Leasing a Property - what you need to know

When it comes to leasing a property we often just dive in and lease the best property (or sometimes the first property) we find. Here are some interesting questions and answers that are worth a read before leasing a property.

What should the condition of a lease property be when let?

According to our common law, the property to let must be in a condition fit for the purpose for which it is let when handed over to the tenant and the landlord must maintain the premises in that condition. In order to repair the defects, the landlord must know of the defects or ought to have knowledge of it by reason of trade or profession.

At the end of the lease the tenant must hand over the property in the same condition it was received or restore the property to that condition. The Rental Housing Act requires that the tenant hand over the property “in a good state of repair, save for fair wear and tear”.

What does “fit for the purpose it is let” mean? I.e. what does “habitable” mean?

Habitability is the common-law obligation, which is often ignored by landlords and letting agents.

For a dwelling to be habitable it must have adequate space, protection from the elements and threats to health, physical safety and it must be a structurally sound building.

Must a written lease be signed?

The Rental Housing Act does not require parties to sign a written agreement. In such a case the requirements of contracts would apply, whereby “a written contract comes into existence when it is signed by all parties” or a contract is deemed to be signed when one party intentionally or deliberately avoids signing it.

Can a term or condition of a lease be changed?

A lease cannot be changed while it is in use, unless the landlord and tenant agree to any change.

Can an owner or landlord install a separate water meter after a tenant has taken occupation?

This will depend on the terms and conditions of the lease agreement.

Installation may be possible if:

• The parties agreed that the rental excludes charges for water consumption;

• The tenant, upon receiving a bill, is required to pay the full amount due;

• The tenant was aware and agreed that the landlord would install a separate water meter.

Should the agreement about rental be inclusive of water charges, the tenant may object to the installation if this means a change to the lease agreement.

The tenant can object if:

• The tenant would have to pay charges for water consumption, over and above the rental that included water charges as per the agreement at the commencement of the lease; and

• The tenant paid a proportionate share and the installation of a separate water meter would seriously alter the amount.

Remedies

The tenant’s remedy is to place the landlord on terms to rectify the breach for altering the terms of the lease agreement.

The landlord cannot change the rental agreement that includes the cost for water consumption by installing a separate meter. The fact that the landlord cannot make a unilateral change may be financially burdensome when the tenant’s water consumption is very high due to additional occupants or misuse or negligence. Rental in this instance may not even cover the costs of the water consumption.

The landlord’s remedy is to place the tenant on terms to rectify the breach (of exceeding the number of occupants) provided there was an agreement about the number of occupants.

Ideally, to safeguard the interests of both parties, a rental agreement that excludes payment for water consumption, should make provision for a separate water meter to be installed for the tenant. The tenant’s consumption is then metered separately and accurately.

Is the tenant obliged to pay the landlord’s rates?

In terms of common law, the landlord as the owner is responsible for the payment of rates to the municipality.

If agreed by the parties, a tenant is obliged to pay rates, taxes and other expenses incurred by the landlord in relation to the leased property, provided the expenditure is determinable and not left to the imagination of the landlord or tenant.

Certain leases contain a clause that in the event rates and other municipal service charges increase during the year, the tenant will pay a portion, say one twelfth. The tenant is therefore bound by this clause and is under contractual duty to pay his/her share.

What does “under duress” mean?

A landlord cannot threaten a tenant nor can the tenant intimidate the landlord to sign a lease contract. Parties cannot be forced to enter into a contract, as this would amount to duress. They must be free when contracting.

Where a tenant and landlord conclude a lease, having met all the requirements of a contract, to allege duress would not make sense. In such a case, the onus to prove duress falls on the tenant.

In Arend and another v Astra Furnishers (Pty) Ltd [1974] 1 All SA 522 (C) it was held that duress may be due to inflicting physical violence on the contracting party or inducing fear by means of threats. If the duress is due to fear, certain elements have to be present, namely:

• The fear must be reasonable;

• The fear must be caused by the threat of some considerable evil to the person concerned or to his family;

• The fear must be the threat of an imminent or inevitable evil;

• The threat must be unlawful or contra bonos mores; and

• The moral pressure used must have caused damage.

This is good information to keep in mind when leasing a property, especially regarding the condition of the property. If you want to know more about leasing a property, have a look at my post all about lease agreements.