select
|

Rent increases are subject to specified conditions

South African tenants in rented properties often have the idea that no rent increases can be allowed on a 12-month lease.

This, says Wayne Albutt, National Manager of Rawson Rentals, is substantially correct - but if landlords in a high demand area believe that more frequent rent increases should be allowed, they can arrange to have shorter leases, for example, six months and at the end of this period the rent can be renegotiated. Very often an arrangement of this kind will suit both the landlord and the tenant.

Some landlords, says Albutt, tend to think that any increase in rates, taxes or leases entitles them to pass these extra charges onto their tenants. This, however, is only legal if it has been stated in the original lease signed by both parties at the outset and can only become applicable during the second calendar year of a lease exceeding 12 months. This cannot be made applicable to leases on terms less than 12 months.

When a lease expires, both the landlord and the tenant sometimes opt to renew it on a month-to-month basis. In these conditions, says Albutt, the landlord is entitled to increase the rent at the end of every month if he so wishes, as long as he gives applicable notice (normally one month). It is for this reason that it is not really advisable for a tenant to renew a lease on such a short term basis.

“The principle at work here,” says Albutt, “is that once a lease has expired, totally new terms and conditions can be drawn up.”

Right now, says Albutt, the national average in rental increases is only 5% but this figure is misleading because it reflects, inclusively, the low demand for rentals in sparsely populated outlying areas such as country towns. In high demand areas, rent increases now being regularly achieved are around, and sometimes exceeding 10% with the result that the buy-to-let investor market, in this segment, is improving rapidly.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 18 Jun 2018
      Many home sellers are motivated to appoint estate agents because they know that the agency will carry the costs of advertising and marketing their property.
    • 18 Jun 2018
      When a property is sold when it has a tenant in occupation, the questions often raised are: “What happens to the tenant if the landlord sells the property?”, and what rights the tenant will have with regards to cancelling the lease or enforcing it, says Sunell Afrika, rentals manager for SAProperty.com.
    • 18 Jun 2018
      Sellers are often caught off-guard by the expenses incurred in the selling of a property. Just like there is no such thing as a free lunch, there is also no such thing as selling your property without incurring at least some costs.
    • 15 Jun 2018
      The second quarter of 2018 has proven to be the turning point for Midrand’s real estate market, especially the upper end which started to waver towards the end of a tumultuous 2017 with a notable drop in both sales and average selling prices.
    • 15 Jun 2018
      According to data recently released by FNB, the average age of a South African home buyer has increased from 38 to 44 this year. In an attempt to help first-time buyers enter the market sooner, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, walks us through the steps of saving for your first home.
    • 15 Jun 2018
      Putting your house on the market can be a stressful process. There are so many decisions to make that will impact how quickly your house is sold and for how much you can sell it for. It’s a serious money game where you can’t afford to make the wrong decision.
    • 14 Jun 2018
      The word tourist describes someone who is visiting South Africa for a limited time and is probably not going to buy a property here – so why is the tourism industry so important to the real estate sector?
    • 14 Jun 2018
      Serengeti Estates has entrenched its status as one of Johannesburg’s most desirable addresses for a spectrum of homeowners with its launch of The Signature Residences, a new cluster village.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK