 Good morning everybody. I am very excited to share this session with you where we're going to be discussing lease agreements Specifically the do's and don'ts because the truth about a lease agreement is if you do not have the correct Information and detail in your lease agreement with the correct clauses Giving the landlord as well as the tenant the necessary protection in the lease agreement You will definitely run into a few problems and we are going to avoid that by using the correct documentation When we do lease agreements, so I am still no stain I'm the Managing Director of SSL are incorporated. We're a firm dedicated to property law And I am honored to to do this talk and to give you some more information on lease agreements So I also want to thank private property again for inviting me to host this session So let's get straight into it Usually when it comes to a lease agreement the question is What is important? Can I use my own lease agreement? Can I buy a lease agreement from CNA? Can I download a lease agreement from the internet? What is safe and what is going to give me the necessary protection when it comes to lease agreements? so first of all We need to appreciate that the South African legal system is A separate system from any other legal system in the world because every country has its own legal system So one of the biggest things that I find To be a very big problem when it comes to lease agreements is if you hop on to the internet and you Google Lease agreements you definitely going to be able to download a bunch of lease agreements, but it could very well be Lease agreements drafted by an attorney in a completely different country. So say for instance you end up with a lease agreement based on The English legal system the content of that lease agreement will be Completely irrelevant to what you are doing and it will not just be Not helpful. It will actually be Prejudicial to what you are doing and this is something very important to keep in mind When we deal with lease agreements the most important thing is to appreciate that This is not a document that can quickly be drafted on a back of a cigarette box At least we're now in level one so I can make cigarette box jokes again But it's very important to appreciate the fact that This is a very specific legal document and if you as the landlord Want to use a lease agreement? You need to appreciate that this is the document and that gives you a right of Occupation away to a third party you need to protect yourself and your investment in every potential aspect of a rental to the point where you don't have to go back at a later stage to Mean something or change something. It's really important to be aware of this So first off must the lease agreement be in writing or can it be a verbal agreement? At this stage in terms of the rental housing act a residential lease agreement may be Verbal or if the tenant request that it must be in writing it has to be in writing Commercial agreements are not regulated by the rental housing act So even if the tenant requests it to be in writing, there's no legislation Allowing the tenant forcing the tenant Forcing the landlord to have the lease agreement in writing so having said this It's important to be aware of the fact that the rental housing amendment app Which has not been promulgated yet and I cannot see and that it will be promulgated in its current form However, anything is possible But the rental housing amendment act which was published already in November 2015 still not promulgated to this day. Yes It's been a good five years So that piece of legislation does require lease agreements to be in writing, but why Do we currently do lease agreements in writing if it can be verbal agreements? Well, that makes a lot of sense to do it in writing because I Don't know about you, but I can barely remember what I had for breakfast So imagine a year from entering into a lease agreement of verbal lease agreement You suddenly in a position where you have to recall the exact Provisions of the lease agreement that you agree to verbally with the tenant the problem is Even if you can remember and even if the tenant can remember what the content of the verbal agreement was The way we prove that in court is on oral evidence That means somebody gets into the witness stand and you can cross-examine him to get to the actual content of the lease agreement why this is not advisable is If we have to do an eviction Which in fairness is what we are all concerned about when we do rentals. If we have to do an eviction We want to bring an eviction on application So now I'm going to bore you a little with civil procedure law Because we have two options in South African law when we initiate court proceedings on the one end We can go on action, which means we commence the proceedings with a summons Or we can go on application, which means we commence the proceedings on a notice of motion with a founding affidavit if you have a factual dispute or if you are in a In a situation where you have to prove the terms of the lease agreement Verbally the only option is to bring it on oral evidence and that will mean that we have to go on trial So why is this a problem? On motion on application we can be in court with an eviction in anything between two to three months or sometimes shorter but currently With the lockdown regulations we are still a little limited and the roles court rolls are still very contested So if that is the situation, but we have to go on trial We're only going to be in court in about a year or two from now So if you have your lease agreement in writing and complete with all the parties know exactly what they've agreed to We can go on application and your eviction process will be much much quicker. This is why we have it in writing also If there's a dispute when it comes to any any contract any agreement There's a rule of interpretation that says The contract must be interpreted against the party Responsible for the drafting so even