How a Tenant can challenge Rent Increase.
Introduction
When your tenancy contract is nearing renewal and you begin negotiating with your landlord, it is useful to know your legal rights to avoid unknowingly being made to accept rental increases that are arbitrary. Unlike in many jurisdictions around the world where an annual rental increase is accepted due to normal inflationary trends, Zimbabwe has defined regulations that determine the extent to which a landlord can request an increase in the annual rental.
This law establishes the mechanism to be used to establish whether a landlord is entitled to increase the annual rent and goes further to also determine the percentage increase which may be applied.
Lease Agreements
A Lease Agreement (or rental agreement) is a document that explains the terms under which a tenant rents a residential or commercial property from a landlord. Lease agreements are legally binding contracts that explain the obligations and rights of the tenant and landlord.
The lease agreement usually contains a provision stating when and how rent is increased. In the absence of a written lease agreement or where the lease agreement is silent on rental increments, the landlord is guided by the Rent Regulations, 2007 (SI 32/2007).
The Law
All commercial and residential rental properties have a standard rent. This is the rent recommended by a registered valuer and approved by the appropriate board in agreement with the government.[1] Firstly, the Rent Regulations provide that a landlord shall not increase rentals within the first six months of the lease agreement unless the tenant agrees to this increment.[2]
Secondly, a landlord may independently increase rentals by 30% or less, however any increments above 30% must be approved by the Rent Board.
The Rent Board is a tribunal that arbitrates disputes between a landlord and a tenant. Any aggrieved party to a lease agreement can seek relief. The board is not bound by the strict rules of evidence or procedure and is empowered to do whatever it can to bring substantial justice to matters. Any rental increase must be justified for example, the landlord has made improvements to the property or the cost of maintaining the property has increased.[3]
Thirdly, if a landlord intends on increasing the rentals, both parties must agree on the new rental amount. If a tenant refuses the increase and the landlord is of the view that the increase is justified, they may make an application to the Rent Board seeking an order to increase the rent. The application must include compelling reasons for the increment.
If a rental increase is not justified it can be challenged by the tenant. The tenant must write a letter to the Rent Board outlining the dispute. The board will then set a date for the hearing and notify all parties. At the appointed time and place the parties appear before the board and present their cases and answer questions posed by board members. Parties may be represented by legal practitioners or any other duly appointed persons. Oral and written submissions are made as directed by the board.
A party in absentia may be represented by proxies as is the case for landlords outside the country. If the tenant is challenging a rent increase that is 30% and below the rent board will fix a fair rent which is the standard rent plus permitted increases under the law.[4] An order will be granted by the board prohibiting the landlord from charging an amount higher than the one set by the board.[5] The rent order remains valid for 1 year.
Eviction
If a tenant cannot afford to pay the reviewed amount or the landlord requirs the property for their own use, the landlord must give the tenant 3 months’ notice to vacate the property and terminate the lease agreement. However, if he/she does not vacate the property the landlord cannot use force or threats to remove the tenant.
If after the 3 months’ notice the tenant refuses to vacate the property the landlord must approach the Rent Board or a Court with jurisdiction seeking an eviction certificate/order.[6] Therefore, unless the landlord has obtained an order from the Rent Board or a competent court, it is an offence to (a) remove a tenant’s belongings from the property, (b) lock out the tenant or prevent the tenant from using or occupying the property, (c) disconnect water or electricity from the property.
If the tenant disregards the certificate the landlord can sue the tenant for eviction, payment of arrears rentals and holding over damages.
Statutory Tenancy
If the lease agreement expires or is terminated by the landlord and the tenant does not vacate the property but continues to pay rentals and such rentals are unconditionally accepted by the landlord, then a statutory tenancy is automatically created by operation of law.[7]
The new relationship between the parties is subject to the same rights and duties and is governed by the same terms and conditions as applied under the contractual lease, except where these are inconsistent with the Regulations. Thereafter the statutory tenant is entitled to remain in the leased premises and cannot be evicted so long as he continues to pay the rent due, within seven days of the due date, and performs the other conditions of the lease.[8]
A statutory tenant can only be evicted through eviction proceedings once the landlord proves to the Rent Board/Court that he has “good and sufficient grounds” for wanting back the premises.[9]
Conclusion
When deciding on rental increases, both parties should maintain reasonable expectations, respect the other party’s view and be prepared to compromise, if needed, to maintain a long-lasting relationship. The tenant must understand the prevailing economic factors and improvements made on the property by the landlord. While the landlord must understand the challenges the tenant may encounter in raising the increased rental amount.
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[1] Section 3 Rent Regulations, 2007 (SI 32/2007).
[2] Section 39(4) Rent Regulations, 2007 (SI 32/2007).
[3] Section 19 Rent Regulations, 2007 (SI 32/2007).
[4] Section 18 Rent Regulations, 2007 (SI 32/2007).
[5] Section 26(1) Rent Regulations, 2007 (SI 32/2007).
[6] Section 30(2) Rent Regulations, 2007 (SI 32/2007).
[7] Section 30(2) Rent Regulations, 2007 (SI 32/2007).
[8] Chibanda v Hewlett 1991 (2) ZLR 211 (H).
[9] Section 30(2) and Section 31 Rent Regulations, 2007 (SI 32/2007).