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Sudden rental hikes spike anger

Written for YourProperty

This week the Property Poser panel deals with two similar questions regarding sudden rental hikes.

In the first instance, the reader and his family reside in his brother's granny flat and have done so for years. His brother, the landlord, has just recently presented him with a lease agreement to sign.

The lease contains a not insubstantial 40 per cent increase together with a 10 per cent annual increase thereafter. Should he fail to sign the agreement, the landlord has advised that the reader will have one month to vacate the property.

In the second matter, the landlord's daughter has taken over the running of his affairs. She contacted the reader to advise that she would be increasing the monthly rental on the reader's flat by 25 per cent.

The notification was issued a mere three days before the rental was due to be paid, therefore the reader inferred that the increase would apply from that date and he questions whether this is permitted.

With regard to the first issue, there are a number of considerations, says Schalk van der Merwe from Rawson Properties in Somerset West, Cape Town.

"The current and verbal lease may have a specified term to it, despite not having been recorded in writing."

If this is the case, any deviation from the agreed term could be a breach of contract, says Van der Merwe.

"However, it's quite common for a lease of this type to merely operate on a month-to-month basis and a month's notice would generally be appropriate."

Van der Merwe says the pressure placed on the reader is not a physical duress but could be justified as a commercial tactic for negotiating an increase in rental.

"Perhaps the rental was historically low as a way for the landlord brother to assist his tenant brother financially.

The reader's circumstances may have improved since then, or the financial circumstances of his brother may have deteriorated, necessitating the increase, says Van der Merwe.

"Family relationships often complicate matters and assumptions are made or shortcuts are taken, sometimes leading to unnecessarily prickly legal situations."

Van der Merwe says the reader could seek the intervention of his provincial Rental Housing Tribunal, should the facts of the case point towards unfair practice.

As far as the second matter is concerned, the terms of the agreement are also not known, says Grant Hill of Miller Bosman Le Roux Attorneys in Somerset West.

"We don't know whether a lease agreement is in place but, if there is, the reader should check the terms of the agreement regarding the rental and any possible increases."

Hill says it should be noted that rental is usually paid in advance so the proposed rental increase should apply to the following month and not retrospectively.

"A period of notice should generally be reasonable, depending on the circumstances."

If the lease is not governed by a written contract, says Hill, it generally operates on a month-to-month basis and a notice period of one month would probably be regarded as reasonable.

"Depending on the circumstances, a shorter period may also be justifiable."

Hill says the reader should approach the daughter representing the landlord and see whether there is scope to discuss the matter and alter the date of implementation of the increase.

"Should she not succeed, she could make use of the remedies under the Act and possibly refer her case to the Tribunal."

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