The question posed to our panel this week revolves around estate agents managing rental contracts.
The reader would like to know whether he, as lessor, may terminate a tenant’s contract and then continue with the same tenant under a new lease agreement that excludes the agent.
He was told by the letting agent that only the tenant may terminate the lease agreement. Also, if the tenant and landlord were to conclude a new contract excluding the agent, the agent would still be entitled to his or her commission on the rental collected.
In order to address the problem, it is important that the two contracts at play here be dealt with separately, says Lucille Geldenhuys from Lucille Geldenhuys Attorneys in Stellenbosch.
“The first is the lease agreement between landlord and tenant and the second is the agreement between landlord and letting agent.”
Geldenhuys advises that both of these be reduced to writing independently, as this can prevent confusion and uncertainty.
“In practice, however, the agreement regarding the agent’s commission is often included in the lease contract itself. It can be as simple as a clause obligating the landlord to pay a percentage of the rental to the agent for a specified time.”
Where this is the case, says Geldenhuys, the duties of the agent are generally not in writing, which potentially complicates matters if the reader wishes to find fault on the part of the agent.
“The reader should consider the agreement between himself and the estate agent, whether written or not, to determine whether there may be grounds for cancelling it.”
Geldenhuys says issues such as poor performance or the agent not acting within his or her mandate could be acceptable reasons. “The reader will then need to determine how to proceed, how much notice to give and so forth.”
However, terminating the lease and then concluding a new one with the same person in order to exclude the agent is not necessarily the solution, says Schalk van der Merwe from Rawson Properties Helderberg.
“Any clever letting agent would specifically include a provision relating to this in the agreement, to ensure that he or she is not just used to obtain tenants and then excluded from the transaction.”
According to Van der Merwe, a well worded document could provide compensation measures in such an instance.
“The situation is not changed if it is the tenant who chooses to end the existing contract and enter a new one with the same landlord – the decision may have been prompted by the landlord to achieve the same result.”
Of course, the scenario could be different if the agreement between landlord and tenant is terminated and a new lease concluded with a different tenant, says Van der Merwe. “The landlord may choose to terminate the relationship with the agent at the same time and rather liaise with his tenants in person in future.”
Van der Merwe says the termination of both agreements should once again take place in terms of the provisions of the contract.
Send your property related questions to pr@fullstopcom.com.
