We have written previously on what tenants need to know to protect their rights, but it is similarly crucial to consider lease agreements and the consequences that flow from them, from the perspective of the landlord.
Our firm has vast experience with multitudinous evictions from the positions of both the landlord and the tenant and we can attest to the fact that evictions are costly, time consuming and altogether unpleasant experiences for all involved.
It suffices to say that evictions are best avoided. However, while tenants are provided strong protections under the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (“PIE”), the position of landlords can be more difficult. Landlords must comply with provisions of PIE, which besides being a time-consuming process, can result in significant legal costs being incurred. Large Real Estate Investment firms can generally predict for and absorb these costs, but this kind of proceeding can be devastating financially to private landlords who are not affluent and yet losing out on rental income all the while incurring legal costs and continuing to be liable for municipal bills and/or mortgage bond costs.
Therefore, choosing the right tenant is of utmost importance, as is having a thorough lease agreement which regulates various possible changes in circumstances.
Choosing a suitable tenant
From the outset, it is crucial to ensure that the tenant a landlord has accepted to rent a property has the means to pay the agreed rental amount. This can be checked through a variety of means, including performing credit checks, requesting references provided by previous landlords, requesting payslips or bank statements. If possible, it is best to request certified copies of these documents to be handed to the landlord directly, to avoid manipulation of online copies.
Beware, though, that, in terms of the provisions of the Protection of Personal Information Act 4 of 2013, written authority should be provided by tenants to perform credit and other background checks.
These references and other documents should be scrutinised thoroughly, the lease agreement should be signed and the required deposit must be paid before the tenant moves in. Once the tenant has possession of the property, removing such a tenant will require either their agreement or a formal eviction application. Therefore, it is always prudent to take enough time to properly consider who will be taking possession of a property. A delay of a few days is better than a lengthy eviction case of a few months.
Should a landlord not wish to deal with the risks associated with vetting a tenant, they can employ a real estate agency to do the vetting for them and to manage the rental property, which can be helpful because the real estate deal with such issues on a daily basis.
The lease agreement
I have personally drafted eviction applications in which certain clauses of the lease agreement have later come into dispute. A comprehensive lease agreement should have the effect of protecting both parties’ rights, while leaving little room for the manipulations of unscrupulous people.
In my experience, after the death of an initial tenant in a lease agreement, it is a common occurrence that children, relatives or friends will move in and state that they are continuing on with the lease, despite the lease agreement containing a clause terminating the agreement at the death of the death of the initial tenant. Surprisingly, the legal position is that, unless the lease agreement provides otherwise, a lease agreement continues on the death of either the tenant of landlord, to be managed in terms of the trustee of the deceased estate.
Such a clause is therefore an important one to add into a lease agreement. A subsequent lease agreement can always be entered into, should a landlord wish to continue a rental relationship with the remaining relatives once the initial tenant passes on.
Another clause I have seen become of particular importance is a prohibition of subletting. A standard clause that should never be omitted from a lease agreement is clause that states that no subletting to other persons will be allowed except with prior written approval of the landlord. If this is not stipulated, there may be legally valid use and enjoyment of a landlord’s property by persons completely unknown to the landlord and profiteering of the property by the tenant. This is never an ideal situation, as the landlord has no direct contractual relationship with the sublettees and has no contractual remedy from them if rental amounts aren’t paid or if the property is damaged.
There are, of course, many other details that should form part of a lease agreement, such as details of by when rental amounts are due, who is responsible for municipal bills, deposit amounts to be paid, maintenance and so on. The more specifically issues are clearly defined from the beginning, the less likely a dispute regarding the rental property will be to arise.
It is salient to stipulate that alterations should not be made to the property without prior written approval of the landlord. If this is not governed in the lease agreement, the landlord may bear some duty to compensate for improvements of the rental property in some cases.
Other protections
Besides a landlord’s interest in avoiding lost income, drawn-out disputes and eviction proceedings, a landlord has vested interest in ensuring the condition of the property is preserved. The most effective manner to ensure this is to normalise inspections by the landlord.
The lease should commence with an ingoing inspection, where an inventory of any movables on the rental property should be completed and both the tenant and landlord should sign as to the condition of the property at the time of occupation of the rental property. This should be compared to the condition as at the time of the outgoing inspection, to ascertain if there are any damages the cost of which must be subtracted from any deposits to be returned.
But, besides these, periodic inspections should occur to ensure that the property is not damaged to a point where a deposit retained will not cover such damages. Monitoring of rental property is an important manner to protect rental property and ensure that inspections are expected. I have dealt with evictions previously where the landlord was barred entry to the property once a dispute arose because the tenant denied that the landlord was allowed entry to the property at all. It’s better to make inspections routine before a dispute arises and to actively prevent such issues.
Conclusion
As can be seen by the above, landlords are not without protection. With a carefully selected tenant and a robust lease agreement, a landlord has some immunity from the pitfalls that rental of property presents. Should you require assistance with securing and managing tenants, contact Adriaans Property Group at [email protected]. Should you require assistance with vetting your lease agreement, or with any property-related disputes that may have arisen, contact [email protected].
While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of the articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes and should not be construed as legal advice.
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