Do-it-yourself lease agreements unenforceable

Posted On Wednesday, 25 April 2012 02:00 Published by eProp Commercial Property News
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It is perfectly understandable that people who have proved successful in other spheres should feel that they can handle a ‘simple’ lease arrangement on their own

Ian Teague

According to Ian Teague of Gunston Attorneys “the plain truth is that all our experience shows that do-it-yourself landlords are likely to make serious, costly mistakes which can complicate matters, especially now that the Consumer Protection Act is operative and protective of consumers’ rights.”

Teague warned that when things do go wrong and landlords find themselves with a defaulting tenant who simply cannot or will not pay – and is also possibly neglecting the maintenance of the property – eviction proceedings have to be initiated, even though they cause such emotional distress and result in further non-payment of rents.  An eviction can, he said, take as little as three months but if it is contested may well take far longer and during this time it is highly unlikely that further rents will be collected. 

“We have this year seen a discernible rise in the number of cases dealing with defaulting tenants and in the instances where the landlord has had to go ahead with an eviction.” Teague continues: “Attorneys are usually hesitant to start an eviction process.  However, it has to be recognised that quite often this is the only course left open to a landlord and, in my experience, once a tenant starts defaulting, it very quickly becomes habitual (usually because he or she is suffering financially) and delays by the landlord in taking action can be very costly.  Once defaults start, the writing is on the wall.  All our experience shows that it is better to cut one’s losses with a poor tenant and start again.”

Asked if most of these difficulties cannot be avoided if a landlord appoints a competent rental agent, Teague said that the competency levels of rental agencies throughout the Greater Cape Town area, for example, vary widely – as does their ability to detect in advance tenant trouble and to handle difficult tenants.

“Although there are brilliant agents who manage to keep their default payments below 2% or 3% - and we have to commend them for this – there are many others who are now operating on 10% to 20% defaults where rents are either not paid or paid seriously late.  It also has to be said that the relationships between the tenant, the landlord and the agent are important and in our experience the small one or two man teams giving a dedicated service to a specified area often achieve the best results.

Last modified on Monday, 10 March 2014 11:45

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