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Tuesday Mar 11, 2014

'Phasing out of verbal leases a welcome change'

Currently, according to rental housing common law, residential leases can be verbal and the only requirement is that the notice periods be given in writing, but this can lead to numerous problems, either in miscommunication or some conditions being forgotten, says Michael Bauer, managing director of the estate agency IHPC.

Verbal agreements have so many interpretations and, because they are based on memory and what 'he and she said', they can become vague when a dispute arises, he said.

The decision to phase out verbal agreements as in the proposed changes to the Rental Housing Amendment Bill, which is currently sitting at Parliament and awaiting approval, will make it law that all lease agreements be committed to writing. The changes proposed will place the onus on the landlord to ensure his lease is in writing, and this will be enforceable in court or tribunal and no oral leases will be valid if the bill is passed.

This change is a welcome one because there are so many details to a lease that could lead to disputes between the landlord and tenant, said Bauer.

In a particular case Bauer has come across recently where the landlord gave the tenant a substantial discount in lieu of maintenance and repairs that needed to be done, when the tenant moved out the amount of work did not equate to the total discount in the rent. When the landlord questioned the tenant, the tenant said that he felt that he had done enough in repairs and maintenance to the building, and as nothing had been written down, the landlord has lost out, said Bauer.

Having leases in writing protects both parties, he said, it is not that either party gains more than the other. This will be particularly helpful is in letting in sectional title schemes and estates run by HOAs, where there will be conduct rules which need to be adhered to. These rules would usually be attached to the lease, so they become part of the conditions of the lease.

Lease agreements not only stipulate rental paid each month but both parties know exactly what their responsibilities are in terms of looking after the property, the number of people allowed to live on the property, whether there are animals allowed, etc.

'We at IHPC always recommend that all leases be in writing and all conditions or changes made be in writing as well,' said Bauer. 'We insist that the conduct rules be attached to the lease, as these have to be stuck to by the tenant or his landlord may be fined by the body corporate or HOA. Everything agreed on must be in writing, particularly where large sums of money are involved. Even post-lease changes or agreements such as repairs to the building or changes made, e.g. a security gate installation, should be noted. Email is acceptable, but whichever method is used, be sure it is done to safeguard yourself.'

IHPC Press Release

 
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