If you are currently leasing or planning on leasing your property, whether it is commercial or residential, there are a few key points you should consider that could possibly save you some time and money as well as ease some stress.
In Jamaica, the Rent Restriction Act (the “Act) is the primary legislation governing the relationship between landlords and tenants. The law generally developed to favour the rights of tenants, who were traditionally viewed as having less bargaining power than the landlords collecting rent from them, and this is reflected in the protections tenants enjoy under the Act. Landlords should therefore ensure they conduct themselves according to the law to preserve the limited rights they have under the Act as well as avoid liability Here some points landlords should consider when leasing a property:
1. Ensure You Have a Signed Lease
A well written lease will clearly outline the rights and obligations the landlord and tenant have in relation to the leased premises and to each other. Whilst it is possible to have a binding verbal agreement, when it comes to land, the law requires at the very least, a written memorandum that recorded the essential elements of the agreement, otherwise the agreement may not be enforceable. Having a signed written lease therefore prevents a tenant from denying knowledge of an obligation and saves you the time, money, and the stress of having to go to court to attempt to prove that the agreement existed and that it contained the terms you allege.
It is recommended that you lease should be prepared by your attorney who would be able to include all the necessary formalities and covenants for a valid lease as well as protect your interest. Some of the standard clauses that should be included in every lease are:
- Description of the parties;
- Description of the leased premises;
- Commencement date for the lease;
- Duration of the lease;
- Rate of rent; and
There are other important clauses that ought to be included such as, clauses that speak to renewal of the lease and various obligations of the tenant which can all be customised to fit your particular circumstance.
2. A commercial Property can be Exempted from the Rent Restriction Act.
Under the Act, an application can be made for a public or commercial building to be exempted from its provisions once certain criteria are met. Because of the restrictive nature of the Act and its focus on protecting the tenant, obtaining an exemption shifts some of the of power back to the landlord as a tenant would no longer be afforded the protections under the Act. A landlord who receives an Exemption Certificate
- Choose at your own discretion the rate at which rent can be increased each year and not be restricted by the prescribed rate of increase set out in the Act and Regulations.
- Have more control over the conditions for termination.
The Act lists specific reasons that a landlord can rely on terminate a lease which must be stated in the notice to quit the tenant is given. If you do not use one of the reasons under the Act. or the reason does not actually apply to the circumstances, you may not be able to get an eviction order from the Court. We have found that in many instances landlords’ ability to terminate a lease with a tenant is restricted because their reason for termination is not one of the prescribed reasons stated in the Act. Obtaining an exemption will provide the landlord with more flexibility and greater control of this aspect. For example, in the Act the sale of a property is not stated as a reason a lease can be terminated by a landlord. This is very restricting for a landlord, however if an exemption is obtained a properly worded clause could contemplate a lease being terminated in those circumstances.
- Exercise your contractual right of re-entry. Your lease can contain a provision for re-entry in the mutual agreements and will determine the circumstances and process through which you can re-enter and take possession without the need to go to court.
3. You cannot seize (distrain) the property a tenant for rent owed
Distress is a legal concept in which a landlord is given the right to sell the tenant’s goods/property found on the leased premises to recover arrears of rent owed by the tenant, however, due to the Law Reform (Landlord and Tenants) Act, the right to distress is unlawful no longer available to landlords in Jamaica. According to the Law Reform (Landlord and Tenants) Act, any provision in a lease purporting to give the power to distress for rent Jamaica shall be void. Additionally, carrying out distress is a criminal offence and may also result in a civil claim being brought against you. To recover unpaid rent, you either need bring a court action or invoke arbitration if that is one of modes of dispute resolution set out in the lease.
There are several additional issues a landlord may want to consider as the ones mentioned above are not exhaustive. If you are having issues with a tenant or are considering leasing your property, it is important to get advice on the opportunities, rights, and obligations you may have as a landlord before making any decisions.
Antwan Cotterell is an Associate at Myers, Fletcher & Gordon in the Property Department. He can be contacted via Antwan.Cotterell@mfg.com.jm or myersfletcher.com. This article is for informational purposes only and does not constitute legal advice.