Yes, TPN recommends that landlords perform a credit report on all adults over the age of 18 applying for rent.

In terms of the National Credit Act Regulations 18 (4) (e) and (5) you must first obtain the consent of each applicant before you access their credit report. TPN has drafted the consent clause for your use.

If the applicant tenant refuses to provide consent for you to perform his / her credit check – you are then not entitled to access the credit report. It is recommended that you decline the tenant’s application for rent.

No, this is a criminal offence in terms of the Rental Housing Act.

The landlord or Property Practitioner cannot change the locks, remove the front door or take any action which effectively locks the tenant out from the property or denies him peaceful occupation of the property without a court order.

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In a multi-let lease, it is important to give the full description of the premises, including the unit, door and/or room number so that there is no ambiguity as to what exactly would constitute the rented premises in a building. This would also help a Tenant understand their obligations in respect of a rented premises in a building.

We would encourage the Landlord to attach a floor plan of the building setting out the units and their corresponding door and / or room number. It would be advisable to demarcate the rented premises to the Tenant in the floor plan so that there can be no uncertainty in this regard. 

To read our article on the multi-let lease , click https://bit.ly/TPNLegalArticle

A mandatory disclosure is a mandatory (compulsory) document when the where the Landlord/ Owner discloses to the Tenant / Purchasers any latent (obvious) or patent (not obvious) information regarding the condition of the property which may have a bearing on whether the Tenant / Purchasers makes an offer to rent / buy the Premises. 

A mandate agreement cannot be accepted unless the Mandatory Disclosure Form is completed and signed by the landlord. This is regulated by section 67 of the Property Practitioners Act.

The Landlord’s Disclosure does not provide any warranties and does not negate the requirement for completing a joint incoming and outgoing Inspection Document.

Please note: the wording in this document is prescribed in the regulations to the PPA and can be subject to audit and fines if not used as required.

We are aware that the prescribed form only refers to sales, however the latest versions of the form in your Pack has been amended to suit rentals and sales. 

Please always ensure you are using the latest version.

The definition of "Fair Wear and Tear" is an important one because it often causes conflict between Landlords and Tenants.

It is precisely for this reason that Clause 17 of the Lease Agreement has been so carefully and specifically drafted. Currently there is no legislative definition of "Fair Wear and Tear", but generally it is deemed to be damage that occurs due to the ordinary use of the premises by a Tenant over the passage of time or the ordinary operation of natural elements.

Some examples of "Fair Wear and Tear" would be the following:

• old, warped window frames, 
• paint that has faded in the ordinary course, 
• plaster that has cracked as a building settles and 
• carpets worn as the result of being walked on. 

You will notice that the “Duration” clause in the CPA compliant Lease Agreement differs from the “Duration” clause in the non-CPA compliant Lease Agreement. This is due to the fact that, in terms of section 14 of the CPA, as read with Regulation 5 of the CPA, a fixed-term agreement (in this case, a Lease Agreement) may not subsist for longer than 24 months, unless the Landlord, as the supplier, can show a “demonstrable financial benefit” to the consumer, in this case the Tenant.

The Courts have yet to interpret precisely what constitutes a “demonstrable financial benefit”, but in the case of a Lease Agreement the view is that it would be something like no increase in Rental, or a property that is close to the Tenant’s office so that the Tenant can spend less money on travel. The question has been asked as to whether a Landlord may alter the clause to specify a longer duration. The answer is unequivocally no, as one may not contract out of the provisions of the CPA. As such, in the case of the CPA compliant Lease Agreement, where a Landlord wants the Lease Agreement run for a period longer than 24 months, clause 1.25 of the lease agreement MUST be completed.

This clause only appears in the  CPA compliant Lease Agreement and it is a very important clause. In terms of section 14 of the Consumer Protection Act 68 of 2008 ("the CPA"), the onus is only the Landlord or the Agent, as the case may be, to notify the Tenant of the fact that the Initial Period is due to expire and to set out all of the Tenant’s options in this regard.

