South African Lease Agreements: What Landlords and Tenants Need to Know

Signing a lease is a big deal. Whether you are renting a home, flat, townhouse or other residential property, both the landlord and tenant have rights — and responsibilities.

In South Africa, residential rentals are mainly governed by the Rental Housing Act 50 of 1999, the common law of contract and, in certain circumstances, the Consumer Protection Act 68 of 2008 (CPA).

Remember, a lease cannot simply override rights the law protects.

But there is also a common misconception worth clearing up: a residential lease is not automatically invalid just because it was agreed verbally. A lease can be verbal and legally binding. However, a tenant can require the landlord to put the agreement in writing, and having a written lease is strongly recommended because it gives both sides a clear record of what was agreed.

Here are some of the key things landlords and tenants should know.

1. Rent: Know What You Are Paying and When

Your lease should clearly state:

Paying by EFT is often sensible because you have a record of payment.

If you pay your rent, keep proof. A tenant is entitled to a receipt for rental payments where one is required under the Rental Housing Act.

What about rent increases?

There is no single percentage that every landlord may legally increase rent by.

The answer normally depends on what the lease says. If the lease provides for an escalation, that provision is important. If the agreement does not specify when or by how much the rent may increase, the parties may need to negotiate the increase.

An unreasonable or unfair rental practice can be challenged through the appropriate dispute-resolution process.

What about late-payment charges?

A landlord cannot simply add any penalty they like because rent was paid late.

The applicable rental regulations restrict penalties for late payment and provide for interest rather than an arbitrary penalty. The actual terms of the lease and applicable law should therefore be checked before a landlord charges additional amounts.

2. The Rental Deposit: Your Money Still Matters

A landlord may require a security deposit, provided this is properly dealt with in the rental agreement.

Where a deposit is paid, the Rental Housing Act provides important protections.

Generally, the landlord must invest the deposit in an interest-bearing account with a financial institution, and the tenant is entitled to the interest earned, subject to the rules applicable to the rental and any qualifying deductions.

Inspect the property before moving in

The landlord and tenant should conduct a joint inspection before the tenant moves in.

Existing defects should be recorded in writing and attached to the lease. This is extremely important because it helps establish what damage was already there.

When the tenant moves out, another inspection should be carried out and the condition of the property compared with the original inspection record.

A landlord can generally use the deposit to cover qualifying damage caused by the tenant, excluding fair wear and tear, as well as other amounts the tenant is legally liable for under the lease.

However, the landlord should be able to account for deductions and provide receipts for repairs paid from the deposit where required.

When must the deposit be returned?

The Rental Housing Act provides specific time periods for returning the deposit and interest, depending on whether there are deductions and whether the tenant participates in the outgoing inspection.

Where there are no amounts owing or damages to deduct, the deposit and interest must generally be returned within 7 days after the lease ends.

Where lawful deductions are made for repairs, the balance must generally be returned within 14 days after the restoration of the dwelling.

There is also a 21-day period in circumstances where the tenant fails to attend the outgoing inspection after being properly requested to do so.

3. Can a Tenant Cancel a Fixed-Term Lease Early?

This is where things can get confusing.

If a tenant simply wants to leave a fixed-term lease early, they cannot automatically assume they can walk away without consequences.

However, where the Consumer Protection Act applies, section 14 gives a consumer the right to cancel a fixed-term agreement by giving the supplier 20 business days’ written notice.

That does not necessarily mean the tenant can leave without paying anything.

The supplier may impose a reasonable cancellation penalty, taking the circumstances and reasonable costs of the cancellation into account. The purpose is not to punish the tenant or automatically make them pay all the remaining rent for the lease.

Importantly, the CPA does not automatically apply to every landlord and every residential lease. Whether it applies depends on the circumstances and the parties involved.

So before cancelling a fixed-term lease, check the lease agreement and the applicable legislation rather than simply assuming that the “20-day rule” applies.

