How Can I Increase Rent Legally and Fairly During the Lease Term or on Renewal?

How can I increase rent legally and fairly during the lease term or on renewal? It is a question many landlords in South Africa ask as operating costs rise and market conditions change.

South Africa’s rental sector is governed by a range of laws, including the Rental Housing Act, Consumer Protection Act, and common law, all of which shape when and how rent can be increased.

This article explores in detail how landlords can lawfully and ethically increase rent during a lease term or at renewal, ensuring fairness to tenants and compliance with legal obligations.

We will cover key principles, legal limits, lease clauses, market considerations, communication strategies, and dispute resolution mechanisms.

Understanding the South African Legal Framework

To answer how can I increase rent legally and fairly during the lease term or on renewal?, one must first appreciate the laws that regulate residential leasing in South Africa:

• Rental Housing Act 50 of 1999 (as amended)
• This Act outlines the rights and obligations of landlords and tenants, stipulating that lease terms must be altered in a fair, transparent, and proper manner, with adequate notice.
• Consumer Protection Act (CPA) 68 of 2008
• If the lease is for more than 6 months (i.e., a “fixed-term” contract regulated by the CPA), landlords must provide specific notice of renewal terms, including any rent increases.
• Common Law Principles
• These govern any lease terms not covered by statute. Parties can contractually agree to increase rent, provided it is not unlawful or unfair.
• Provincial Rental Housing Tribunals
• These bodies resolve disputes and ensure landlords do not impose unfair practices.

Being aware of these frameworks is essential before planning any rent increase.

Increasing Rent During the Lease Term

How can I increase rent legally and fairly during the lease term or on renewal? Requires distinguishing between “during the term” and “on renewal.”

Rent increases during a fixed-term lease are strictly controlled:

 The General Rule – Fixed Rent for Fixed Term

South African law generally requires that rent remains fixed for the duration of the lease, unless the lease explicitly provides for an increase. If no clause allows mid-term increases, the landlord cannot unilaterally impose one.

Key point:

• Always include an escalation clause if you want increases during the term.

 Escalation Clauses

A lease may validly include an “escalation clause” that defines how and when rent will increase.

Typical escalation clause features:

• Percentage increase (e.g., 6% per annum)
• Fixed amount increase (e.g., R500 after 12 months)
• Tied to inflation (CPI-based)

Legal requirement:

• The escalation clause must be clear, written, and agreed upon by both parties when signing the lease.

Fairness requirement:

• The escalation must be reasonable. An excessive or hidden escalation could be struck down as an “unfair practice” by a Rental Housing Tribunal.

Drafting Escalation Clauses Properly

How can I increase rent legally and fairly during the lease term or on renewal? You need to draft escalation clauses that are:

• Transparent: Clearly explain how the increase is calculated.
• Predictable: Specify dates or events triggering the increase.
• Reasonable: Keep increases within market norms.

Example of a fair clause:

“The monthly rental will increase by 6% annually on the anniversary of the lease commencement date.”

This clarity helps avoid disputes.

Notice Requirements for Mid-Term Increases

Even with an escalation clause, landlords must follow fair notice practices:

• Provide tenants with written notice at least 30 days before the effective date of the increase.
• Typically, 30 days’ notice is standard, even if the lease allows the increase.

This demonstrates fairness and aligns with general principles of good faith in contracts.

If There Is No Escalation Clause?

If the lease is silent on rent increases, the landlord cannot raise the rent during the lease term. Any attempt to do so could be deemed an unfair practice.

Remedy for landlords:

• Wait until the lease expires.
• Negotiate new terms at renewal.

Increasing Rent on Renewal

The second part of how can I increase rent legally and fairly during the lease term or on renewal? Relates to renewals.

 Renewal Is a New Contract

A renewal or extension is a new lease period. Parties can negotiate new rent levels freely. Landlords can propose an increase, but tenants must agree to it.

Legal tip:

• Make the proposed new rent clear in writing before the existing lease expires.

 Consumer Protection Act Requirements

The CPA governs fixed-term leases longer than 6 months. Section 14 says:

• Landlords must notify tenants not more than 80, and not less than 40 business days before the expiry that the lease is ending and propose renewal terms (including any increase).
• Failure to provide proper notice may leave the landlord unable to enforce the increase or allow the tenant to cancel without penalty.

