Property Investment Cape Town

Divorce and death affect landlords and tenants alike

Renting property is generally the best option for people not looking for long-term commitment, but complications often occur when relationships between tenants break down.

Couples who divorce or separate can cause headaches for landlords and managing agents when neither takes responsibility for the lease.

The same difficulties arise when a tenant dies, leaving a partner or housemate to honour the lease.

“Landlords and tenants alike may be hard-pressed to know exactly what to do when a personal shift such as death or divorce happens, and how these events affect a lease,” says Natalie Muller, head of rentals at Jawitz Properties in the Western Cape.

When a couple splits, one option is for one partner to move out and the other to take over the lease.

“For this to happen, the remaining tenant will have to prove their creditworthiness to cover the full rent amount. If they cannot, they could elect to cancel the lease and be liable for the penalties.”

Some tenants choose to have the second tenant replaced by another. Muller says in this case, the landlord will need to agree and the new tenant will have to go through a credit-vetting process.

“The couple who’ve signed the lease are each liable for the rent, so if one should default the other has to be held accountable, no matter the circumstances,” Muller says.

An unexpected death of landlord or a tenant can be a shock. Again the remaining tenant is liable for the rent. Regardless of which party dies during the currency of the lease, either the landlord’s or tenant’s estate has to honour the contract.

Muller says the tenant’s estate, for example, has the right to execute the 20 business days’ notice period, subject to any penalties. But the estate will be liable for the rent on that property for the currency of the lease.

“The landlord also cannot remove the tenant’s belongings until the lease is formally cancelled.”

Generally, a tenant can execute his 20 business days’ notice without any reason.

One should keep in mind though that it would be wise to build in some time to pay rent if the lease is broken while a new tenant is being sourced.

If a landlord dies, the managing agency and/or tenant must be informed.

“The executor appointed by the estate – usuaally indicated in the owner’s will – will advise the tenant and/or agent where the rent has to be paid.

“The executor takes on the responsibility of making decisions for the late owner, noting the benefit to his or her heirs,” Muller says.

For landlords or property owners who choose to let property to friends or family, she advises that business and emotions be kept separate.

Muller says this is because close relationships could lead to blurred boundaries and could result in damage to the relationship should a rental dispute arise.

“It is important to keep it business-like and have a fixed rental contract in place.

“Be careful what you agree to in a verbal capacity, especially if you are the landlord because your tenant – even if they are family – may interpret it to their benefit. Any verbal decision or agreement should be confirmed in writing at all times in order to protect both parties,” Muller says.

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Source: http://www.iolproperty.co.za/roller/news/entry/landlords_and_tenants_affected_by