal lease necessary?

 

A written lease is not essential for your agreement to be binding, but it can save a lot of hassle later on and prevent disputes over ‘who said what?’ Putting everything in writing will clarify the terms and conditions of the rental agreement and ensure you have captured all the minutiae that can lead to conflict if not addressed at the outset. Are pets allowed? Can your tenant let the spare room for cash? What date in the month should the rent be paid? A written lease spells everything out so there is no doubt on either side. And if your tenant requests a written lease, you must comply.

We can draw up a lease for you or you can download a standard lease agreement here.

 

What information should be included on a written lease?

 

  • Your name and your tenant’s name
  • Your postal address
  • Your tenant’s postal address
  • The address of the property being leased
  • The agreed rent, the amount of increase and when it may increase (e.g. by 10% at annual renewal) and the frequency of payment (monthly, quarterly, etc.)
  • The amount of any deposit
  • What each party is responsible for, e.g. utilities, maintenance, etc. (usually, tenants pays for charges related to things they use, such as water and electricity, and landlords pays for charges related to the property, such as rates)
  • The notice period for quitting the property (applicable to both parties) and the conditions under which you can end the agreement early (for example, if specific maintenance is not done, or if the tenant is in arrears with the rent)
  • If there are ‘house rules’, such as no loud parties, they should be signed by both parties and attached to the lease
  • A list of defects drawn up during a joint inspection when the tenant moves in. This should be signed by both parties and attached to the lease

 

How does a background check work?

 

You should always ask prospective tenants for references. While it is normal to obtain a reference from the current tenant, it can also be helpful to speak to previous landlords, in case the current landlord gives a good reference simply to get rid of an undesirable tenant. You should also request a letter from the tenant’s employer to verify his employment status and income. You can also do an ITC credit check (call TransUnion ITC on 0861 482 482 or visit www.transunionitc.co.za) or we can carry that out for you.

 

What about a deposit?

 

A deposit is your insurance against your tenant defaulting on the rent or damaging your property beyond normal wear and tear. A deposit must be put in an interest-bearing account for the duration of the tenancy and given back to your tenant, plus the interest it has earned, when the tenant moves out. But the deposit can legally be retained and used to pay for repairs or to cover the money owed to you in the event of non-payment of rent.

 

What if the tenant is behind with the rent?

 

Technically, your tenant is in breach of contract. Your lease should have a breach clause in it; this is the time to enforce it. If you don’t have a cancellation agreement or breach clause in the lease, or if you want to give your tenant a reasonable chance to put things right, it is good practice to write a letter giving your tenant seven days to pay, failing which you will cancel the lease. We can draft the letter and send it on your behalf. Many tenants will take a ‘lawyer’s letter’ more seriously than one from the landlord alone!

 

What is the eviction process?

 

A landlord may not evict a tenant. You may seek a court order to evict a tenant if your tenant is in breach of contract, for example if the rent has not been paid. However, we would urge you to encourage the tenant to rectify the breach. In fact the Consumer Protection Act allows for this. Legal action is the last resort and, however justified, is never pleasant, especially where someone’s home is involved, so it is always advisable to give the tenant the opportunity to put things right.

 

What if there is damage to the property?

 

There will always be normal wear and tear. More serious damage can be repaired out of the deposit, if you asked for one. These steps will ensure a fair process for both parties:

  • When your tenant moves in, inspect the property together and list, in writing, any existing defects – you should both sign this and attach it to the lease agreement
  • When your tenant moves out, inspect the property again together, preferably just before moving day. Compare the two lists
  • Either of you can do the repairs. If you decide to do them yourself, keep all receipts for repairs paid for out of the deposit. Your tenant is entitled to see them
  • If the repairs cost less than the deposit plus the interest earned, you must repay the balance to your tenant

 

Who can help?

 

The Rental Housing Tribunal can advise you of your rights and responsibilities as a landlord and can help in the event of a dispute with a tenant.

Or contact us. At Simon Dippenaar & Associates we are specialists in property law. We act for both landlords and tenants and therefore know the challenges faced by both parties; and we have an intimate knowledge of the legislation from both sides.

 

Call us now on 087 550 2740 or email sdippenaar@sdlaw.co.za if you need help drawing up a lease or handling a difficult situation with an existing tenant.

