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Rental Housing Act

No lease? No problem. Tenants still have rights

By | Eviction orders, Evictions, Lease Agreement, Rental Housing Act

Rental housing legislation provides tenants with protection, whether or not there is a written lease

Landlords must follow the legal procedure for eviction. Know your rights as a tenant.

It’s not best practice, but it often happens that a landlord and tenant do not have a written lease agreement. In the digital age, when everything is captured online and on cell phones, it is understandable to assume this means there is no lease. However, the Rental Housing Act does not require a lease to be in writing, although it is strongly advised. A verbal agreement between the parties constitutes a lease agreement, even if that conversation consists of no more than a statement of the monthly rent and the amount of time the property may be occupied.

So when we talk about “no lease”, what we really mean is no written lease. And, although the tenant still has rights under the law, the absence of clarity surrounding the terms and conditions of the tenancy can lead to disputes and confusion. But it does not mean the eviction process is any less stringent.

One reason why a tenant might not have a lease

There are two scenarios in which the tenant might not have a written rental agreement, and the eviction process is slightly different in each case. The first is where the landlord and tenant have agreed the terms of the occupancy informally, and perhaps shaken hands on the deal. They may be friends or family members with a harmonious enough relationship to consider a legal document unnecessary, or the property may be a cottage in the garden of a homeowner who takes an informal approach to letting it out. This won’t be permitted for much longer, as we will come on to, but at present it is not uncommon.

Another reason for no lease

The second scenario is where a lease has expired, but the tenant has the landlord’s permission to remain in the property on a month-to-month basis. In some countries this is called a “tenant-at-will”. This might occur because a tenant has purchased a property and is waiting on an entry date; or the property owner is planning to sell and does not want to commit to a lengthy lease period but is happy for the tenant to occupy the property while seeking alternative accommodation. Or there may be minor breaches to the lease that are not serious enough to cause the landlord to evict but nonetheless they do not wish to renew the lease. The tenant may be allowed a few extra months on a month-to-month basis to avoid homelessness while seeking alternative accommodation.

Implied leases

If a lease expires and the tenant continues to pay rent, and the landlord continues to accept it, without spelling out the conditions noted above, they have effectively created a new, implied lease. There are also certain fixed-term leases that become implied month-to-month leases after expiry, in terms of the Consumer Protection Act (CPA). By law, the payment and acceptance of rent after the official end of the lease implies that a new lease has been agreed.

Eviction with a verbal lease

The eviction process where there is a verbal lease is identical to the process for a written lease. The Prevention of Illegal Eviction Act from and Unlawful Occupation of Land Act, No 19 of 1998 (PIE Act) ensures that landlords follow a clearly defined set of actions, and there must be due cause. No one can be evicted without reason or notice. There must be a breach of the lease agreement. In the absence of a written document setting out the conditions of the tenancy, the most common breach is non-payment of rent. This is the one contractual obligation a tenant has that cannot be disputed. Some landlords may be willing to forgive a late payment or two, but this is a matter for personal discretion. Legally, if the rent is not paid on the date it is due, a breach has occurred. In the first instance, the tenant is given the opportunity to rectify the breach. The landlord serves notice to the tenant to this effect, and then if the breach is not rectified, the landlord can terminate the lease contract.

The landlord must give notice of the intention to evict the tenant through the courts. The eviction order will give a date for a court hearing, at which the tenant may offer a defence. If there is a valid defence, a trial date will be set. In the absence of such a defence, the court issues a warrant of eviction to the Sheriff. Note that only a Sheriff is authorised to remove a tenant or a tenant’s possessions from a property.

Month-to-month or open-ended leases

The landlord must give the tenant “reasonable” notice of termination of the lease. A calendar month’s notice will satisfy the 20 business days required by the CPA and is considered reasonable. There does not have to be any breach of an agreement. If the tenant fails to vacate the property at the end of the calendar month, as requested, then the landlord can begin the eviction process described above.

Time’s running out

Soon this advice will be irrelevant. The Rental Housing Amendment Act 35 of 2014 will require  landlords to provide tenants with a written lease agreement. Verbal agreements will no longer be binding. The Rental Housing Amendment Act will apply immediately to new lease agreements and landlords will have six months to bring existing agreements in line with the new legislation. At the time of writing, the Act has not yet been gazetted and a commencement date has not been announced. We will keep readers of this blog informed.

Seek the guidance of an expert eviction lawyer

If you are a tenant without a written lease and would like to discuss your circumstances, or if you are a landlord needing to draw up a formal lease agreement, contact Simon on 086 099 5146 or email sdippenaar@sdlaw.co.za to discuss your case in confidence. Eviction lawyers Johannesburg and Cape Town are experts in rental property and eviction law, and we uphold the rights of both parties without bias.


