5
Just Letting
tips
for creating an excellent
lease agreement
What to do when creating a lease agreement
A
lease agreement is the basic grounding for
the largest monthly transaction that a tenant
will make and, it is critical to the smooth
running of any tenant-landlord relationship that the
lease is properly constructed and legally correct.
1. No modifications outside of the lease
It is always best practise to ensure that the lease
is clear that no additions or modifications to the
agreement can be made outside of the lease.
Landlords can insist that any deviation from the
terms must be agreed upon by all parties in writing
- otherwise you end up in a situation where ad-hoc
changes are made verbally which bind all parties.
2. Leases are subject to national legislation
A landlord cannot put in the lease that should the
tenant not pay, the water can be cut off, or the doors
can be removed. Even if the tenant signs such a lease
it remains illegal for the landlord to do these things as
they go against the basic principles established in the
Rental Housing Act.
3. Do not underestimate the Consumer
Protection Act
According to the Consumer Protection Act. (CPA),
consumers can cancel a lease agreement with 20
business days notice. The landlord can, however,
specify a reasonable penalty should the tenant cancel
the lease before the end of its term, but the landlord
needs to show that the penalty is reasonable. Make
sure that any lease has a section that deals with
CPA cancellation, specifying how the penalty will
be calculated, as well as what the minimum and
maximum values of such a penalty will be.
4. ‘Cooling off period’
Another interesting cancellation right to be made
aware of is the consumers right to a penalty free
cancellation, within five days of signing a lease, if
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Issue 7 2015
the agreement was the result of dir X