If you are considering leasing out your property, it is important that you, as landlord, and the tenant agree on your respective rights and obligations.
A basic lease agreement should at least contain the below information, but in more detail:
- Basic information (who, where, what, duration)
The details of those who are party to the agreement, the address of the property being leased out, and the lease period.
- A deposit and other fees
The purpose of a deposit is to ensure that, should there be any damages to a property due to the tenant’s fault, they could be repaired without the landlord incurring the expenses or waiting for the tenant to pay for said damages.
Remember that the landlord is legally obligated to deposit this money into an interest-bearing account, held with a financial institution. The tenant is entitled to receive the deposit and all interest earned on the money over the period it was held for, after deduction of any damages, at the end of the lease agreement.
- Responsibilities, repairs and maintenance of the premises
Landlords are not able to oversee everything the tenant does, and this is where the responsibility and maintenance clause comes in. If the property’s utilities will be included in the rent, it should be stipulated and not assumed. It must be explicit who will be responsible for the general upkeep, such as mowing the lawn or cleaning the pool. An oral agreement will not suffice because if it is not in writing, it is easy to challenge in future.
- Subletting and limits on occupancy
All the adults who will be living on the premises should be party to the agreement; their names, details and signatures must be provided. This allows for the landlord to determine who may live on the property and serves as proof that these are the occupants that he/she has approved. Explicitly state in the agreement whether subletting is allowed or not.
- Rent payment
It is very important to state the rent payable, as well as annual escalation in the event of a longer lease. In addition, details regarding the amount, date on which it is to be paid, acceptable payment methods, and repercussions of failing to meet these requirements, must be included.
- Termination of the lease
The terms that warrant a lease to be terminated must be included in the agreement.
- Pets
If pets are allowed on the property, descriptive limitations and restrictions must be included.
For more information regarding lease agreements, please contact:
Henning Pieterse | Partner
Areas of Expertise: Corporate & Commercial Law