A landlord wants to know how to handle a tenant who wants to renew his lease for a period of less than a year.
There is also an issue with the rental amount, with the renewal seemingly based on an earlier agreement as to the annual increase applicable.
A fixed-rand sum was agreed as an increase, but this is short of the requested eight per cent rise.
As with many matters of this nature, one can see why both parties may be somewhat frustrated.
The reader indicated that the tenant was experiencing some financial issues, which explains his reluctance to proceed with renewing or signing for a further full year.
See the reader’s question here.
This would also explain why he was unable to agree to an eight per cent increase and rather agreed to a rand amount he was able to pay.
The landlord is also a tenant and she relies on the rental income.
She has had to pay a 10 per cent increase on her rental, hence the need for a similar increase on the rental property.
Clearly, having no written lease is also not ideal and it appears there is uncertainty as to the period of the renewal with the tenant.
The Rental Housing Act states that a landlord is obliged to reduce an agreement entered into with a tenant to writing.
In this instance, it is not clear whether the agreement is for a year or on a monthly basis.
Logic would dictate that the lease being month to month is applicable, with the tenant having expressed that he won’t sign a one-year lease.
Furthermore, although the increase agreed wasn’t the eight per cent as requested, the tenant is paying R500 more per month.
Having done so for a few months already, it seems to have been accepted by the landlord.
It is also interesting to note that the regulations to the act provide that a landlord is obliged to give a tenant written notice of two months should he or she wish to increase the rental.
The rental increase should also be reasonable and based on relevant factors, such as inflation.
While it is understood that the landlord’s increase was 10 per cent, this would not necessarily translate directly to a commensurate or fixed percentage increase for her tenant.
Other rentals in the area should be considered as well as the desirability of the area and property and its condition, among other relevant factors.
This often results in annual increases of between six and eight per cent.
The previous annual increase applied was apparently six per cent, so 10 per cent might be considered a fair jump.
It is also quite possible that the parties agreed to a lower increase in the previous year to accommodate the needs of the tenant, but possibly with the idea of the next increase being a little higher to compensate the landlord.
If this was the case, it may have been prudent to record this intention, together with the justification, in writing.
Should the landlord be unhappy with the uncertainty as to the fluid nature of the lease, it would appear that she would have little other recourse than to give notice of her intention to terminate it.
One issue that immediately presents itself is that another tenant would then have to be sought.
However, this may have been the result in any event should the existing tenant give notice.
In conclusion, there is arguably some value in having a long-term and reliable tenant in place, even if there is some uncertainty as to the period or if one must compromise a little.
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