What you should know before subletting a property

Subletting is becoming popular in South Africa, in part because of the high cost of living. Many people look for subtenants to help them pay their rent, while others seek subtenants if they’re moving elsewhere for work and can’t get out of their current lease.

Whatever the situation, subletting can be helpful if you need extra cash. However, this can present some challenges. This article examines the legality of subletting and provides tips on how to sublet safely and advantageously.

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Is subletting legal?

Subletting occurs when tenants sublease a property they’re renting – or a portion thereof, to a third party. While subletting is legal in terms of South African common law, most leases have clauses prohibiting this practice, says Maike Gohl, junior partner at Schindlers Attorneys.

Even if your landlord allows you to sublet, you may have to sign a sublease rental contract, according to Ryette Munro, rental manager at Rawson Property Group Constantia.

Subletting in a sectional title property may be completely impermissible, however, as body corporates tend to be strict about how many people may occupy a property.

“You could easily find that your landlord gives you permission to sublet, but the body corporate prohibits this,” Munro says.

“Sectional title schemes try to discourage short-term lets in particular, as this can be a security risk, and tenants may contravene the conduct rules with which all occupants must comply,” notes Leroy Villet, a property attorney at Lionel Murray Schwormstedt & Louw.

What you need to know about subletting

It pays to familiarise yourself with some ground rules before you sublet.

Prepare an explicitly worded agreement

Villet says it’s important for both parties to sign a sublease agreement that explicitly states the obligations of each.

“Be sure to incorporate provisions in the main lease regarding the subtenant’s responsibilities, such as keeping the property in good condition,” he says.

“Also note that you can’t grant your subtenant more rights than you have, such as a longer lease than you have in place, unless the landlord agrees.”

A sublease should include details regarding the rental amount and whether this covers utilities, the date of occupation, and what the deposit amount should be. It should also include stipulations that are in the original lease, such as how many people may occupy the property, how many vehicles can be accommodated, and whether pets are allowed.

“A well-drafted, comprehensive lease agreement means there can be no question as to what will be expected by any of the parties,” says Gohl. “The main obligations are to make payment of the rental amount, maintain the property, and have undisturbed occupation of the property by both the tenant landlord and the landlord.”

Be clear about responsibilities

If your name is on the original lease, you will be liable for any damage caused by your subtenants, but you can hold them to account with a clause in the sublease, and seek damages from them.

“If the situation turns sour, both the landlord and the tenant would need to place the subtenant in breach and sue for damages,” says Justin Thom, associate director at Galetti Corporate Real Estate. He recommends taking photographs of the property and all fixtures before the subtenant moves in, so that you have tangible proof of the condition of the property.

What happens if your subtenant doesn’t pay the rent?

Remember that you remain liable for your rental payment to the landlord, even if your subtenant defaults on their payment. If, however, you have a sublease that sets out payment terms, you can demand the rental money from them, notes Villet.

A greater challenge arises if a tenant doesn’t pay and refuses to move out.

“It is a difficult and lengthy process to evict a tenant,” says Villet. “You have to seek a court order in terms of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998. In addition, if it takes 15 months to evict your subtenant, your landlord may issue a damages claim against you for the loss of revenue.”

In this instance, a landlord’s lien may be instituted – meaning a landlord can attach all the goods on the property in lieu of unpaid rent.

Villet points out that, in terms of the consumer protection act, a tenant is entitled to terminate a lease agreement by giving 20 business days’ notice.

“The onus is on the landlord to find another tenant,” he explains. “However, a landlord is entitled to charge a reasonable cancellation penalty, likely to be the equivalent of a month or two’s rental.”

If you’re still keen to sublet, be sure to perform a thorough due diligence process.

“Obtain proof of monthly income, perform a credit check, and make sure you have a sufficient deposit from the subtenant,” Gohl advises. “Ensure that you are both aware of the cancellation clauses and what they mean to you.

“If possible, contact previous landlords to find out if they had any issues with your prospective tenant, and perform a search on the TPN credit bureau database to see whether they have been reported thereon.”

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