Advice to tenants who can no longer afford their lease

13 July 2020

The impact of the national lockdown has reached all sectors of the economy, resulting in reduced household income levels and higher unemployment. This has left many tenants in uncomfortable situations where they are unable to afford their monthly rental repayments.

"At the end of the day, we are all facing the impact of this crisis together and should do what we can to help each other get through these trying times. If a person has been a reliable tenant, then a landlord will likely be open to negotiating with them. I would recommend that tenants first speak to their landlord to see if some other arrangement can be reached. If the landlord can afford it, the tenant might be able to take a payment holiday or set up a payment plan that could suit both parties," says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.

If a payment alternative cannot be reached, then Goslett strongly recommends that tenants give their notice and find more affordable accommodation elsewhere."Tenants who choose this route should review their rental agreement closely to make sure they are not in breach of contract by ending the lease early. Unless there are grounds for cancellation of the agreement, which is stipulated in the cancellation clause, it can be rather difficult to get out of a lease agreement without any recourse," he cautions.

A way to prevent any issues is for the current tenant to help the landlord secure another tenant who is willing to take over the current lease agreement. Alternatively, the tenant can suggest subletting the property until such a time when they can afford to pay the full lease on their own again. Whatever is agreed upon, Goslett emphasises the importance of having any agreement made between the two parties in writing to avoid any confusion or backlash further down the line.

When searching for their next lease agreement, Goslett reminds tenants of the affordability rule of thumb: never spend more than 30% of your monthly gross income on housing. "House sharing is always a good option if a tenant's current earnings are not enough to cover rent on his or her own. For those struggling to find a suitable rental, reach out to a local property practitioner who will help you find something in your price range," Goslett concludes.

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About RE/MAX Worldwide & RE/MAX of Southern Africa

Established in Denver, Colorado in 1973, RE/MAX LLC is recognised as one of the leading international global real estate franchise companies with the most productive sales force in the industry. RE/MAX LLC has over 130,000 agents operating in over 110 countries worldwide.

RE/MAX of Southern Africa, which was founded in 1994, is regarded as the pioneer of the RE/MAX international expansion as it was the first country franchise to be sold outside of North America. With over 2,400 agents operating from over 160 offices and licensed in 5 countries in Southern Africa, RE/MAX of Southern Africa is the largest real estate brand in the region, outnumbering our closest competitor by nearly 1,000 sales associates.

Article published courtesy of My Property

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