Which type of lease should I consider signing when renting out my property?
When you are entering the market of renting out a residential property one of the first questions that cross one’s mind is:
How do I get the tenant out of the property if he/she defaults on rental payments.
It is important to know that all landlords that rent a residential premises out to a private person is subject to the Prevention of Illegal Eviction From and Unlawful Occupation of Land Act 19 pf 1998 (PIE). PIE prescribes certain procedures regarding the service of legal process and time limits to be adhered to as well as the joinder of the local municipality to an action for eviction. The court hearing the application or action for eviction is furthermore constitutionally bound to take an active role in adjudicating eviction matters and to consider all relevant circumstances in each application or action for eviction before the application or order for eviction is granted. These procedures and adjudication role the court plays in eviction matters can lead to a lengthy time period for a landlord to reach the stage where he has evicted a non paying tenant in order to replace this tenant with a new paying tenant. This can have an adverse effect on the cash flow of the landlord.
It has to be born in mind however that an occupier can only be evicted if he is in occupation of the property unlawfully. A tenant only becomes an unlawful occupier once a lease (in terms of which the tenant occupies the property lawfully) is cancelled. The procedures for the cancellation of a lease and the time periods that needs to pass before the landlord can cancel a lease therefore becomes important factors as only once the lease is cancelled can eviction proceedings commence.
In order to cancel the lease, not only the provisions of the lease should be taken into account but also other relevant legislation. In this regard the provisions of the Consumer Protection Act (68 of 2008) are relevant. If the lease is a fixed term lease, for example a lease for six months or a year, the provisions of section 14 of the Consumer Protection Act applies, which requires the landlord to give 20 business days written notice of a breach of the agreement and only if the tenant then does not rectify the breach can the agreement be cancelled. The tenant can pay late every month and every time the landlord will have to give 20 business days notice only for the tenant to come up with payment at the last minute.
CONTACT US FOR YOUR LEASING REQUIREMENTS AND WE CAN ASSIST YOU TO NAVIGATE THE PITFALLS.
Kindly note that this article is not intended to be advice nor is it intended to be a complete rendition of all relevant laws governing leases and eviction.