if it's in writing But you do not may have the necessary provisions with regards to interpretation of that particular contract You can run into very very severe problems for instance A landlord that does something a little creative or funny Whatever you want to want to call it. It could very well have the effect that that contract is Interpreted against the landlord and in favor of the tenant and why I'm saying this is remember the landlord in a lease agreement will always be the party representing the terms of the Agreement to the tenant and the tenant can then accept those terms or Reject those terms and that is when the agreement comes into being so it's very important So I used a lot of time to explain Why we need to have our lease agreements in writing and this is something crucial please keep that in mind and don't try and do Verbal agreement because it does become very difficult to prove the terms of that contract but let's get into a few important things And then I'm going to break it down into a few takeaway points on do's and don'ts, but for the moment The easiest way and the best way of Dealing with a lease agreement is to get a lease agreement that is used By as many as possible users in the country I am honored and privileged to be the drafting attorney of the TPN lease back residential lease I've been responsible for the drafting center for the past six years and I'm very excited to see how many users we currently have at this stage the majority of South African lease agreements written lease agreements are actually used Does use the either the unamended form of the lease back or at least a similar or older version of this lease agreement Why this is relevant is One of the bigger problems with rentals is that neither landlord nor tenant Understands the actual intricate terms of lease agreements So what happens is if we have a standardized document Suddenly people get comfortable imagine for a moment You are a tenant and you renting the property through an agency and They're using a document that is based on the TPN lease back But then for the next term you're renting a property directly from a landlord But the document even though the branding on the document isn't with the agency that you used previously The content of the document is exactly the same or at least very closely similar You're comfortable with the content and the terms of this agreement, but even more importantly judges and magistrates Has to read the full content of an agreement if There's an agreement that forms the basis of a dispute or some or the other form of action for instance in eviction And if that is the case quickly imagine a judge with 60 matters on the roll in front of him for the day of which let's say seven is evictions a Residential a residential lease agreement if you really shrink it down as little as you can is a 12 to 15 page document The truth is you want a residential lease agreement to be more in the in the region of about 17 to 20 pages Then I know you've you've covered a lot of it, but if a judge has to read Seven 12 to 15 page documents with all respect To all our judges these physically not enough time to read it in that much detail So what we're seeing is more and more judges and magistrates are asking us when we bring eviction applications If the lease agreement is based on the TV in these back, this is absolutely fantastic because this means when a judge has standardized documents in front of him the Interpretation of those contracts in the actual decision on an eviction or a rental claim or whatever the dispute is is obviously much quicker and much easier My drive for standardization in the industry is something that I've been passionate about for a very long time and I'm very excited to see We're getting to a point of standardization in lease agreements across national agencies and across landlords and That does their own Management and their own rentals. So you're more than welcome to have a look at that. We are hosting our stand For this particular show with TV in so you are welcome to visit us and have a look at what we are offering For the industry in that in that sense Which will also make it much easier for you if you visit our YouTube channel SSLR's YouTube channel you will see that I whenever I do training whenever I record a video I will always refer to the clauses in the lease back that is relevant So it makes it easier for everybody and the truth is I'll share this little secret with you Actually, it's just so I can do one training session and I cover all the landlords and agents in one go by using the same lease Agreements. I'm not saying my standardization is because I don't want to do multiple training I just honestly do believe that that is the best for the for the rental industry specifically So let's get into a few do's and don'ts I'm gonna start with the don'ts because I love scaring people and then I leave you on a happy note. So The don'ts very important Ambiguity is the worst way word that you will ever use when it comes to agreements Ambiguity is when there are contradictions for instance in a contract. So in the one point you deal with Subleasing and then the next moment and you say subleasing is not allowed and the next moment. There's another clause saying that Should you have a subtenant the tenant will be responsible for the eviction of the delinquent subtenant that Courses ambiguity and the beauty is easy definition is that moment when you read something in a contract and you think, huh? This doesn't make sense. That is how you know something is ambiguous Why is this a problem? If you do not have proper interpretation clauses for instance a severability clause which says if there's any dispute between Specific clauses you can read some of them as if they aren't in the contract while the rest of the clauses still stand If you do not have a clause like that The problem that you're running into is at some stage a judge can't make a decision on what the true intention of the parties were