This notification MUST be given not more than 80, but not less than 40 business days prior to the expiry of the Initial Period. This leaves a grey area where notification is not given within the requisite period, which has not yet been interpreted by the Courts and could potentially cause a dispute between the parties. As such, it is important for an Agent or Landlord to diarise precisely when the 80 business days period is to begin and ensure that the requisite notice is given so as to avoid any ambiguity.

In order to enforce any House and Body Corporate Rules, the Tenant is required to be familiar with such Rules. In terms of the Rental Housing Act 50 of 1999, whenever a Lease Agreement is reduced to writing,  a copy of the relevant House or Body Corporate Rules MUST be annexed to the Lease Agreement. This requirement is unfortunately often overlooked. If a Tenant has not had sight of the Rules, he or she cannot be expected to comply with them. As such, it is essential that such Rules be annexed to the Lease Agreement so as to ensure that they can be enforced.

It is essential that there is no ambiguity regarding the date and manner in which Rental is to be paid by the Tenant. Section 5 of the Unfair Practises Regulations to the Rental Housing Act 50 of 1999 (which apply to all residential rentals) specifies that unless a Tenant is otherwise notified in writing, Rental is payable at the dwelling on the first day of each month. This is vague in the sense that there is no real guidance insofar as the actual manner in which the Rental is to be paid. Is it by cheque, in cash, via EFT? It is for this reason that you will note that this clause 10 specifies that the Rental must CLEAR in the Landlord’s nominated bank account by the 1^st (First) of every month. If the word CLEAR was not inserted, Tenants would be able to effect payment on the 1^st (First), but the funds would potentially only clear a few days later or, in the case of payment by cheque, a few weeks later, thereby prejudicing the Landlord.

The Deposit may be any amount that the parties agree to and need not only be the equivalent of 1 (One) month’s Rental. If there is any doubt as to the integrity of the Tenant, a larger Deposit should be taken. The Deposit must be held in an interest-bearing account and may not be utilised during the subsistence of the Lease Agreement. Apart from being a legal requirement, the reason for this is twofold: firstly because by utilising the Deposit early, the amount of interest generated will be affected and secondly, because if the Deposit is whittled down early, there is no guarantee that there will be any funds left upon termination of the Lease Agreement to cover damage to the Premises, arrear Rental, lost keys and the like.

At the end of the Lease Agreement the Deposit, less any deductions must be refunded to the Tenant within 14 (Fourteen) days. In terms of the Rental Housing Act 50 of 1999, a Deposit may, in certain circumstances, need to be refunded within 7 (Seven) or 21 (Twenty-One) days, but for the purposes of clarity, this clause stipulates 14 (Fourteen) days.

Interest will accrue to the party selected in clause 1.9. This is in terms of Regulation 9 of the Code of Conduct for Estate Agents which stipulates that unless the parties agree in writing to whom interest earned on such money must be paid, the interest will automatically accrue to the Estate Agents Fidelity Fund. This would obviously not be applicable to Landlords who are, in terms of the Rental Housing Act 55 of 1999 obliged to refund the interest to the Tenant.

Find out more here https://mrisoftware.tpn.co.za/blog/rental-deposits-demystified-what-when-how-and-why/

Both an ingoing and an outgoing inspection are a legal requirement in terms of the Rental Housing Act 50 of 1999 (“RHA”) and hence the importance of this clause. The purpose of the inspection is obviously to ascertain the existence of any defects, and it should be noted that a general viewing by the Tenant of the Premises does not constitute an inspection and hence the requirement in this clause that any defects be recorded in writing and annexed to the Lease Agreement. This ensures no ambiguity when the outgoing inspection is done. It is also a legal requirement in terms of the RHA that the outgoing inspection be performed within 3 (Three) days prior to the expiration of the Lease Agreement, and hence the content of this clause. From a practical perspective, it is obviously advisable to do the inspection as close as possible to the actual termination date in case any further damage is caused by the Tenant prior to him or her vacating.