THE CONSUMER PROTECTION ACT AND RENTAL AGREEMENTS

By | Evictions, Lease Agreement, Rent

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Landlords and tenants – suppliers and consumers

 

Tenants and landlords … why does the relationship turn acrimonious? Usually it’s because each party thinks the other is abusing the tenancy agreement. “My landlord never gets round to doing repairs.” “My tenant never pays the rent on time.” And so on. Both tenant and landlord have rights protected by law; and they both have a duty to act responsibly in upholding the lease. These rights and responsibilities are set out in the Rental Housing Act (1999). But did you know that the Consumer Protection Act (CPA) also applies to lease agreements? The landlord is considered the supplier and the tenant is deemed to be the consumer.

 

Implications for landlords

 

So what does this mean for landlords? Section 14(2)(b) of the Act says that ‘despite any provision of the consumer agreement to the contrary – the supplier may cancel the agreement 20 business days after giving written notice to the consumer of a material failure by the consumer to comply with the agreement, unless the consumer has rectified the failure within that time.’ In effect, regardless of the terms of the lease surrounding the notice period, if a tenant is in breach of the rental agreement, the landlord has the right to cancel the contract. In other words, if the rent is not paid, or if other terms of the lease are contravened … for example the property is sublet without permission … the landlord can give the tenant 20 business days’ notice to quit.

 

Tenants are protected by the Act … up to a point

 

So far so good, but like all legislation it’s not quite that simple. Consumers, in this case tenants, also have the right to fair treatment under the law and this means that they are granted an opportunity to rectify the breach within the 20 business days they have been given. So as long as the tenant pays the outstanding rent or ceases to sublet the property (or whatever the infringement was) within the 20 days, the law considers the breach to have been rectified and the tenant’s right to occupy the property legally restored.

 

Persistent breaches

 

Both of these provisions are pretty straightforward. So let’s consider a situation that is not quite so clear. What happens if a tenant is regularly and consistently in breach of the lease agreement but repeatedly rectifies the breach on, say, the 19th day of the 20-day period? Perhaps the rent is always paid just in time to avoid eviction, or the lease is infringed in myriad different ways each month but always put right at the last minute? What are the landlord’s rights in these circumstances?

 

On this point the CPA is not specific, and has not yet been tested in case law. But at Simon Dippenaar & Associates we believe that a cycle of persistent and repeat violations which are then rectified does not constitute rectification at all. It is provocative behaviour, either deliberate or otherwise, and evidence of an unwillingness to comply in a reasonable manner with the lease agreement. In this situation landlords may be within their rights to give refractory tenants their marching orders.

 

Unsure where you stand? Help is at hand

 

Every situation is different and it is impossible to give a hard and fast rule of thumb for cases like these. Housing legislation is complex. If you are unsure of how the Consumer Protection Act applies to you, either as tenant or landlord, contact Simon at sdippenaar@sdlaw.co.za to discuss your specific circumstances.

4 tips to help ensure your rent increase is fair

By | Rent

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In South Africa, there are no regulations prescribing how much your landlord can increase your rent by, unless there is an escalation clause in your lease. For many years, people just tended to accept that rent would go up by 10%-12% every year and either tried to budget for that or looked around for somewhere else to live. However, times are changing and people are feeling the pinch of the recession that hit a couple of years ago. Another consideration is that while you may not be able to afford the rent increase, moving can also be an expensive endeavour, even if you do manage to find somewhere cheaper to live.

More and more, tenants are trying to negotiate any rent increases with their landlord. When looking at hikes in prices for petrol, electricity and food, a blanket 10% increase in rent seems very high. One of the standard negotiation tactics is to ask your landlord for an inflation-related increase. This is quite fair in many respects, but doesn’t always look after all of the landlord’s interests.

If you wish to negotiate your rent increase with your landlord, it’s important to look at it from their side of things too. Most landlords are only trying to cover their costs.

Aspects to bear in mind when negotiating a rent increase

  1. First check your lease carefully – Most leases include an escalation clause. This will tell you what the expected annual increase will be, as well as terms for contract renewal. Remember, even if there is an escalation clause, it doesn’t mean that you can’t renegotiate the rent increase with your landlord.
  1. Look at rates, taxes and other costs to your landlord – If you want your landlord to be open to your negotiations, it’s a good idea to know what is happening with all of the extra expenses that they have to pay.
  1. Judge the popularity of the neighbourhood – If the area that you’re living in is very popular, then you may have to be careful with your negotiations. It’s best to avoid a situation where the landlord can easily replace you with someone who is willing to pay the higher rent.
  1. Remind your landlord how long you’ve been living there – In many cases, longstanding tenants who have proven to be reliable, have a good bargaining chip when it comes to negotiations.

If you’re having trouble negotiating a fair rental increase with your landlord, it might be time to get a professional in to help with mediation. Contact Simon today for legal representation in your property dispute.