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Many people these days do not own a property due to financial reasons of not qualifying for a bond or due to work relocation which possibly makes it impractical to buy a house.  The result is that more people rent property which brings into effect a contract between a landlord and a tenant.

This contract can be verbal, unless the tenant requests the landlord to have the agreement reduced to writing or vice versa. A written contract is the safest route to go as it stipulates the terms and conditions upon which the property is occupied. It furthermore eliminates any possible misunderstandings that may arise between the parties, thereby reducing unnecessary disputes and costly litigation.

Common disputes which arise are:
1. Non-payment of rental;
2. Punctuality of rental payments;
3. Payment of municipal fees etc.;
4. Who is responsible for certain maintenance on the property;
5. Expiry / termination of the contract;
6. Cancellation in cases of breach of contract by either party;
7. Notice periods.

By reducing these essential terms to writing, it binds both parties and gives them a clear route to follow if they wish to call on any of their rights.

A problem that often arises for landlords is with a defaulting tenant, where the tenant who entered into the agreement is an entity such as a company or close corporation.  These are often "shells" and even if a judgement is obtained against a defaulting tenant for arrear rentals, the landlord has no success when executing the warrant of attachment via the sheriff, because the entity often has no assets.  It is therefore of the utmost importance that the representative/s of the entity sign as co-tenants to the contract. This will entitle the landlord to institute action against all the signatories to the lease agreement, resulting in a much greater chance of recovering arrear rentals or damages.

It is also important that a complete list of defects be compiled and signed by all parties within the first few days after occupation of the premises.  This will ensure that once the contract comes to an end, the parties can once again inspect the property  and compile a list of defects and use the deposit to remedy the defects, if needs be.

Lastly, it would be a good idea to obtain the permission of the tenant/s to do a background and credit search prior to entering into the rental contract, to ensure that the tenant has the financial means to meet the rental commitments of the contract.

By considering and implementing the above basic principles, the renting of a property stands a much greater chance of being a positive experience for both landlord and tenant.

For more information or any enquiries contact, Van Niekerk Steyn of Rauch Gertenbach Attorneys Inc. at 044 601 9900 or office@rgprok.co.za .