PROPERTY MANAGEMENT
Why is the lease agreement important?
By Turnie Morolong
A lease is an agreement, written or
unwritten, between a landlord and a
tenant, transferring the right to exclusive
possession and use of real property for
a definite period of time. The landlord
grants the right of possession to the
tenant but retains the right to take
possession after the lease term has
expired. The lease sets forth the rights
and responsibilities of both the landlord
and the tenant. A lease is binding in the
legal sense with respect to commitments
given by the signatories.
The main purpose for drawing a lease agreement is to guarantee both
the landlord and the tenant security of tenure. The landlord is assured
occupancy and income for the period of the lease and therefore, preventing
any loss in income due to sudden vacancy. The tenant on the other hand is
assured to have possession of the premises for the length of the lease.
A lease agreement also serves to do away with misunderstanding
that may arise between the landlord and the tenant; to this effect the
provisions of the lease must clearly be understood by both parties. It
follows therefore that a property manager should not adopt a lease form
just because it is popular but should use a lease form that is reasonable,
relevant and suitable for the property and/or premises in question.
THE REQUIREMENTS FOR A VALID LEASE ARE
GENERALLY AS FOLLOWS:
Capacity to contract
The parties must be legally capable of entering into a contract.
Description of premises
A description of the leased premises should be clearly stated and
include street address and/or apartment number for residential
properties, floor plan, size, parking, storage areas and the like for
commercial properties. If the lease affects land, as with ground lease, a
legal description should be used.
Term of lease
The term of lease is the period the lease will run and should be stated
preferably with the beginning and ending term dates stated together
with a statement of the total period of the lease.
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Rental
For a lease to be enforceable, the rental to be paid must be determined or
determinable. Rent is construed as being any consideration that supports the
lease, not limiting its definition to the monthly payment of a specified amount.
In addition to the payment of rent, most long-term leases require that the tenant
pays other property charges such as water, refuse collection, common area
cleaning and security, landscaping and common area electricity.
Legal objectives
The lease objectives must be legal. In Botswana, it would generally be
illegal to lease a building to operate a brothel, so a lease for such a
purpose would be invalid.
Things to look out for in a lease agreement:
• Make sure you know how long your lease is. If you only plan on
staying in your new apartment or house for a year, make sure you
aren’t signing a two-year lease.
• What bills are you responsible for? Are you responsible for paying
your electricity and water bills? What about refuse collection?
• When is rent due? Make sure you know when and where you
need to pay your rent, as well as any late fees you may incur if for
some reason your rent is late.
• Can you sublease? With some leases you are able to sublease
your premises to someone else for an allocated amount of time.
• What are your rights? Many tenants do not know their rights and
they are abused by their landlords.
In conclusion, although many leases are similar, there’s no such thing as a
standard lease provided or approved by any public agency or court. Lease
agreements differ from landlord to landlord. Therefore, it is very important to
read the lease carefully before signing it. As mentioned earlier, the lease is a
legal document which defines the relationship between the landlord and the
tenant. Both parties will be held to the language of the lease.
ISSUE 36 - DECEMBER 2018