PROPERTY MANAGEMENT
Rent Increases -
How to get your landlord to be resonable.
BY WESLEY BARNARD
U
nfortunately, as with most things in life,
rent goes up each year - but does this mean
that tenants have no choice but to expect
whatever percentage the landlord decides one?
“As a letting agent with much of my portfolio
coming up for renewal over the summer months, it
is always interesting dealing with the expectations of
both tenants and landlords and helping them meet in
the middle,” says Grant Rea, Rental Specialist at RE/
MAX Living. “In Cape Town where rentals are at a
premium, the escalation of rent at the anniversary of
the lease can seriously impact the tenant’s budget for
the next year. This is compounded further by the lack
of available long-term rentals during the season.”
Rea adds that as an agent for numerous landlords,
he has some criteria for how to decide, firstly whether
to agree to a renewal with a tenant and secondly what
escalation will apply. According to Rea, it is unlikely
that the lease will be renewed with a tenant who has:
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Been tardy with rental payments
Has made an unnecessary number of
unreasonable demands
Been regularly uncooperative with access for
contractors or inspections
Had complaints regarding their conduct in a
Sectional Title Scheme or from neighbours
Been dishonest or disrespectful in reasonably
maintaining the property
Rea says that surprisingly there is no real
science or guideline in how to establish the
percentage of how much the rent will increase.
Some misconceptio ns about this include:
The maximum is 10%
That it needs to be in line with inflation
An increase in rent obliges the landlord to
make upgrades
“For many landlords, escalations should reflect
a fair return on their investment and should be
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Residential Handbook 2016/17
market-related. An industry standard seems to be
10% per annum but once again the landlord may
at his discretion decide to forego the increase or to
increase this in excess of 10% to ensure the rental is
market-related. Tenants need to keep in mind that
the increase in rentals is influenced by supply and
demand more than any other factor,” say Rea.
Below are ways to ensure less of an escalation or
methods to negotiate less of an increase:
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The most effective way to convey that you are
an exceptional tenant is by paying on time and
in full. This may mean consistently paying one
day before the rent is due. This ensures that all
utilities are paid promptly, which may give you
leverage to negotiate a lower rental increase.
Good communication is key and keeping the
agent/landlord informed of any maintenance
(necessary maintenance) and being flexible with
access for repairs, will make you stand out as a
reasonable tenant.
Be reasonable and generally understanding
that the agent or landlord cannot be obliged
to attend to any and every small maintenance
item. Sometimes fixing it yourself will aid your
cause when negotiating less of an increase.
Keeping the property neat, clean and
presentable.
Keep a record of items you have attended to or
improved in the property. Remind the agent
or landlord of these without trying to coerce a
lower increase.
“At the time of the anniversary of the lease, you
would confidently be able to request a lesser increase
if you have been a great tenant,” Rea concludes.
RESOURCES
www.remax.co.za
www.reimag.co.za