Managing and leasing property can be a lucrative investment – one that’s also fraught with challenges. Nurturing a relationship between the body corporate, managing agent, landlord and tenants take some wherewithal. It’s a no brainer then that your tenant contract is by and large, one of the most important documents involved in owning or managing a property. Without the proper safeguards and legalities in place, you could find yourself smack bang in the middle of some very unpleasant relations.

First things first: make sure all parties are aware of the terms stated in the tenant contract.

A lease agreement, or tenant contract is a legal agreement, put in place to ensure that the letting of the property is conducted in a lawful manner, in a way that protects both lesser and lessee. In order to avoid any miscommunications (which often turn nasty, costly, or both), make sure that both parties are familiar and aware with the lease terms from the get-go. While tenant contracts can be either written or verbal – having a hard copy of a contract is preferable; this safeguards against the stressful “he said, she said” argument that often arises when a verbal agreement is breached. Protecting yourself and your tenants hinges on including the following terms in your tenant contract:

1. Names of tenants

All adults occupying the property must be named in the lease agreement. This deems them legally responsible for all terms included in the contract. Many landlords make the mistake of including only one tenant (in the case of a property being leased by two or more individuals) in the tenant contract. Failing to include all tenants on the property is potentially dangerous, because if an ‘un-named’ tenant damages or neglects the property, they won’t be able to be held legally liable.
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2. Limits of occupancy

It’s crucial that your tenant contact explicitly states exactly how many people may occupy the property. Many a problem can arise when a property that’s initially been leased to one individual sees two or more additional tenants move in. This scenario is commonplace, which means that the inclusion of this stipulation is crucial – especially if you’re managing the property remotely, and are unable to keep tabs on your tenants.

3. Rent terms and conditions

It should go without saying that the amount of rent due, as well as the date it’d due, are non-negotiable inclusions in a tenant contract. It’s also advisable to detail how this money should be paid, as well as the terms that apply to late or non-payments. These are at your own discretion – you may want to grant your tenant a grace period, or charge them interest on late payments.

4. Deposit terms and conditions

It’s essential that a deposit is paid up front, in order to ensure that if any damage is incurred to the property, there are funds available to cover the cost of repairs. Make sure to include a clause detailing how the deposit will be used if damage or neglect is incurred. As with rent, the amount of a deposit is at your own discretion; this is usually between one or two months’ rent, and is dependent on both the tenant’s credit profile, as well as the condition and value of the property. Note that the tenant may not request that the deposit be used as rent during any time during the lease. Bear in mind that a landlord or property owner is required – by law – to keep the deposit in an interest-bearing account.
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5. Maintenance and repairs

As far as maintaining the property is concerned, your tenant contract should clearly state the responsibilities of both the lessor and the lessee. All tenants are required to keep a property in a clean and hygienic state, and are liable for any damage incurred as a result of their abuse or neglect. Should any defect or problem arise, the onus is on the tenant to alert you as to the problem. The procedures that should be followed should the geyser burst, for example, must also be stipulated within the lease agreement. In addition, restrictions to the alterations to the property by the tenant, such as painting of the walls or the installation of burglar bars, must be included.

6. Restrictions on activity

In order to ensure that you have peace of mind as to the goings-on on your property, it’s essential that you stipulate the fact that excessive noise, illegal activity such as the consumption or dealing of drugs, and the sub-letting of your property is forbidden. It’s advisable to include a clause stating that the failure to adhere to these restrictions will result in immediate eviction, as well as the forfeiting of the tenant’s deposit.

7. Pets

Lastly, your tenant contract should stipulate whether pets are allowed to be kept on the property, the number of pets a tenant may keep, as well as the responsibilities of the tenant if a pet is kept. Besides having a tenant contract, it’s advisable to make use of a professional pest control and cleaning company who’ll be able to assist with any pest control or cleaning needs. Find out about our residential and commercial property services here.
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