Today I thought I will do us all a favor and explain a Lease Agreement with an actual workable printable example!
Please note that this example has not been checked by a professional lawyer and is simple the personal contract that I used in my rental units.
Things to cover within your Lease Agreement
1. Definitions and Interpretations
It is important to make sure your Tenant understands what they are signing. As such I included a Definitions and Interpretations section in the beginning of the contract. In this way you are sure your tenant understand what they are reading and signing. This may sound like such a waste of time and space, but honestly in South Africa we have learned, rather be on the safe side.
2. Lease Duration
This basically state the duration of the lease, will it be a full 12 months (full year) or will it work on a month to month basis from the start. Something to note in South Africa, once the original lease period (time duration) has passed the lease automatically turns into a month to month, continuing the agreements within the original lease. I personally like this principle as it’s great for us lazy landlords who often fall behind our paper work.
3. Rent Amount
For how much will you be renting out your property?
Also remember to add the % by which this amount can increase per year. This is important for if this is not stipulated your renter may refuse to pay the increased amount. As such one will have to be happy with your previous yearly amount or you will have to start searching for new renters with a 30 day notice period letter.
The % increase is usually that of inflation to 10%. Also if you want to increase the rent (after the initial time period) you as landlord has to give a 30 Day Rent Increase Notice Letter.
4. Additional Charges
This section is very important, your tenant will want to know exactly what they are paying for. As a point of interest it is generally accepted in South Africa that the Landlord will pay for all of the expenses except Electricity and Water (if so stipulated in the contract).
Be sure you know what your rental property cost you per month, and be sure what your actual profits will be. Remember to consider your wear and tear, maintenance and those drains and geasers that never seems to be working as they should.
5. Payments and Deposit
It is always important to keep all your receipts, especially when you will have to proof to your tenant that the expenses occurred was done by them (the tenant). It is also for the purpose of the rental deposit. A landlord is not allowed to make deductions from the rental deposit without proof, it is really that simple.
Want to know the can and cannot’s about Rental Deposit, well go have a look
6. Release, Waiver and Liability and Indemnity Agreement
I got this Indemnity section for a holiday resort and to be honest I think it covers us well. It is a “must” that you do have something similar to this in your contract, simply to ensure your financial safety.
Please feel free to download my Lease Agreement, as I said before this is the Lease Agreement I use for my personal rental units and thus far the contract has worked well for me and my hubby. If this however seems like a ton of work (which it is – managing your own property) then I urge you to make use of a company such as Mafadi. Mafadi manages all size clients, just give them a call and see how they can help.
Any views or opinions presented in this article are solely those of the author and do not necessarily represent those of the Mafadi Property.