What I'm saying this is the moment you start amending a document for instance the lease back You will run into a situation where You might not understand why there was a specific clause written into the agreement and it could very well make the Entire agreement in illegal or at least Unenforceable in certain aspects. It's very important to keep this in mind something else. That's very important is Not to include Illegal provisions. So what am I talking about? I have seen lease agreements that made me so so sad that those things for instance say and The provisions of the Prevention of Illegal Evictions Act will not apply to this tenant now That's illegal. We do not have the right to contract out of legislation It's very important to keep this in mind to do something like say the CPA won't apply to this contract where it does Suddenly it leaves both parties in a situation where they have no idea what's going on does it apply does it not apply We can't contract out of legislation. It's very important. No illegal provisions It places the entire enforceability of the contract at risk Then at the same time it's very risky to draft specific provisions of legislation into a contract Why am I saying this say for instance you quote and provisions of section 14 of the Consumer Protection Act into your lease agreement and that Act gets amended it will mean that these provisions Written into your contract that might be burdensome on the landlord or the tenant that was a legal Requirement at some stage, but now it got amended and your contract won't amend with that when we deal with Legislation in contracts we do it in a way that we don't basically copy and paste legislation into the contract You make reference to it in a way that Will amend should be legislation amend as well very important Then the last scary one and I promise this is the last one I'll scare you with is Your method of service. I still see contracts to this day that requires Notices to be delivered by registered mail There's no requirement in our law to have any notice delivered by registered mail When it comes to to lease agreements, so for instance, we don't have to send a letter of demand before we Cancell the tenant to a victim We don't have to send that by registered mail unless you specifically ask for that in the lease agreement if the lease agreement says Notice must be given By registered mail then it must so why do we are burden ourselves with stuff like this? You are more than welcome to insert a provision that says any notices can be delivered by email and then deemed to be received on the day of this but and never do funny things on that like and write something in to say on Receipt of a read receipt it will be deemed delivered because that is in the receiver's hand So why would you do something like that? Keep it simple and Make sure that your notices can be delivered in a simple effective manner Let's get to the dues and I'll be relatively quick on this one The Consumer Protection Act is a very important piece of legislation. You are welcome to visit Our standard SSL R and TPN stand. I have a specific flowchart which you can download in PDF That will show you when the CPA will apply to a lease agreement or not So I'll keep it very simple and that's why I don't have to explain it because I've drafted something for you I drew a nice little picture So if the Consumer Protection Act does apply to your lease agreement There are very specific elements that's relevant for instance You need to give the 10 and 20 business days before you can cancel the agreement If he is in breach of a provision of the agreement and there's a lot of other things that becomes relevant When the CPA applies and the only thing that you need to know is whether it applies to your lease agreement or not and if it does make sure that you have a look over a Section 14 of the CPA and you really know that your lease agreement does Incorporate all those provisions so you are sure that you do comply with the provisions of that particular piece of legislation then The only other one that I do think is very important is a lease agreement must cater for any Circumstance and I don't think there's ever been a better time to realize this than during COVID The moment COVID hit I was very very very pleased to look over the TPN lease back and realize We don't have to amend anything in the contract to make provisions for a situation like a state of disaster that we honestly never saw coming You need to cater for situations like natural disasters like a state of disaster without calling it something specific Unfortunately, I've seen a lot of lease agreements currently specifically trying to deal with something like Lockdowns and things like that. It's irrelevant and now suddenly you could very well exclude a future Circumstance that we might not be aware of yet. I'm not jinxing it. I'm just saying a lease agreement must be something that is very Standard and that can apply in absolutely any circumstance the moment you need to cater for something overly specific be careful about that be careful because If that circumstance doesn't occur What are you not catering for? Because you are overing over catering for something specific It has to be open enough to cater for absolutely any eventuality that might occur during the subsistence of the lease agreement now the trees about lease agreements is There are so much and if I have to tell you everything About the deuce and the don'ts in lease agreements I don't think I'll be able to just do that in 20 minutes. I won't even be able to do that in three days So what I do suggest is if you have any further questions You're more than welcome to ask now if you Want to have a direct specific conversation you more than welcome to visit the SSLR and TP in stand There are quite a few of our attorneys as well as TP in Legal advices available at the stand to deal with any question that you might have with regards to lease agreements I wish you all the best and happy renting