4. Water, Electricity and Other Services

Your lease should clearly explain who is responsible for:

Do not assume that every landlord can simply add whatever amount they want to a municipal bill.

The Rental Housing regulations contain rules governing charges for services, including separately metered services and certain service charges in multi-tenant properties.

If you are unsure whether the amount being charged is correct, ask for the relevant account, meter reading or calculation and check the lease and applicable municipal arrangements.

5. Who Is Responsible for Repairs?

This is one of the areas where people often assume there is a simple “landlord fixes everything” rule.

It is not quite that straightforward.

The lease should clearly set out the respective maintenance responsibilities of the landlord and tenant.

As a general rule, landlords are responsible for maintaining the property in accordance with their legal and contractual obligations, while tenants must look after the property and are generally responsible for damage they cause.

Routine matters may also be allocated to the tenant by agreement — for example, certain garden maintenance or replacing ordinary consumables.

The important point is this:

Read the maintenance clause before signing the lease.

If the landlord has agreed to maintain a particular part of the property, that agreement matters. The Western Cape Government also advises tenants to check what the lease says about maintenance.

6. Your Right to Privacy

A landlord owns the property, but that does not mean they can simply walk into your home whenever they feel like it.

Tenants have a right to privacy and peaceful occupation.

A landlord may have a right to enter the property for legitimate reasons such as inspections, maintenance or repairs, but reasonable notice should generally be given and arrangements made with the tenant.

The Rental Housing Act specifically protects the tenant’s right to privacy.

7. What About Pets?

Whether you may keep a pet should be checked before signing the lease.

The lease may contain conditions relating to pets.

And if the property is in a sectional-title scheme, estate or other development with applicable rules, those rules may also affect whether pets are permitted and under what conditions.

Never assume that “pets allowed” in a conversation automatically overrides applicable scheme rules.

Get it in writing.

8. Can You Sublet or Put the Property on Airbnb?

Do not assume that renting a property automatically gives you the right to rent it out to someone else.

Subletting, short-term letting and platforms such as Airbnb may be restricted by the lease, applicable scheme or estate rules, or other applicable legal requirements.

If you want to sublet or use the property for short-term accommodation, check the lease and relevant rules first and obtain the required consent where necessary.

9. What Happens When There Is a Dispute?

You do not necessarily have to head straight to court when a landlord and tenant disagree.

South Africa has Rental Housing Tribunals established under the Rental Housing Act to deal with disputes between landlords and tenants.

The service is intended to provide an accessible dispute-resolution mechanism and, in the Western Cape, the Rental Housing Tribunal is available free of charge to landlords and tenants.

Disputes can include issues such as:

Tribunal proceedings and powers are governed by the Rental Housing Act and applicable regulations. A Tribunal ruling can, in specified circumstances, have the status of an order of a Magistrates’ Court. It is therefore important not to ignore Tribunal proceedings or orders.

10. Never Take the Law Into Your Own Hands

If a tenant stops paying rent, a landlord cannot simply lock the tenant out or remove the tenant’s possessions because they are angry.

Likewise, a tenant cannot simply stop paying rent because they believe the landlord has breached the lease.

Both parties need to follow the proper legal process.

For example, a landlord seeking to evict a tenant must follow the applicable eviction law and obtain the required court order. A tenant who believes the landlord has breached their obligations should use the remedies available under the lease and applicable law.

The Bottom Line

A good lease protects both sides.

Before signing, make sure you understand:

And remember: don’t rely on a handshake when thousands of rands are involved.

Even though a verbal lease can be legally binding, putting the agreement in writing gives both landlord and tenant a much clearer record of their rights and obligations.

If you are unsure about a clause in a lease, or you believe your landlord or tenant is acting unlawfully, get proper legal advice before taking action. Contact us today; we can help you draft or review a lease agreement that addresses your specific needs and protects your interests.

By carefully considering these factors, you can create a lease agreement that provides a clear framework for your rental arrangement.