Renting 101

Kabous le Roux authored a good article on the basics of renting. We recommend all would-be tenants and landlords to educate themselves on the basics of property letting to ensure they know their respective rights and obligations.

A good agent will be able to provide indispensable advice and assistance in this regard. The agent should assist both landlord and owner with all the legal, practical and financial matters that are relevant to a lease agreement. This includes everything from the marketing of the property, showing the property to prospective tenants, doing the necessary credit and reference checks on a prospective tenant, getting a deposit from the tenant, getting the landlord and tenant to conclude a fair lease agreement, doing the necessary inspections, looking after property, taking care of tenants’ requests, collecting the rent etc. More than ever, it’s important to deal with professional and reputable agents.

The article can be see here.

An introduction to lease agreements

There could be many reasons why people decide not to own their own properties. For instance, many people simply cannot afford the monthly bond repayments, maintenance and other costs associated with ownership. For them, renting a house makes a lot of sense. One can often rent a better and bigger property than you can afford to buy. Other people move around a lot for work and need some flexibility.

If you decide to rent, you will probably be required to sign a lease agreement. The lease agreement is simply the contract that governs the relationship between the landlord (the lessor) and the person renting the property (the lessee) in which the landlord gives temporary use and enjoyment of the property to the tenant in return for the rental payment(s). There are usually a number of other clauses in the lease agreement also that set out the respective rights and obligations of the landlord and tenant.

The Rental Housing Act of 1999 applies to lease agreements concluded in South Africa. In accordance with the Constitution of South Africa, this Act essentially prohibits discrimination on any grounds when considering a potential tenant. The Act also applies to the advertisement placed by a landlord. The landlord may not advertise “men only”, “no lesbians”, “professionals preferred”, or “no children” etc. Any discrimination on the grounds of race, gender, marital status, age, religion, disability etc, will be illegal.

A lease agreement may be a verbal agreement, but, as stated above, it is better to commit your agreement to writing. The lessee may request a written agreement from the landlord. The written agreement must contain the following clauses:

• The full names and addresses of both landlord and tenant;
• A proper description of the property that is leased;
• The rental amount and escalation, if any, thereof;
• The frequency of the rental payments (weekly, monthly, annually etc.);
• The duration of the lease;
• A termination clause, which must include the notice period required to terminate the lease agreement;
• Obligations of both the landlord and tenant;
• Other charges payable by the tenant over and above the rental such as water, electricity, satellite TV etc., if any.

If the property is situated in a sectional title scheme, we recommend you include the rules of that scheme in the lease agreement. This saves landlords a lot of headaches later. It is also a good idea to include a list of all defects to the property so that there are no disputes about responsibility at the end of the lease. Furniture should be listed in an inventory.

At Terblanche Thomas we assist both landlords and tenants in the Garden Route (and the rest of SA) with all the complexities of lease agreements. Talk to us if you want to make sure that you’ve covered all the bases.

The importance of screening tenants

One of the most important things a property owner must try and achieve is to find the right tenants for his property. Let me say that in a different way. As a property owner your biggest challenge will not just be to find tenants but to find the RIGHT tenants for your property. See, many property investors do not spend the necessary time and effort to make sure the people they put into their properties are the kind of people who will hand that property back in the same state at the end of the contract.

The screening of potential tenants is a crucial step in the buy-to-let process. You absolutely have to run background checks on potential tenants, check and confirm their references, do credit record checks on them and scrutinise all information provided by them very carefully. See, the letting business is ultimately a people business and you must never forget that you are dealing with people. Listen to them when you interview or screen them. What they say to you will indicate whether they are stable or not, at what stage of their lives they are in, whether they plan to pay or move from house to house like professional squatters. Listen to what their employers say about them when you check their employment status.

A thorough screening process will identify the bad apples. Of course there are no absolute truths in life but it helps to do your homework thoroughly. A professional and reputable company like Terblanche Thomas Property Solutions can be of immense value to you in this regard. As a rule, you should not rent anything to anyone who has not been through a criminal and credit check. You should also do proper background checks on all your tenants. If your potential tenants are a married couple or living together, do these checks on both of them.

Screening removes the bad apples! Talk to us if you want to make sure you get the right people in your property.