Lease agreement
A lease can be in verbal or written form. Obviously, a written lease agreement is recommended as this clearly sets out the rights and obligations of both the tenant and the landlord. However, there are many variations of standard clauses and the tenant should ensure he reads the lease carefully and understands his responsibilities. Whether the lease is verbal or written, both tenant and landlord must agree on what the rent and additional charges will be, when payment needs to be made, where the payment needs to be made and what property is being rented.
Deposit
Usually, a landlord will request that the tenant pays a deposit upfront in case there are damages. The deposit might be equal to one or two months’ rent depending on criteria such as the tenant’s credit profile and the condition or value of the property. If the landlord is holding the deposit, it must be refunded with interest. The landlord cannot use the deposit to upgrade the property when the tenant vacates. The deposit is held in trust in case there are damages – the tenant may not request thT the landlord use the deposit as rent at any time during the lease.
Deposit refund
The tenant and landlord must perform a joint incoming and outgoing inspection. The incoming inspection is to record the condition of the property when the tenant took occupation and the outgoing inspection is to determine if any damage was caused by the tenant. The deposit may be applied to any amounts that the tenant owes in terms of the lease: outstanding rent, utilities, lost keys, damage, and so on. After the outgoing inspection has been performed and it is determined there are no damages the deposit must be refunded to the tenant within seven days. However, the deposit may be applied to any amount the tenant owes – including utilities. As the landlord will most likely only receive the final electricity and/or water account a month in arrears, he will only be able to reconcile the tenant’s deposit account then. Should the outgoing inspection determine that the tenant did cause damage, the deposit must be refunded within 14 days of restoration of the property. Should the tenant not attend the outgoing inspection, the landlord must refund the deposit with 21 days of termination of the lease.
The tenant must:
Attend both the incoming and outgoing inspections.
Take care of the property during his tenure and return the property in the same good order as it was given to him.
Continue to pay his rent and additional costs and not offset the deposit against his rent.
Rent
The rent is usually made up of a fixed basic rent as well as additional costs such as electricity, gas, water, parking, DSTV, and so forth.
The tenant has a right to receive a receipt for all monies paid to the landlord.
The tenant has a right to a rental invoice which breaks down the different costs: basic rent, electricity, water etcetera.
The landlord may not increase the rent during the fixed-term period.
The tenant has an obligation to pay the full amount of rent and all additional charges on the due date and to the landlord’s specified account.
Utilities
Utilities are the additional charges which the tenant must pay. These amounts are paid over and above the rent, and both the tenant and landlord must agree upfront on which additional charge the tenant will pay: electricity, water, sewerage, refuse removal or parking. The tenant has a right to inspect the landlord’s municipal account to ascertain the charges that are being passed on to him.
Over the past few years Eskom has increased electricity charges significantly and this has resulted in the cost of electricity sky-rocketing. The tenant is expected to use electricity responsibly and must understand his obligation to pay for his usage. The landlord is entitled to pass on the increase in his levies or rates and taxes as monthly charges, only if the lease specifically makes provision for this.
Early cancellation of a lease agreement
Usually, a lease agreement is for a fixed period, for example, 12 months. However, the tenant does have the right to cancel the lease prior to the end of the fixed period. The tenant has the right to cancel a lease early by giving the landlord 20 business days’ notice. The tenant must remember he will be liable for a reasonable cancellation penalty.
The tenant remains responsible for the full payment of rent and utilities on the date that they fall due. The tenant may not request that the landlord use the deposit for rent during the cancellation period.
Maintenance
It is the landlord’s responsibility to place and maintain the property fit for the purpose for which it was let. The tenant is responsible for maintaining the property in the good condition it was given to him – fair wear and tear accepted.
Disputes
Should the tenant have a dispute with his landlord there are remedies available to the tenant. It is advisable to have a written lease but the tenant still has rights if the lease is verbal. A tenant has the right to lodge a claim at the Rental Housing Tribunal but is obliged to keep the payment of his rent up to date.
Credit profile
Credit bureaus collect and maintain information regarding how a person pays all their credit accounts, for example, their loan accounts, store cards, cell phones and rent.
A tenant has the right to:
Any accurate information being held on their credit profiles with the credit bureaus.
Request one free credit report on themselves per year.
Dispute inaccurate information which a credit bureau may hold.
The tenant has a responsibility to make full and timeous payments to the landlord to ensure and build a positive credit profile. This will assist him when it becomes time to move rental properties or open new credit accounts.
Useful contact numbers
Housing Rental Tribunal: 011 630 5035
TPN Credit Bureau: 0861 876 000
