This week, the Property Poser experts grapple with an interesting question from a tenant regarding the merits of a verbal lease contract over one in which the terms are reduced to writing.
According to Grant Berndt from Abdo & Abdo Attorneys in East London, South African law recognises both written and oral agreements.
“In order for an agreement to be concluded, all parties should be clear with regard to its terms.”
In the instance of a lease, issues such as the rental payable and preferably the duration of the contract should be addressed and agreed upon, says Berndt.
“Our law also imputes a number of so-called residual rules. These are essentially common law provisions that have developed over time and apply where the parties have not specified their own terms.”
Berndt says these rules are not necessarily known to laymen and there may be provisions applicable to them or a situation that arises which the parties would have preferred to address contractually.
“The problem with not having a written lease agreement arises when the specific terms of one of the provisions are under dispute. Each party holds a differing view as to what they agreed upon at the outset but proving it becomes difficult.”
The burden of proof typically rests on the alleging party and he or she may be hard-pressed to render satisfactory proof of agreement regarding the problematic provision, says Berndt.
Under the Rental Housing Act, a tenant may request a landlord to reduce certain provisions to writing, says Brian Kinnear, principal of Fresh Lifestyle Properties in East London.
“This should be done sooner rather than later as the chance of dispute may well increase further into the lease period.”
While other legislation also applies to problems like eviction, Kinnear says questions such as the duration of the lease may be too risky to leave verbal or unaddressed.
“Without confirmation of the lease period, a landlord may assert that it is month to month or for a period shorter than was actually agreed upon. Again, proof of a contrary provision becomes an issue.”
Kinnear says there are many instances, depending on the factual scenario, where having or not having, as the case may be, certain provisions in writing might assist one or the other party.
“In many instances, reducing agreed terms to writing assists in dispute resolution. People are often more inclined to gloss over the more involved aspects of a lease agreement as a result of time pressure or other pressing circumstances, thus setting the scene for a dispute to arise.”
On balance, a reasoned and agreed lease may provide both parties with greater peace of mind due to the clarity established with regard to their rights and obligations and to their continued relationship, says Kinnear.
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