Rental Housing Amendment Act 2014 by Eviction Lawyer

Getting To Grips With The Rental Housing Amendment Act

By | Rental Housing Act

We recently wrote about the Rental Housing Amendment Act 35 of 2014, still to be gazetted. It seems the article has focused the minds of our clients and we’ve had requests for more information on what the Amendment Act means for both landlords and tenants. So we will set out here what we see as the most important points.

Obligations of the landlord

Arguably the most significant change in legislation is the onus on the landlord to provide a written lease agreement, and the criminalisation of the failure to do so. This strikes us as a heavy-handed means to a reasonable end; and an alternative approach might be the provision of a default lease agreement enforceable in law in the absence of a written lease. This would encourage landlords to draw up written agreements if they want to be sure of including their own clauses, but not tie up court time enforcing an unnecessary criminal law should they be negligent in drafting the lease. But meanwhile, if you are a landlord, it is your responsibility to provide your tenant with a lease in writing.

The lease must contain, at a minimum, the street address of the premises, the rights and obligations of the landlord and tenant (which must comply with the Act), the deposit amount, the rental amount, any other charges, the frequency of payment and the process to follow if escalation of complaints is necessary.

Landlords are also obliged to ensure the tenant’s deposit is lodged in an interest-bearing account and to repay the deposit plus interest within seven days of the expiry of the lease. During the course of the tenancy the tenant is entitled to request written proof of interest earned on the deposit.

At the start of the lease, landlords must undertake to inspect the property with the tenant to identify any damages or defects. The tenant may insist that sub-standard conditions are rectified before moving in, and the landlord must comply. If the landlord fails to inspect the property with the tenant, then it is assumed that the property is in good condition. Allowance for post-rental inspection is also included in this section of the Act.

Rights of the tenant

In addition to the rights of the tenant implied in the landlord’s obligations above, there are several other tenant’s rights enshrined in the Amendment Act, not forgetting that the tenant also has obligations.

The privacy of tenants is thoroughly protected in the legislation. While landlords reserve the right to inspect the property from time to time, sufficient advance notice must be given. Unannounced, ‘spot’ inspections are not permitted, nor is a search of the premises, unless there is considerable reason to suspect misconduct and a court order has been obtained.

Tenants are entitled to written receipts for all payments made to the landlord, and to receipts for any repairs carried out to the property that may be deducted from the deposit before it is returned at the end of the lease.

Tenants must obtain the landlord’s consent before sub-letting any part of the property, but landlords are expected to grant permission, provided the request is reasonable.

Fit for human habitation

The Rental Housing Amendment Act 35 of 2014 was developed to remedy some of the shortcomings of the original Rental Housing Act 50 of 1999. The Amendment Act aims to improve the regulation of the landlord/tenant relationship and provide tenants with greater protection. It also attempts to strengthen the powers of the Rental Housing Tribunals and create a better appeals process; and most importantly it introduces standards for rental housing, as historically some landlords have exploited desperate tenants by offering woefully sub-standard dwellings for let.

The Amendment Act sets out quite clearly what the landlord’s duties are in terms of the condition of the property and the safety and security of the occupants. The term “habitability” is defined as referring to adequate space; protection from the elements and other threats to health; physical safety of the tenant, the tenant’s household and visitors; and a structurally sound building. Because property owners also have a right to the security and fair treatment of their dwellings, the amended Act offers landlords some protection against malicious damage caused by tenants, with the inclusion of reasonable rules and regulations in lease agreements.

We welcome this as an important step towards improving the quality of housing for some of the most vulnerable in our society and protecting landlords from disrespectful tenants.

Timing

A number of clients have asked about the implications of the Amendment Act for tenancy arrangements already in force. Legislation is not usually applied retrospectively. In the case of the Rental Housing Amendment Act 2014, when it is eventually gazetted, the terms of the Act will apply immediately for new lease agreements, and there will be a six-month transitional period to allow existing arrangements to be brought into line with the legislation.

Help is at hand

So don’t panic. But if you own multiple properties and have a large number of tenants, it might be advisable to begin the process of drafting leases in preparation for the new law to come into effect. Six months can pass very quickly, and not providing tenants with a written lease is a criminal offence, punishable by a fine or even up to two years in prison.

Contact us

Cape Town Eviction Attorneys Simon Dippenaar & Associates Inc. are eviction specialists. We act for both landlords and tenants and therefore know the challenges faced by both parties; and we know the legislation as it affects both sides. Call us now on +27 (0) 86 099 5146 or email sdippenaar@sdlaw.co.za if you need help complying with the Rental Housing Amendment Act 35 of 2014 when it comes onto the statute books. Don’t leave it until the law is in place.