Example notice letter:

“Dear Tenant, your lease expires on 30 September 2025. You may renew for 12 months at R8,000 per month (a 6% increase). Please advise by 1 September 2025 if you wish to renew.”

This approach ensures legal compliance and fairness.

 Fairness Requirement for Increases

Even when the CPA allows rent increases at renewal, these must be reasonable.

Factors to consider:

• Comparable market rentals
• Local demand and supply
• Property condition
• Inflation

Charging far above the market rate could lead to disputes before the Rental Housing Tribunal or claims of unfair practice.

Best Practices for Fair Rent Increases

To ensure how I can increase rent legally and fairly during the lease term or on renewal, landlords should follow these best practices:

Research the Market

• Conduct market surveys.
• Compare similar properties in the area.
• Avoid pricing out good tenants unnecessarily.

Communicate Clearly

• Provide written notice well in advance.
• Explain the rationale for increases.
• Be open to negotiation with long-term tenants.

Keep Increases Modest and Predictable

• CPI-linked or fixed-percentage escalations are viewed as fair.
• Sudden large jumps deter tenants and may invite legal scrutiny.

Document Everything

• Include clear escalation clauses in leases.
• Save copies of notice letters.
• Maintain records of market research justifying increases.

Consider Tenant Circumstances

• Long-term, reliable tenants may be entitled to lower increases.
• Vacancy costs can outweigh small gains from rent hikes.

Common Pitfalls to Avoid

How can I increase rent legally and fairly during the lease term or on renewal? Right, landlords must avoid:

Unilateral Increases Without Clause

You cannot simply send an email increasing rent mid-lease without an agreed-upon escalation clause.

Vague or Hidden Escalation Clauses

Ambiguous wording can be challenged. Ensure precision.

Insufficient CPA Notice

Failing to provide the 40–80 business days’ notice of renewal terms can void your increase.

Charging Above Market

Excessive increases can be declared “unfair practice,” leading to orders from the Tribunal to reduce rent.

Dispute Resolution: Rental Housing Tribunal

If tenants object to a rent increase:

• They can file a complaint with the Rental Housing Tribunal.
• The Tribunal will investigate whether the increase is fair and lawful.
• Landlords must be able to show that the increase is justified.

Tribunal decisions are binding and enforceable as Magistrates’ Court orders.

Commercial vs. Residential Leases

Note that I can increase rent legally and fairly during the lease term or on renewal? Differs slightly for commercial properties:

• The CPA generally doesn’t apply unless the tenant is a small business below the Act’s turnover threshold.
• Negotiated lease terms govern.
• Escalation clauses are standard and often tied to CPI.

But for residential leases, consumer protection and Rental Housing Act rules are stricter.

Tips for Landlords

If you want to increase rent legally and fairly:

• Draft an explicit escalation clause in new leases.
• Stay within market rates.
• Communicate transparently and respectfully.
• Give proper notice under the CPA.
• Be willing to negotiate.

Tenants who feel respected and treated fairly are more likely to accept increases and renew their leases.

Summary

How can I increase rent legally and fairly during the lease term or on renewal? It is best answered by following these principles:

• During the lease term:
  • Only with an agreed escalation clause.
  • Reasonable, clear, and pre-negotiated increases.
  • Proper notice, even if the lease allows increases.
• At renewal:
  • Free to propose new rent, but must give 40–80 business days’ CPA notice if the CPA applies.
  • Increase must be reasonable and market-based.
• Always ensure clarity, fairness, and legal compliance to avoid disputes and maintain a positive landlord–tenant relationship.

FAQs

How much can I increase rent during a lease?

Only as specified in the lease’s escalation clause. No clause means no increase mid-term.

How much notice do I need to give for an increase?

Typically, 30 days for mid-term escalation. For renewal, the CPA requires 40–80 business days’ notice.

Can tenants refuse a rent increase?

Yes, if it’s during a lease with no escalation clause. For renewal, they can decline the proposed terms and move out.

What if my increase is challenged?

The tenant can approach the Rental Housing Tribunal, which can reduce or invalidate unfair increases.

Can I link increases to CPI?

Yes, CPI-linked escalation is common and fair if agreed in the lease.

Useful External Links 

• www.gov.za/documents/rental-housing-act

• www.gov.za/documents/consumer-protection-act

• www.westerncape.gov.za/general-publication/rental-housing-tribunal

• www.justice.gov.za