Sectional Title: Pitfalls For Tenants to Avoid
This is the time of year where many lease contracts expire and tenants are left looking for new accommodation.
So, before you sign the lease on your next rental unit, there are a few precautions that you need to take. These seem to be minor things that are usually overlooked during the rush of moving to a new place but they can spell serious trouble if they aren’t dealt with accordingly.
For peace of mind regarding your financial status, be sure to check that you have followed the necessary procedures:
(1) Sectional title finances
First of all, you need to ensure that the financial position of the scheme is sound and secure.
Why should you, as a tenant, care about this?
Well, it should be well-managed and it should have adhered to any legal requirements regarding the rental of a property. If the owners have been lax about paying or collecting levies, it could mean that the body corporate is in financial trouble.
Tenants might think that this is not their concern, but a bankrupt body corporate won’t be able to ensure that the buildings are properly maintained and repaired.
In due time, tenants might find themselves living in run-down surroundings and that is something you want to steer clear of.
Not necessarily something you’d like to get exposed to, right?
(2) Lease agreement
Secondly, sectional title owners should be very clear about what the monthly rent covers.
This should be stipulated in the lease agreement and there should be no confusion from any party.
It should also be spelled out how the increase in levies will affect tenants. Ever thought about that one?
Generally speaking, the landlord or owner is responsible for any repairs and maintenance done to the interior of the unit. The upkeep of the exterior and common areas such as gardens or garages will be the responsibility of the body corporate. This is paid for out of monthly levies.
Not so fast – it’s not over yet: this does not mean that tenants don’t have to worry about annual increases in levies or any special levies that may be imposed on owners!
Before any signature is penned on the lease agreement, tenants should make sure that it provides for the landlord to increase the rent in the event of an increase in levies. Tenants should also confirm whether their rent includes parking or not as well as the use of a storage area. They must also find out if they will need to pay an additional monthly amount for that and if they have to contribute to municipal service bills.
It is always better when units are installed with their own water and pre-paid electricity meters.
Billing can turn out to be unfair and lead to unnecessary landlord-tenant conflict, especially if the body corporate still receives a collective bill for all units on the property.
It can become very tricky to allocate the funds to the respective units according to their size.
(3) Conduct rules
The third aspect that tenants need to check before moving into a new sectional title is the conduct rules that apply to such a scheme, especially if it is the tenant’s first time moving into a sectional title property.
Legally speaking, a copy of these rules should be attached to the signed lease and it would be wise for tenants to be aware of these rules before the agreement is signed.
A good example would be that of pets: the lease agreement might omit any clause regarding pets but the code of conduct does not allow animals. Both documents are then needed for better understanding.
Finally, it is better for sectional title owners and body corporates to make use of a managing agency to ensure that the paperwork and daily activities are taken care of. This way, levies are managed more efficiently and admin is done in an organized manner.