UNDERSTANDING THE LEASE AGREEMENT



The lease agreement is a formal contract and we cannot emphasise enough the need for tenants to read the agreement properly before signature. Put questions to your agent and satisfy yourself before putting pen to paper.

The following information is based on the Property Network lease agreement which is comprehensive and fully up to date with latest legislation. Do note that these lease agreements vary from agency to agency.

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THE PARTIES NAMES

The lease will include a full description of the landlord and tenant. Estate agents are bound under the Financial Intelligence Centre Act to verify the identity of clients and you will therefore be asked to supply ID's, proof of address and marriage certificate etc.


Unless these FICA requirements are met the lease cannot proceed
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THE PROPERTY DESCRIPTION

This is pretty straight forward but with a sectional title property, make sure that you are getting the use of garages, parking slots etc as you were told when viewing

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FIXTURES AND FITTINGS

The home is let with all fixtures and fittings as well as any appliances etc. Very importantly, you must make sure that whatever fixtures were in place when you viewed are still there when you move in.

Normally, the lease will state that the tenant is responsible for the upkeep of fixtures and fittings as well as other appliances and furnishings that were part of the lease agreement. The basic principle is that whatever the client uses, he must maintain, repair and/or replace e,g. the stove etc.

Your agent will check everything is in order when doing the initial inspection with you and it is your responsibility to make sure the information is correct

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RENTAL AMOUNT AND INCREASES

Normally the rent increase will not even be applicable on a one year lease if for instance the rent is R6500 per month with an annual increase of 10%.

In the Property Network lease the wording states that the increase will be applicable if renewal of continuation takes place but with the proviso "or by such other amount agreed to by the landlord". This latter part is important because the increase is therefore not set in stone but is essentially re-negotiated on renewal of the lease.

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THE DEPOSIT
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If renting privately, the interest on the deposit automatically becomes due to the tenant. If through an agency, not so and you must make sure that this is specified in the lease agreement. Also, this deposit must be held in a seperate trust account.

You MAY NOT withold the last months rental beacuse of the deposit held.


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ADDITIONAL COSTS

The lease will specify any lease admin fees, inspection fees and the like that are payable by the tenant.

The balance of additional costs will normally relate to penalties and costs associated with default, arrears and legal action that may be taken. This is quite normal but check through and make sure that these are reasonable.

It will also normally specifiy penalties on municipal account and other service payments as well.

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SERVICES AND OTHER PROPERTY COSTS

The principle applied is that all services consumed are for the tenants account including electricty, water and sewerage. Normally rates and levies are payable by the landlord but there are exceptions. Make sure the lease is specific in this regard.

It is also the norm that the tenant maintains the garden, pool etc. There are occassions however where the landlord, in order to ensure the property upkeep of his property will insist that existing service providers are kept on and that the tenant pays these costs. Alternatively that the rental will include these services

Your lease will then specifiy these service providers as well as your or the landlords responsibility to continue payment. The alarm service might well be included in this as well.

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THE LEASE PERIOD

The lease will either be for a fixed period or indefinitley with one or two months notice. It will also include clauses stating whether it may continue on a month to month basis after the period or if you have the option to renew.

This section will also cater for notice periods applicable on periodic leases or for renewals. This ir normally one or two months.

Under the Consumer Protection Act, either party may give 20 working days notice to terminate the agreement early. There are penalties that may be imposed however so be very careful about randomly excerciding this right.

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OCCUPATION AND RISK
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The tenant is entitled to undisturbed occupacy and the landlord has the right to reasonable access while you are there. This access must also be with the tenants permission and would include access for inspections or maintenance work that needs to be undertaken.

Generally tenants are not allowed to sublet unless with permission and also may not have more people in the home than was agreed upon. Most landlords are very reasonable but just make sure before allowing your mother to move in with you, as you might find yourself in breach of the lease.

Insurance for the property itself is the owners responsibility and the tenant is responsible for insuring their own vehicles furniture etc.

In this section you will also find issues relating to the keeping of pets etc.

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MAINTENANCE AND ALTERATIONS

This often a confusing issue and many disputes arise around who must pay what. Check your lease as to exactly what it says and what issues are mentioned specifically. Property Network leases for instance specifically note that the pool pump is the tenants responsibility except for that portion that will be covered by the landlords insurance.

Generally, the tenant will be responsible for maintaining the entire property in good condition, fair wear and tear accepted. The landlords responsibility revolves around ensuring the property remains in a state suitable for tenancy so if a portion of the roof blows off it would be the landlords responsibility to fix.

This section will also cover circumstances around major damages as well as time frames given to conduct repairs, by both parties.

Very important to note is that no alterations or additions may be made to the property unless you have prior permission. This would include installing a satellite dish. Also, be aware that all additions become part of the property and must remain after the termination of the lease unless otherwise agreed.

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GENERAL TENANT RESPONSIBILITIES

Most of this section is common sense but tenants need to be specifically aware of issues sich as conducting activities that add risk to the property. If you hobby for instance is flame throwing you have to notify the landlord.

You will also acknowledge in this section your responsibility to adhere to any house rules that apply to sectional title or homeowner association properties.

Also, it is important to take note of your responsibility to notify the landlord in the event of a burglary, change in your financial circumstances etc

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TERMINATION OF LEASE

To put it very briefly, you agree to vacate the premises on the day you should, remove all your goods as well as rubbish, hand over the keys and have the property in an acceptable condition.

Penalties will normally be specified for lost keys, and your agent will conduct an inspection with you to ascertain any damages. Make the effort to attend the inspection as you will have no recourse later if you fail do to so.

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DEFAULT AND CANCELLATION

This is the part of the lease you never want to see enforced.

Defaults will incur laid out penalties and interest, loss of commissions to the agency as well as legal fees. Simple as that. Read this section carefully so that you clealy understand the full consequences of defaulting.

We cannot stress enough the importance of early communication in the event of financial crisis or problems. Many times these can be resolved amicably as opposed to an enforced route which ends up on your record.

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LEGAL AND GENERAL
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By and large, these clauses will be common sense and genrally accepted. Do take the time to read through them though in case there is something there that is unacceptable to you.

In our lease, it covers issues such as joint responsibility if signing jointly, a declaration by Aliens etc

VERY IMPORTANT - The lease agreement is deemed to be the full and final agreement between the parties. If anything is agreed to that is not in the lease, then get it in writing. Anything and everything that is important or has a monetary value attached - get it in writing.



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