Property Leases – Always Better in Writing

At present a verbal rental agreement is still legally binding – in fact it’s pretty much the only property contract that can be concluded like this today. Currently the Rental Housing Act 50 of 1999, section 5 stipulates that: a lease between a tenant and a landlord, subject to subsection (2), need not be in writing or be subject to the provisions of the Formalities in Respect of Leases of Land Act, 1969 (Act No 18 of 1969). However, a landlord must, if requested by a tenant, reduce the lease to writing.

A move in the right direction

All of this is set to change should the Rental Housing Amendment Bill be passed. The bill is currently before Parliament as a priority bill and, according to Dr Sayed Iqbal Mohamed, the Chairman, Organisation of Civic Rights -Tenant Issues, will need to be passed into law before the general elections in May (when Parliament’s five year term ends).

The amendment proposes several critical changes to the current Act the main of which is that the onus will be on the landlord to ensure that a lease is in writing – oral leases will no longer be valid. This of course means that all landlords and tenants would do well to ensure that any verbal agreement they have is set down in writing as soon as possible.

“It’s always better to have a contract in writing as proving what was stipulated in a verbal contract is incredibly difficult”, says Francesca Beebe, Property Sales Consultant at Leapfrog Southern Suburbs.

Other proposals include for MECs to establish Rental Housing Tribunals as well as extending the powers of said tribunals. All local municipalities will be required to have Rental Housing Information Offices and the revisions also ask for an appeal process to be provided.

“While rental contracts are not necessarily complicated, landlords and tenants often haven’t taken the time to familiarise themselves with their proper application. As such I believe that these information offices could become useful resources for people”, says Beebe.

Getting it in writing

Landlords looking to formalise rental agreements can find a number of examples from rental agents or online. The Rhodes University Legal Aid Clinic stipulates what the essentials that should be included in any lease:

1. The names and addresses of both the tenant and landlord.
2. A description of the property to be leased.
3. The amount of rent payable, and the amount by which it may increase during the lease period.
4. How often rent is to be paid (e.g. monthly).
5. The amount of the deposit, if one is required.
6. The lease period (i.e. how long the lease will run for). If there is no fixed period, then the notice period required in order to end the lease.
7. Duties of both tenant and landlord.

When in doubt, let the experts handle it

“I’ve found that landlords often don’t have the time required to manage rental properties, nor do they have access to credit bureaus or the support network of contractors and attorneys”, reveals Beebe, “because of this I find that it’s often in both the landlord and tenant’s best interest to work with a qualified rental agent”. Beebe goes on to mention that an agent will be able to supply not only a proper rental contract, but will also be able to explain any questions and advise as to any amendments.