Can you negotiate your rental amount upon renewal?

With many residential property leases coming up for renewals, PG van der Linde, rentals manager for Seeff Pretoria East, highlights the unusual economic circumstances this year due to the Covid-19 pandemic.

It has been challenging for landlords and tenants alike. While some tenants may find it tricky to renew their leases, those who acted with integrity are likely to find landlords willing to renew their lease and possibly even on better terms.

Many tenants may find that the landlord will look to conduct renewal credit checks to confirm the tenant’s affordability and do a renewal inspection and tenants should be prepared for this.

Craig Watchurst, a rental agent with Seeff City Bowl said lease agreements often make provision for a renewal which must be exercised within a particular timeframe. If the tenant fails to exercise the option timeously but is a good tenant, the landlord will often have no issues with renewing, but this is not a given right.

“To be safe, if the tenant has not heard from the landlord regarding the renewal, he should indicate what he intends to do at least one month prior to the expiration of the lease. If no renewal option or agreement is reached, the lease will simply terminate, and the tenant will need to vacate by 12pm,” Watchurst said.

Affordability is vital when renegotiating your lease this year

It is important to ensure the new rental is affordable and the increased percentage reasonable given the current economic climate, said Jo Giraudeau, rentals and operations manager for Seeff South Coast.

“If there is a renewal clause in the original lease, then the lease must generally be on the same terms except for the monthly rental which could possibly change, but must be agreed upon by the landlord prior to the option of renewal being given to the tenant.

“Failing this, the landlord can change the terms and if these are not acceptable, the tenant has every right to give his/her notice to vacate at the end of  the original lease period.”

Barbra-Ann Briner and Vivien Adler, rentals agents with Seeff Atlantic Seaboard pointed out that even if there is a stipulated escalation percentage, it is still possible to negotiate the rental amount. If the landlord is not amenable, the tenant would need to decide whether to accept the new rental or move.

“Our advice to a landlord would be that if it is a good tenant, they should look at how they can be accommodating in the current pandemic-climate,” Adler said.

Can you deal with the agent who placed you in the premises, or must you deal directly with the landlord?

The agents said that it is to the advantage of a tenant to have an agent negotiate on their behalf as they have all the tools on hand to motivate a lower rate and the experience to deal with individual personalities.

“If it is an unmanaged rental, you can deal directly with the landlord or renew with the agency for the further period on an unmanaged basis using the agency’s assistance to conduct inspections and other admin options provided.”

Does the landlord need to give you a new lease agreement for the new term of the lease?

Van der Linde said it is important that there is a written agreement which can either be by way of an addendum to the original lease or a new lease agreement. Ensure the agreement reflects everything that was agreed with the landlord.

A further benefit of dealing with a rental agent, he says, is that they usually have up to date rental contracts in place which are legally compliant.

“If there is no provision made for the period for which the lease must be renewed, then the landlord and tenant need to come to an agreement. If the period proposed is not suitable to the tenant, once again it may then be in the tenant’s best interest to give notice to not renew his/her lease agreement period and vacate when the term reaches its end,” the property expert said.

Read: South Africa’s rental market is crashing – here’s what people are paying right now

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Can you negotiate your rental amount upon renewal?