Watch our interesting webinar about Property Inspections here 

Clause 17 sets out the various obligations of the parties and, as such, any items that the Tenant is not specifically required to maintain and repair will be for the account of the Landlord. It is a legal requirement that the Tenant notify the Landlord, in writing, of any repairs that need to be affected which are not for the account of the Tenant. Usually, the cost of these repairs is for the account of the Landlord.  Where, however, the Tenant fails to notify the Landlord of such damage and the Landlord becomes aware of the damage at a later stage i.e. a small leak becomes a spray of water and damages the carpets in the Premises, then this clause specifically provides that the costs of repairing the damage will be for the account of the Tenant. This position is confirmed by the case of Radloff v Kaplan 1914 EDL 357, which position has been upheld in multiple more recent cases.

In terms of both section 4 of the Rental Housing Act 50 of 1999 (“the RHA”) and the Unfair Practises Regulations, a Landlord must be granted access to the Premises, provided that reasonable notice is given to the Tenant.

Despite this requirement, many Tenants refuse access and raise issues of privacy during the subsistence of the Lease Agreement and, as such, the Tenant’s attention should be drawn to this clause. Reasonable access includes bringing prospective tenants, purchasers, and agents to view the Premises.

Read more in our article https://mrisoftware.tpn.co.za/blog/is-your-tenant-refusing-access-to-the-property/

Parties are free to agree as they deem fit insofar as the maintenance of the Premises is concerned and, as such, this clause clearly sets out the duties of the Tenant insofar as maintenance of the Premises and behaviour are concerned. It is important to note that in terms of this particular clause, the Tenant is obliged to maintain all geysers, water taps and accessories. The reason for this is due to the fact that most Tenants are under the impression that the Landlord must maintain all these items, which results in the Landlord being called out to fix every tiny leak or loose tap. Obviously, in the case of a geyser bursting, the Landlord would be responsible, but where it comes to ensuring that rivets are not loose and rust is monitored, this is specified as being an obligation of the Tenant.

The exact nature of this clause should be explained to the Tenant so as to avoid any confusion. Furthermore, 17.1.12 refers back to the definition of "Fair Wear and Tear". It is important that the Tenant be aware of the fact that where he or she fails to maintain an item, for example, allows a key to rust in a lock, and the item is subsequently damaged or needs to be repaired, this will not constitute “Fair Wear and Tear” for the purposes of the outgoing inspection. This position is confirmed in the case of Sarkin v Koren 1949 (3) SA 545 and Green v Heyman 1963 (3) SA 390 (T).

It is essential to ascertain whether or not the provisions of the Consumer Protection Act 68 of 2008 (“CPA”) apply in each instance, because this will determine the rights and obligations of the parties. This clause alerts the parties to the fact that the CPA may or may not apply and can seem rather confusing. In reality, however, determining whether or not the CPA applies is actually quite simple and can be summarised as follows:

If the tenant is an individual, including a Sole Proprietorship, then the provisions of the CPA will always apply.

If the Tenant is a Company, Close Corporation, Trust or Body Corporate (“juristic entity”) with an asset value or annual turnover of more than R2 000 000.00 (Two Million Rand), then the provisions of the CPA will not apply (note that when calculating the threshold, gross and not net amounts apply).

If the Tenant is a juristic entity with an asset value or annual turnover of less than R2 000 000.00 (Two Million Rand), then the provisions of the CPA will apply, save for the provisions of section 14.

The Duration, Automatic Renewal and Notification clauses deal specifically with the provisions of section 14 and this is the reason that they differ/are not applicable in the non – CPA compliant Lease Agreement.

This clause needs to be read in conjunction with clause 1.19 and relates to section 16 of the Consumer Protection Act 68 of 2008. In terms of this section, whenever a Tenant is approached by an Agent or Landlord directly and the Tenant subsequently concludes a Lease Agreement as a result of such approach, the Tenant has 5 (Five) business days within which to elect to cancel the Lease Agreement, without providing any reason and without needing to pay any penalty. Merely advertising properties on the internet would not constitute direct marketing, but inserting a pamphlet featuring bargain properties into an individual’s mailbox very well may. For obvious reasons, this clause does not appear in the non – CPA compliant Lease Agreement.

