The Importance of Having a Written Lease Agreement

agree-1728448_640 Up until now there have been two ways of entering into a Lease of Property Agreement: verbally or in writing.

  • Verbal lease agreements are recognised in South African common law. They are effectively month-to-month leases, and have been upheld as valid by our courts.
  • Written lease agreements are, of course, the norm. It’s far more difficult to argue a he-said-she-said when everything he and she said is in writing!

Things are about to change, however, in form of the Rental Housing Amendment Act* 2014. Section 5 of this Act requires that all lease agreements are in writing – and the landlord bears the onus of ensuring that a written contract of lease is signed. If a landlord fails to get the agreement of lease in writing s/he would be committing an offence and subject to a fine or two year’s imprisonment, or both. Section 5 also sets out the minimum requirements for a valid Lease Agreement: Here are the details that need to be reflected in a Property Rental Contract:

  • The names and addresses of both lessor and lessee
  • The addresses of the lessor and lessee for the purpose of any formal communications and legal notices
  • A description of the property being leased
  • The rental amount payable, and the calculation of a reasonable escalation of the rental
  • The deposit amount, if applicable
  • Frequency of the rental payments
  • The period of the lease (if it’s for a fixed term), or the notice period required to terminate the lease
  • Information relating to the tenant’s rights and obligations in terms of section 4A of the Act
  • Information relating to the landlord’s rights and obligations in terms of section 4B of the Act
  • Details of any additional charges that may be payable by the tenant

It has always been our opinion that written is best. The recent updates in the law means that written will be prescribed. All lessors are therefore urged to ensure that they have their template Lease Agreements in place to ensure that they comply with section 5 of the Act going forward. [*The Act was enacted on 5 November 2016. As at the date this article was penned we were still waiting for its date of operation.]

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.