Lease Contracts

Lease Contracts and lease renewals create significant obligations (operationally, contractually, and financially) for companies and individuals entering into such agreements in South Africa. They must be managed correctly, as failure to do so can have significant consequences.

Lease Contracts

Need to be correctly and professionally drawn up to reflect the wishes of all parties.
Need to be managed for the duration of the Lease Agreement to make sure all aspects are carried out.

Lease Renewals

Need to be clearly defined in the original rental agreement.
Usually need to be acted upon before the original lease agreement terminates.

30 Factors that one should be considering BEFORE one enters into a lease contract for industrial premises:

1. Precisely what is being rented? Factory/ Warehouse, offices, yard areas, etc
2. Are any areas shared with other users? (e.g., Shared yard areas).
3. Rentable area of premises. The most commonly used formula is the SAPOA Method of Measuring Floor Areas.
4. The exact use of the premises and facilities.
5. Date of Occupation of the Premises.
6. Lease start date.
7. The period of Lease.
8. Lease End Date.
9. Annual rental escalation.
10. Deposit required.
11. Renewal period and terms & date to be complied with for Renewal to be Valid.
12. Initial Rental. (Excl. Vat)
13. What other initial costs must the Tenant pay? (e.g., Security, Operating Costs).
14. Include how/when these costs escalate.
15. How are consumption charges (e.g., Electricity, Water, Sewerage, etc.) calculated and billed?
16. Suretyships (if applicable).
17. Any individual/ additional requirements requested by the Tenant?
18. The Tenant’s legal entity will prepare all FICA documentation required by the Landlord.
19. The Tenant will likely need to consent to a credit check by the agent or the landlord.
20. Resolutions when companies or trusts are legal entities.
21. What lease/Administration costs are charged to draw up the contract?
22. Power requirements?
23. Height/ stacking and racking requirements.
24. Fire regulation compliance (e.g., Sprinkler systems, etc.).
25. Insurances.
26. Loading, parking, paving, and turning circle requirements. (e.g. turning circles for interlink trucks are essential).
27. Flooring and lighting.
28. Importantly, staff facilities.
29. Also, the timing of a move from previous premises.
30. Finally, cleaning up of former facilities.

Epping Property can assist landlords and tenants with Lease Contracts and Lease Renewals.

We can also help draft contracts with clauses that are fair to both parties and reflect the latest laws and regulations.

Epping Property goes through each lease and highlights the relevant clauses. Most notably, specific terms often seem innocuous but can “come back to bite you” later.