Do renters have any negotiating power over a lease?
Category News
From economic hardship to water and power shortages, we're all quite aware of how harsh our day-to-day lives can be. These days, one has to guard their pennies and pay extra vigilance to how they manage their budgets. With millennials, also known as "generation rent," entering into the rental market at a far higher rate than any previous generation, choosing the right real estate partner to help you negotiate is crucial to making ends meet.
Knowing how much negotiating power you have is vital to signing a lease that best serves you. With the proper guidance and expertise, our expert rental property practitioners have just the negotiating power you need.
Navigating changes in the rental agreement
Renters need to know that they are always in a position to negotiate. Should a landlord wish to change any details within an existing agreement, they are obliged by law to give tenants a 40 - 80 day notice before any changes come into effect.
Regarding renewals, you can negotiate the rate of your increase and any other aspects specific to the agreement, such as maintenance and utility costs. If your landlord wishes to increase your rent by 10%, you have the right to request they fix the ceiling cracks first.
Rental Increases
It's generally accepted that rental costs increase yearly by an average of 10%. But renters need to be aware that this "rule" is not set in stone and that no law governs this. Some tenants may have a 5% increase, some 2%, and others may not even get an increase. This is based on their negotiating power, a reasonable utility cost hike, and the market rate.
Many landlords will set the 10% increase as a standard in their lease agreements without stipulating why beyond the fact that it's a general rule. It's best to avoid any lease agreements where a set increase is imposed. An increase in rent needs to be within a reasonable framework, and should the cost of living decrease alongside interest rates, a tenant should not be expected to pay more when the landlord pays less.
Tenants should view themselves as an asset to the landlord
Good landlords understand that finding the right tenant who pays on time and does not damage their property can be difficult. On top of this, any savvy property investor knows that having a tenant is beneficial to holding onto an empty lot or going through the process of applications and trialling new tenants.
Being well-informed about your value as a good tenant is key to your negotiating power. A conscientious landlord would far rather agree to a more reasonable increase than risk losing your stable monthly rent.
Have a backup plan
If you think your lease renewal is unreasonable, keep an eye open for similar properties that may offer a cheaper rate. When the time comes to renegotiate your lease, having a sound understanding of the market rate will allow you to gauge whether your landlord is trying to squeeze you for more money.
Having a backup plan prevents you from being cornered into unreasonable renewals.
Are you looking for an expert to help guide you through the rental application and deposit process? Speak to Sharon Maramba, your property professional, if you require assistance while searching for property in the Northern Suburbs.
Sharon Maramba
Cell - 078 227 5493
Office - 011 706 8238
View Sharon's rental listings [here]
If you want to buy or sell your home, contact one of our Real Estate Property Practitioners by following the link: https://www.homesofdistinction.co.za/agents/
Homes of Distinction CC holds a Fidelity Fund Certificate issued by the Property Practitioners Regulatory Authority.
Author: Bryce Anderson
