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Wednesday Jun 12, 2013

Provisions of a property lease agreement

There are strict requirements in terms of the Rental Housing Act 50 of 1999 and the Consumer Protection Act 68 of 2008. These requirements are deemed or considered to be in the lease even if not written into the lease.

A landlord and tenant ought to have knowledge of these provisions because it affects their relationship during the lease period and when the lease ends. Parties cannot waive the requirements of both acts.

Deemed provisions of the Rental Housing Act: In terms of section 5 (3) of the act, a lease will be deemed to include the following:

  • The landlord providing the tenant with receipts for all payments received.

  • To pay a deposit, if required, before moving into the dwelling.

  • The deposit must be invested by the landlord in an interest-bearing account with a financial institution.

  • An inspection of the dwelling jointly undertaken by the tenant and the landlord before the tenant moves into the dwelling and at the end of the lease term.

  • The refund of the deposit within seven days after the tenant has vacated the dwelling.

  • The landlord may use such deposit and interest at the end of the lease for reasonable repair cost and provide proof of such costs.

  • The landlord will have no claim to the deposit and interest for failing to carry out the joint inspections with the tenant.

  • The landlord retains his right to the deposit, plus interest, and other right or remedy in the event the tenant fails to respond to the landlord's request for an inspection.

  • The landlord must provide proof of the expenses incurred when claiming lease costs from a tenant.

  • The above are standard provisions that may not be waived by the tenant or the landlord (section 5 (4)) and are enforceable in a competent court.

    Non-waiver provisions of the Consumer Protection Act:

  • The lease must be in plain language that can be understood by the tenant.

  • Irrespective of a clause to the contrary, a tenant can cancel a fixed lease by giving a 20 business days' notice, but is liable for a penalty.

  • No provision in the lease or the lease as a whole can be one-sided or inequitable, favouring the landlord.

  • The entire lease agreement may be rendered void and consequently unenforceable if the landlord includes his own prohibitive provisions in the lease to circumvent the act.

  • A landlord can be vicariously liable on a joint basis, or several bases, if his agent does not comply with the act lease requirements.

  • A landlord cannot be exempt from or limit his liability owing to gross negligence on his part.

  • The tenant's attention must be drawn to any liability or indemnity that limits the landlord's risk.

  • A landlord must notify the tenant in writing that the lease is to end as per their agreement; such notice is to be provided at least 40 days before the expiration of the lease.

    A lease that excludes these provisions or contains a waiver to exempt the landlord, will not affect the tenant's statutory rights. In the case of a Consumer Protection Act lease, the entire lease may become void (cancelled) with serious consequences for the landlord for non-compliance. This includes financial implications arising from a fine and possible imprisonment.

    If a party who lodges a complaint with the Rental Housing Tribunal is successful, the respondent (the person against whom the complaint was made), may be liable on conviction to a fine or maximum of two years' imprisonment or to both a fine and imprisonment according to section 16 (1) (b) - (h)) of the act.

    The offence, for example, may relate to the landlord illegally disconnecting services to deprive the tenant of water or electricity; or the tenant, his or her visitor or household responsible for damaging the dwelling.

    In the case of a Consumer Protection Act lease, there are severe penalties and administrative fines for non-compliance, for example, in the case of false advertising, there is an administrative fine of 10 percent of the respondent's annual turnover or a fine up to R1m (section 112 (1). According to section 111 (1) (a) of the act if a person is found guilty of divulging confidential information, he or she may be liable to a fine or a maximum of 10 years' imprisonment or to both a fine and imprisonment.

    Sayed Iqbal Mohamed
    Chairman of the Organisation of Civic Rights
    Tenant Issues
    Daily News

    For advice on tenants' rights, contact Loshni Naidoo or Pretty Gumede at 031 304 6451.

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