This clause deals specifically with the provisions of section 14 of the Consumer Protection Act 68 of 2008 (“the CPA”)and stipulates that a Tenant is entitled to cancel a Lease Agreement at any time during the subsistence of the Lease Agreement, for any reason, on 20 (Twenty) business days notice to the Landlord or Agent, subject to a reasonable penalty.

There are guidelines insofar as calculating what constitutes a “reasonable” penalty, as contained in Regulation 5 to the CPA, but these guidelines are not definite and still need to be interpreted by the Courts. It is for this reason that clause 1.27 is so important, because it allows the parties to agree from the outset what will constitute a reasonable penalty in the event that the Tenant cancels and therefore avoid a dispute. TPN suggests between 1 (One) and 3 (Three) months’ Rental, depending on the amount of time still due to elapse in terms of the Lease Agreement.

Obviously, if a new Tenant can be found before the existing Tenant vacates, then the clause stipulates that “reasonable” will be deemed to be the advertising costs and the commission due to the Agent. This clause is important, because it protects the Agent against what normally otherwise ends up being a sticky situation. For obvious reasons, this clause does not appear in the non-CPA compliant Lease Agreement.

Although the landlord’s tacit hypothec exists automatically at common law, by including this clause in the Lease Agreement, the Landlord’s rights are strengthened because the Tenant will be made directly aware of the fact that his goods may be attached and cannot claim ignorance at a later stage.

The principle behind the landlord’s tacit hypothec is that where a tenant is in arrears insofar as the payment of rental is concerned, a landlord is entitled to attach movable goods on the leased premises equal in value to the arrear rental, together with the costs of recovering such rental. These goods can then be sold in execution and the proceeds utilized to satisfy the debt owing to the landlord. It therefore stands to reason that the Tenant should not be entitled to alienate these goods during the course of the Lease Agreement.

A suretyship clause is very important because it provides the landlord with additional security in the event that rental is not paid. Importantly, when a surety signs as both a surety and a co-principle debtor, as is provided for in the TPN Suretyship Agreement, the Landlord’s rights are even further protected because the Landlord need not even claim amounts owing from the Tenant first, but may rather proceed directly against the surety for any outstanding amounts. Legally, this is termed “renouncing the benefit of excussion” and is particularly beneficial in an instance where, for example, a company is not generating enough profit to pay rental. In such a case the Landlord would be able to claim the rental directly from the directors of the company in their personal capacity. In terms o,f the TPN Suretyship Agreement, the directors will be bound jointly and severally. This means that the Landlord can elect to split the outstanding amount between the surities or simply claim the total amount from one surety alone.

It is vitally important that you get all the relevant documentation form foreign nationals. All copies of passports should be certified, the originals should be presented and copies of the relevant visa documentation should be requested and provided on a yearly basis.

It is important to take these steps so as to ensure that your risk is minimalised as in terms of Section 42 (1) of the Immigration Act 13 of 2002: “save for necessary humanitarian assistance, no person shall aid, abet, assist, enable or in any manner help an illegal foreigner including but not limited to harbouring him or her, which includes providing accommodation or letting or selling or in any manner making available any immovable property in the Republic to him or her”

A Natural Person Lease must be signed when the Tenant is a Natural Person or a Juristic Person with both an asset value and an annual turnover of less than R2 million. 

A Natural Person is an individual and not an entity as listed below.

A Juristic Person Lease must be signed (regardless of their asset value or annual turnover) if both the Tenant and the Landlord are:

1. Companies;
2. Close Corporations;
3. Body Corporates;
4. Partnerships;
5. Associations; or
6. Trusts.
   

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As a word subscriber, we have also given you access to a free digital signature platform called eSign. eSign allows you to send the TPN LeasePack documents out for electronic signature. 

Click here for to find out more about accessing eSign.  

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