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Tuesday Oct 16, 2018

Read fine print in lease

Landlords and tenants must ensure they agree to certain essential requirements for a lease agreement to come into existence. In addition to important information that is a part of a lease contract, the Rental Housing Act 50 of 1999 requires tenant and landlord to include specific information and imposes certain duties.

A Namibian court judgment summarises the broad requirements of a lease agreement, without which parties cannot claim to have concluded an agreement:
The essential terms of a contract of lease are an undertaking by the lessor that the lessee shall have the use and enjoyment of the property, thereby leased for a limited period of time (that is, a certain period) in consideration for an undertaking by the lessee to pay a certain rent. Thus, payment of rent and duration of the contract are essential elements of a lease” (Nekwaya and Another v Nekwaya and Another 2010 NAHC 8).

There must be agreement regarding the dwelling to be rented out, the rental amount, when it is due and where and how it is payable (for example – in cash, cheque, directly to landlord; agent, or into a bank account).
As for the rental, the tenant must pay the agreed amount on the due date. Late payment can result in cancellation of the agreement. The landlord can cancel for breach and start eviction proceedings if the tenant fails to remedy the breach.

If the tenant is required to pay a security deposit, the amount must be settled and paid before the tenant takes occupation. The deposit must then be placed in an interest bearing account.

A joint inspection between the landlord and the tenant must be carried out before the tenant takes occupation, as well as three days before the tenant moves out. If there are repairs needed, the landlord is under obligation to carry out the repairs identified.

Parties have to agree on the duration of the lease contract. It may be a fixed period, that is, six months or two years or a periodic lease, such as a daily, weekly or a month-to-month lease.
While not part of the essential requirements of a lease, duties and responsibilities of the parties must be clearly stated or understood.

The parties must be clear about their responsibilities regarding internal and external maintenance to avoid conflicts. Should there be service charges, parties must know who would be paying for these. If it is the tenant, then the amount or proportion to be paid by the tenant in respect of electricity and water charges must be part of the agreement to avoid disputes.

The tenant is responsible for any repair caused through damage by him or her or his or her family or visitors. The tenant is under duty to prevent any damage, vandalism or nuisance. The act extends this duty to family members and visitors, holding the tenant responsible for their behaviour.

It is important to stipulate clearly in the lease agreement the duties and obligations of parties. It is not uncommon to find a clause that clarifies the responsibilities regarding maintenance.

(A) tenant shall keep the dwelling in a clean, tidy, safe and sanitary condition and shall otherwise comply with all local municipal laws requiring tenants to maintain rented dwelling. If damage to the dwelling (other than normal wear and tear) is caused by acts or neglect of a tenant, tenant’s visitors or others occupying the dwelling under his/her control, the tenant must repair such damage at his or her own expense.

Upon a tenant’s failure to make such repairs and after reasonable written notice by landlord, the landlord may carry out such repairs to be made and the tenant shall be liable for any reasonable expense thereby incurred by landlord. The landlord upon request will provide tenant with all receipts and vouchers regarding the repairs.
A landlord took all the necessary steps stated above to ensure that his rights and obligations and those of his tenants were clearly and properly understood.

He employed an agent to find a tenant, to ensure the written lease complied with the legal requirements, and to handle the tenancy portfolio. The agent presented a prospective tenant who was considered a good tenant.
The landlord informed the tenant that since he was forced to relocate to another province, and was burdened by relocation costs and bond repayment, he would be grateful if the tenant could pay four months’ rent in advance. The tenant obliged and an agreement was concluded.

The relationship began to deteriorate when the tenant was unable to pay the full rental and made demands not allowed by their agreement.

The landlord terminated the lease for arrear rentals. The tenant was aggrieved at the fact that he helped his landlord by giving him the advance rentals needed to alleviate his predicament.

Parties had obviously crossed their contractual boundary.

In another case, a 76-year-old woman allowed a tenant to occupy a portion of her property at a reasonable rental. The landlady became dependent on the tenant for simple chores and a good relationship developed between them.

When the landlady attempted to increase the rental after several years, the tenant was unable to afford the increase and paid a negligible increase. The landlady, due to her poor health and failing memory, accepted the rental but her children later decided the tenant had to move out and served her with a notice to vacate.

Here, too, the landlady and tenant had compromised their contractual relationship.

It is immoral to take advantage of landlords who are vulnerable, old or frail. Parties to a lease must maintain boundaries and endeavour to fulfil their obligations. This must not prevent them from ensuring a cordial relationship and treating each other respectfully.

 
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