Establishing the foundation for any leasing arrangement, a lease agreement is an important legal instrument that regulates the relationship between a landlord and tenant, delineating the parties’ rights and obligations and specifying the terms and conditions of tenancy. While the length and format of a lease agreement is not prescribed, certain key information must be included to secure both parties’ interests, ensure contractual certainty, and reduce the potential for future disputes.
In view of these objectives, it is recommended that prospective landlords incorporate the following twelve essential clauses into their lease agreements:
The parties’ identities
Central to the validity of the agreement, the lease must expressly identify the landlord and every adult tenant who resides on the premises, and include the parties’ contact details.
Description of the rental premises
Naturally, the lease must clearly and accurately describe the rental property. As such, the description should include the physical address of the property, along with the name of the building and unit number, if applicable, and its extent. To avoid any misunderstandings, the description should mention whether the rental includes a designated parking bay and storage space. If so, these must be clearly numbered.
Period of lease
The lease must specify the dates on which the agreement commences and terminates. Generally, leases operate for a fixed term of 6 months to 2 years. Relatedly, the clause should make provision for the renewal and early termination of the lease, incorporating reasonable notice periods.
If the lease expires and the landlord tacitly agrees to allow the tenant to continue occupying the property, a month-to-month lease will operate automatically, beginning on the first day of the month and ending on the last day of the month. According to section 5(5) of the Rental Housing Act, either party may terminate the lease by providing one month’s calendar notice in writing.
Rental amount and payment conditions
The lease must outline the rental amount payable by the tenant(s) on a monthly basis, or as agreed, the date by which payment must be made, and acceptable payment methods, such as EFT or cash. Notably, the lease should specify penalties for late payment and indicate the percentage by which the agreed rental amount will increase on an annual basis.
Security deposit
Intended to protect both parties, the lease must stipulate the deposit amount, which generally equates to one or two months’ rental, and outline the conditions the tenant must satisfy to be reimbursed. Ideally, the clause should also specify allowable deductions for damages that exceed ‘fair wear and tear’.
Utilities
To avoid any misunderstandings, the lease must clearly state whether the tenant is liable for additional payments, such as pre-paid electricity, water, waste disposal, or garden service fees, along with the dates on which these fees are payable and acceptable methods of payment.
Maintenance and liability for repairs
Crucially, the lease must delineate which party is responsible for maintaining the property and effecting various repairs, including emergency repairs, such as a burst geyser. Typically, the landlord is liable for conducting major repairs and maintaining the external property while the tenant is responsible for minor repairs, repairing damage caused by their negligent conduct, and maintaining the inside of the property, as well as the garden, and pool or Jacuzzi.
Relatedly, the agreement should clarify whether a tenant is permitted to conduct renovations, and, if so, whether the landlord will be liable for reimbursing the tenant for the value of the improvements.
Maximum occupancy
It is imperative to clearly specify the maximum number of tenants permitted to occupy the rental property. This is particularly important if the property in question is located within a sectional title scheme or an estate that imposes restrictions on occupancy.
Limitations on sub-letting
Relatedly, the lease should restrict tenants from inviting friends and family to occupy the premises or converting the garage or a backyard wendy house into additional accommodation for sub-letting purposes. Alternatively, the landlord may permit sub-letting, subject to a strict approval process.
Accommodating non-human animals
In contemporary South Africa, humans increasingly keep dogs, cats, and other animals for companionship. As such, the lease should clearly establish a ‘pet policy’ which either prohibits or permits the keeping of non-human animals. Leases which permit pets must specify any restrictions, namely species, size, and number.
Notably, the keeping of animals in sectional titles schemes and estates governed by homeowners’ associations is usually regulated. Accordingly, the contents of the lease, including the approval process, must align with prevailing rules.
Landlord’s right to access the property
Balancing the interest that the landlord has in accessing the rental property with the tenant’s constitutional right to privacy, the lease should allow the landlord reasonable access to the premises to conduct inspections and repairs at an agreed time and after the provision of reasonable notice.
Breach of contract
To secure both parties’ interests and ensure contractual certainty, the lease must incorporate a breach clause. Specifically, it should outline that the violation of a material clause will entitle the aggrieved party to cancel the agreement if the breach is not remedied within an agreed number of days of receipt of written notice.
Under section 4(5)(c) of the Rental Housing Act, a landlord is entitled to terminate a lease if a tenant breaches the agreement ‘on grounds that do not constitute an unfair practice and are specified in the lease’. Typically, these grounds include failure to pay rental, persistent non-compliance with body corporate rules, malicious damage to the premises, or engaging in illegal conduct on the property.
A well-drafted lease agreement is essential to establish the parties’ rights and responsibilities, safeguard their interests, and reduce the potential for disputes. Correspondingly, it is advisable to consult an experienced attorney to ensure contractual certainty and compliance with the prevailing legal framework. Additionally, an attorney can carefully tailor the agreement to accommodate the parties’ unique needs and circumstances, if needed.
For expert legal assistance, contact info@stbb.co.za to consult with a property specialist today.