Further reading

Rental Housing Act - Eviction Lawyers South Africa

Rental Housing Act Gets Teeth

By | Rental Housing Act

Rental Housing Act – Whether you are a landlord or a tenant, you will be aware of the legislative environment that protects you when it comes to letting out your property or occupying a property as a tenant. Both parties have rights, and the law seeks to ensure that neither finds their rights abused or ignored. The Rental Housing Act 50 of 1999 sought to regulate the relationship between landlord and tenant. However, because the Act has proven difficult to enforce and thus weak from a practical and statutory standpoint, the Rental Housing Act Amendment 35 of 2014 was enacted. It has yet to be gazetted.

The Amendment Act has strengthened the rights and obligations that apply to both landlords and tenants, tightened up the rules surrounding inspections, deposits, the condition of a property and what should be included in the lease; and it has enhanced the powers of the Rental Housing Tribunals. Let’s have a look at these key areas in turn.

Landlord-tenant relationship

South Africa is suffering from a severe shortage of quality housing. There are still far too many people living in sub-standard accommodation. The government is committed to promoting rental housing, and has a duty to ensure fair and equitable treatment of tenants, particularly the most vulnerable. However, it also recognises that property owners are entitled to security of their dwellings and have the right to protect their assets from abuse. The provisions of the Rental Housing Act seek to balance these two priorities.

  • Deposits: A landlord is entitled to a deposit before a tenant moves in, and this must be held in an interest bearing account . The Act does not stipulate the amount of the deposit, but in practice it is usually equivalent to one month’s rent. The landlord must give the tenant a written receipt for the deposit, and indeed for any other payments made. The tenant may ask the landlord to provide written proof of the interest earned on the deposit; and when the tenant moves out the deposit plus accrued interest must be repaid within seven days.
  • Inspection: In an effort to reduce conflict that arises over damages, the Act appears to have borrowed from the car hire industry! Both landlord and tenant must inspect the property together at the beginning of the lease and record any faults. They can decide together if the faults merit repair by the landlord, or if they can just be noted. For example, a leaking shower should be fixed to avoid danger and inconvenience to the tenant and water damage to the property. Scratches on paintwork may be merely registered so the tenant is not held responsible at the end of the lease. When the lease ends, the tenant must be available to conduct a final inspection with the landlord, to identify any damage that may have been caused during the tenancy. The landlord is entitled to deduct the cost of repairs from the deposit.
  • Condition of the property: This provision is undoubtedly an attempt to ensure that unscrupulous landlords do not attempt to pass off uninhabitable dwellings to desperate or vulnerable tenants as suitable for occupancy. The property must be ‘habitable’, which is defined as having adequate space and protection from the elements, being safe and secure and structurally sound. A landlord who fails to comply with this requirement can face a criminal charge.

Get it in writing

When we’ve written about good letting practice in the past, we’ve advised that a written lease is always a good idea, but it was not previously a requirement in law. The Rental Housing Amendment Act changes that. It is the landlord’s responsibility to provide a written lease contract, and, as with the habitability clause, failure to do so is a criminal offence. The Rental Housing Act stipulates what should appear on the written lease, and this formalises what we have always recommended:

  • The names and addresses of both landlord and tenant;
  • A description of the property (see Windeed Search Tool);
  • The agreed rent, how much and when it may increase (e.g. by 10% at annual renewal), and the frequency of payment (monthly, quarterly, etc.)
  • The deposit amount;
  • The notice period for quitting the property (applicable to both parties)
  • Information on the rights and obligations of the tenant and landlord, in other words what each party is responsible for, e.g. utilities, maintenance, etc. (usually, tenants pay for charges related to things they use, such as water and electricity, and landlords pays for charges related to the property, such as rates);
  • Information on the amount of any charges the tenant must pay over and above the rental cost;
  • A list of defects drawn up during the joint inspection (mentioned above) when the tenant moves in. This should be signed by both parties and attached to the lease.

Who can help?

The Rental Housing Amendment Act requires Rental Housing Tribunals to be established in all provinces, however, in the Western Cape we are fortunate to have a fully operational Rental Housing Tribunal. It 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 Inc. we are eviction specialists. We act for both landlords and tenants and therefore know the challenges faced by both parties; and we know the legislation as it affects both sides.

Call us now on +27 (0) 86 099 5146 or email sdippenaar@sdlaw.co.za if you need help ensuring you comply with the Rental HousingAmendment Act 35 of 2014 when it comes onto the statute books. Don’t leave it until the law is in place.

Let us review your tenancy agreements now and help you draw up written leases where none are in place.

Further reading: