Tough times over the past two years have prompted many private property owners to become landlords, and now low interest rates and prices are also bringing buy-to-let investors back into the market.

Consequently, there is much greater demand now for the services of estate agents that handle leasing, and many whose primary expertise was in sales have turned their hands to property administration.

However, says Berry Everitt, CEO of the Chas Everitt International property group, the situation is not altogether rosy, as there is great potential for disputes between landlords and their agents if both are inexperienced, most of these arising from poor communication.

“There is thus a need for landlords to give their rental agents clear, written mandates before they allow them to let their properties.”

These mandates, he suggests, should cover the following:

- The role you wish the agent to play – is it simply to advertise the property and find a tenant, or do you expect him to continuously manage the property during the lease period?

- The amount of commission payable to the agent and whether it will be paid as a lump sum on commencement of a lease, or monthly;

- The amount the agent may spend on maintenance and minor repairs without reference to you, and what he should do if larger repairs become necessary;

- The standard of workmanship you require from maintenance or repair crews, bearing in mind that you may wish to sell the property at a later stage; and

- Exactly what steps are to be taken in the event of non-payment of rental.

Everitt says landlords leasing furnished premises should also request that the agent take a proper inventory before tenants move in, and again immediately after they leave.

“They should also insist on written proof of what the agent has done to establish the creditworthiness of any potential tenant – and clearly instruct the agent that no tenant is ever, under any circumstances, to be allowed to take occupation of the property until the deposit has been paid in full.”

CEO Martin Schultheiss says whether you’re a landlord or a tenant, you should have a written lease, and make sure it contains certain essential clauses.

“Although a verbal lease is legal, it is preferable to have a written agreement to avoid any misunderstandings or disputes in future.”

“The landlord as well as tenants should check to see that the lease contains certain clauses.”

These include:

- A clause clearly identifying and describing the property that is being let, and stating how many people may live there;

- A clause formally identifying the landlord and the tenant;

- A clause stating the period of the lease and if and when it can be renewed;

- A clause stating the amount of rent payable and how and when it should be paid, for example into a certain bank account on the first of every month;

- A clause detailing any other charges payable, such as municipal charges for water and electricity consumption, or perhaps a percentage of the levy if it is a sectional title property;

- A clause outlining the responsibilities of the landlord, such as maintaining the property and making sure that any essential repairs are made quickly;

- A clause outlining the responsibilities of the tenant, such as doing no damage to the property and using it only for its proper purpose – for example, not running a business from a residential property;

- A clause or two stating what the process and consequences will be if either party breaches the agreement, for example what will happen if the tenant does not pay what due is on time, or what the tenant can do if the landlord lets the property go to rack and ruin.

“And probably most importantly, since this issue causes more disputes between tenants and landlords than any other, there must be a clause stating what deposit is payable by the tenant, where it will be kept and in what circumstances it will be or won’t be paid back.”

He also cautions that no-one should ever sign a lease unless they are sure that they fully understand the contents, and should seek expert advice if there’s any aspect that’s unclear. – Eugene Brink

Readers' Comments Have a comment about this article? Email us now.

Considering the facts in this article, I would just like some advice on my legal rights as a tenant... We moved into a flat on 28 February 2010. The flat stood unoccupied for a month before we moved in, and although the letting agency knew that we would be moving in on above-mentioned date almost 1.5 months in advance, no maintenance / repairs were done before we moved in. The flat is inside a security complex and we have a Body Corporate that's in charge of the rules and regulations.

1) They are billing us for electricity on a monthly basis, although there is a prepaid electricity meter inside the flat and we were told to recharge it with electricity on a regular basis. Therefore, we weren't expecting another monthly electricity bill from the letting agency.

2) When it rains, the water accumulates in the parking area, as the Body Corporate has not been maintaining the water drainage system. This causes the water to flood our cars, which causes our cars' carpets to become rotten. I've sent the manager of the letting agency an e-mail regarding this matter and she basically said that she is trying to sort the matter out with the Body Corporate, but that we should have insurance that covers flood damage... My point is that the insurance will not cover it, because it is due to negligence on the Body Corporate's part. After speaking to neighbours, I knew that the flooding was happening on an ongoing basis for the last 1.5 years and nobody has done anything about it. We are now forced to park our cars outside the complex when it rains, in an open area where there is no protection from theft. What if our cars get stolen?

3) Immediately after we took occupation, we completed a thorough inspection of the property and filled in the required inspection list. We faxed it through to the letting agency and enquired when they could send a maintenance person / team to do the required repairs. The manager said that she would get a quote, liaise with the landlord and let me know. After another 2 weeks of not hearing anything from the letting agency had gone by, I phoned again, but still got no definite answer... It is now 2 months after we've taken occupation and we're still struggling to get the repairs done. We don't have the name or contact details of the landlord in order to state our issue. The letting agency is not being helpful and said that if we're unhappy, we could give them 2 months notice and the manager would work out the costs involved, but we've signed a 12-month-fixed-term lease-agreement which means that they would charge us for the outstanding rental on this lease?

My conclusion is that we are not the ones breaching the contract here, they are, yet they expect us to pay the monthly rental (and their commission) although we're not receiving efficient service from them... Please advise what our rights are and what legal action we can take against the letting agency / landlord or how to get out of the contract without having to pay the outstanding rental? Up to date, we've paid our monthly rental before / on time, although I've refused to pay the extra electricity bill as we are already paying for pre-paid electricity. -

Michelle Rothman