Verbal property leases to be phased out

This is an interesting headline because:

1. The commercial property industry is (generally) highly professional and already only uses written leases.

2. In general, those involved in the buy-to-let market already rely on written agreements.

3. We are then dealing with the vast masses of people who let out rooms and shacks in the backyards of townships and informal settlements.  These people do not generally have the capacity to pursue a rental claim through formal structures (Tribunals or Courts) and therefore it is irrelevant whether the lease is oral or written.

Gareth Shepperson
Commercial and Property Attorney

Verbal property leases to be phased out

A lease can be oral (verbal), in writing or a combination of both, i.e. partly written and partly oral.

In the case of a residential lease, if the tenant asks for a written lease, the landlord must reduce the oral lease to writing, but on the same terms and conditions as the oral lease.

The provisions pertaining to leases under section 5 of the Rental Housing Act 50 of 1999 reads:

  • 1 A lease between a tenant and a landlord, subject to subsection (2), need not be in writing or be subject to the provisions of the Formalities in Respect of Leases of Land Act, 1969 (Act No 18 of 1969).
  • 2 A landlord must, if requested by a tenant, reduce the lease to writing.

    The act does not give the same right to the landlord, so a request to the tenant to reduce the oral lease to writing can be ignored, since this would not be considered an unfair practice.

    As for writing down the terms of the oral lease, it is important to note that parties are merely recording the original conditions agreed on.

    There may be instances where parties agree that for the lease to be binding, a written lease contract must be signed.

    Oral leases have been around for centuries and become part of the South African common law and the law of contract. This is to change shortly. The proposed changes to the Rental Housing Act as amended in 2007 will change the way landlords and tenants conclude residential leases.

    The Rental Housing Amendment Bill is one of the priority bills presently before Parliament.

    In other words, it must be passed into law before the general elections in May, when Parliament's five-year term ends.

    The proposed bill seeks to amend section 5 of the act by substituting it with several changes:
  • 1 The onus is on the landlord to ensure that the lease is in writing. The landlord must reduce the lease entered into between himself or herself and the tenant to writing provided that the lease will not be subject to the provisions of the Formalities in Respect of Leases of Land Act, 1969 (Act No 18 of 1969).
  • 2 The lease will be enforceable in a tribunal or competent court. No oral leases will be valid.
  • 3 The Minister of Human Settlements must develop a proforma lease agreement in all 11 official languages, containing the minimum requirements set out in the act, which may be used as a guideline by tenants and landlords.

    Overall, the bill, according to its preamble, seeks to amend the Rental Housing Act, 1999, so as to:
  • Substitute and insert certain definitions.
  • Set out the rights and obligations of tenants and landlords in a coherent manner.
  • Require leases to be in writing; to extend the application of chapter 4 to all provinces.
  • Require MECs to establish Rental Housing Tribunals.
  • Extend the powers of the Rental Housing Tribunals.
  • Provide for an appeal process.
  • Require all local municipalities to have Rental Housing Information Offices.
  • Provide for norms and standards related to rental housing; to extend offences.
  • Provide for matters connected therewith.

    Dr Sayed Iqbal Mohamed
    Chairman, Organisation of Civic Rights
    Tenant Issues
    Daily News
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