Renting a property? Note these three points in the agreement

The flexibility of renting a property is one of the many reasons those that do so choose it over buying. 

"Renting is ideal for those who don't want the long-term commitment of purchasing a property, both in terms of the financial outlay as well as being tethered to one place. Similarly, tenants aren't typically responsible for the maintenance and upkeep for the property so there's less responsibility in that sense too," says Steven van Rooyen, Principal at Leapfrog Milnerton. 

But when it comes to responsibility, Van der Linde is clear that both parties - tenant and landlord - need to be clear on the terms and conditions laid out in the written rental agreement. "Make sure there is a proper, written, watertight and signed agreement in place. A verbal agreement, or a conversation on WhatsApp, does not suffice," he warns. 

The rental agreement is designed to protect the interests of both parties in equal measure so it needs to be unambiguous, relevant, and every stipulation in the agreement must be understood by all. 

Van Rooyen says the three most important stipulations are the rental amount, the lease period and annual increase. 

The rental amount 

When it comes to money there should be no ambiguity. The rental agreement must clearly stipulate the monthly rental amount, as well as what that includes and excludes. "Some rental agreements may include the cost of electricity, for example, while other landlords levy that as an additional charge," Van Rooyen explains. 

In fact, tenants should not assume that the cost of electricity, water, property levies or even maintenance is included in the rental amount. "What tenants should assume is that the onus is on them to ensure they fully understand what they will be required to possibly pay extra for.

Tenants may be charged for once-off and/or miscellaneous expenses like the cost of drawing up the rental agreement, having keys cut or remotes programmed. 

It's a good idea for tenants to ask the landlord to list all the costs in writing for greater transparency, together with when each is payable and whether it's likely to recur annually. 

Lease period

Rental contracts are typically fixed for either six or 12 months, though the parties could come to an agreement that allows for month-to-month rentals. 

Van Rooyen's advice is to make sure you know exactly how long the lease runs for, and don't assume it will be automatically renewed or that the landlord knows you want to stay on, if that is the case. Similarly, tenants should ensure they understand the process for terminating the contract early, while the landlord must be clear on any penalties that would be incurred for doing so. 

The terms of the rental agreement should stipulate all this so that there are no surprises around 'early exit fees' or uncertainty about whether the security deposit is paid back or not. 

It is useful to note that the Consumer Protection Act makes provision for the tenant to terminate the agreement upon giving 20 business days' notice, though the agent may then claim for any losses suffered. 

Annual increases 

Nobody likes to be caught off-guard with a price increase, particularly with something as substantial as rent. Van Rooyen says that while tenants should be prepared for inflation-related increases every year, the landlord should still stipulate this in the rental agreement and may even consider stating the increase band (for example, 5 to 8% annual increase). 

Tenants are within their rights to ask the landlord if a maximum annual rent increase too, and the landlord should communicate the increase in good time. The landlord wants to retain the business of the tenants, particularly those that pay on time and care for the property, and so many will be open to negotiating rental increases in favour of the tenant.

"As in any business relationship - which the rental process is - both parties need to feel cared for. In the case of the rental agreement, and the partnership between tenant and landlord, that hinges on transparency and clear communication, backed by an unambiguous rental agreement," Van Rooyen concludes.