Dr. Eugene Brink
In this low-growth economy, the confidence of consumers as well tenants is equally low.
People are also employed in precarious, unstable jobs, with retrenchments being commonplace. Nevertheless, rental increases remain the norm and landlords are also entitled to escalations to bolster their investments.
The determination of a rental increase may be delimited in a contract, but in most instances there certainly is wiggle room for tenants to haggle over a lower rate of increase.
Jacqui Savage, national rentals business development manager for the Rawson Property Group, says a fair negotiation is in the best interests of everyone involved. “A lot of people are still under the impression that a 10% annual rental increase is standard. In reality, there are no legislated minimums, maximums, or ‘standard’ figures – annual escalation is set on a case by case basis.”
“The Rental Housing Tribunal is very clear about the fact that increases need to be reasonable, which means landlords need to be able to back up their escalation figures with properly researched industry trends,” says Savage.
She says landlords need to deal with each case on its merits. “Good tenants, who look after your property, pay on time and communicate well with your managing agent can be worth their weight in gold. The national percentage of tenants in good standing is slowly improving, but it’s still definitely worth considering a slightly lower escalation rate if it means keeping a reliable tenant in place and happy.”
This is where tenants’ bargaining power lies. “You want to be the kind of tenant your landlord doesn’t want to lose. Yes, that means paying your rent on time, but it also means being proactive when it comes to small, day-to-day maintenance chores and minor fixes. If you call the landlord every time a lightbulb needs changing, they’re not going to be too sad to see you go.”
Mindful of this, Willem le Roux from Le Roux Attorneys Inc and Grant Rea, rental specialist at RE/MAX Living in Cape Town, lie down specific guidelines for tenants to keep in mind when negotiating their rental increase:
- 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.
- Good communication is key, and keeping the agent/landlord informed of any maintenance (necessary maintenance) and being flexible with granting access for repairs will make you stand out as a reasonable tenant.
- Be reasonable and understand that the agent or landlord cannot be obliged to attend to any and every small maintenance item.
- Taking the initiative and fixing it yourself will aid your cause when negotiating less of an increase.
- Keep 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.
Fin24, 27 December 2016, “How to avoid a big rental increase”, https://www.fin24.com/Money/Property/how-to-avoid-a-big-rental-increase-20161227.
Rawson Properties, 2019, “How to negotiate a fair rental increase”, https://blog.rawson.co.za/how-to-negotiate-a-fair-rental-increase.
Willem le Roux, 16 April 2019, “How to negotiate a reasonable rental increase”, https://www.evictionlawyers.co.za/legal-news/negotiate-rental-increase/.