A lease is the most common arrangement available in Zimbabwean law that allows for occupation and use of real property for a limited time. This grants exclusive possession to the lessee for a specified period, subject to the terms and conditions specified in the lease agreement. In terms of the Common Law, a usufructuary right of use may be granted by a property holder for the duration of the right holders’ lifetime.
Last modified 12 May 2023
Commercial leases in Zimbabwe do not have a prescribed period, and the length of the lease is subject to contractual agreement between the parties. The market trend in real estate currently sways towards shorter-termed leases, ranging from anything between one to ten years. The current economic challenges in Zimbabwe have forced landlords to grant shorter commercial leases. For long-term leases, that are more than 10 years, the Deeds Registries Act provides for the lease to be registered.
Last modified 12 May 2023
The rights of residential tenants are set out in the Housing and Buildings Act [Chapter 22:07] as well as the Housing and Building Rent Regulations [S.I 32 of 2007]. Commercial property, on the other hand, is regulated by the Commercial Premises Lease Control Act [Chapter 14:04] and the Commercial Premises Lease Control Act Rent Regulations [S.I 676 of 1983].
In terms of the Commercial Premises Lease Control Act Rent Regulations, a commercial premises is defined as ‘any premises or part thereof occupied under a lease for the purpose of carrying on therein any industry, business, trade or occupation, and includes any ground, parking-space, garage, outbuilding, workers’ quarters and other improvement let therewith.’ As such, the definition includes all forms of commercial real estate.
These Acts and their corresponding Regulations are the law which regulate aspects such as the appointment of a rental board, what is considered a fair rental, offences, restrictions on ejectment as well as the various rights and duties of the parties.
Whilst parties have freedom to contract, in order for the lease to be a lawful in terms of Zimbabwean law, the parameters of the legislation must be adhered to. It is for this reason that the rent boards have been established in terms of the legislation, and these boards have powers to hear applications pertaining to any rental issues between the parties and to make an appropriate order.
Last modified 12 May 2023
The right to continue with a lease will be governed by the lease agreement entered into between the parties. If the lease agreement does not make provision for the tenant to occupy the property after expiration of the lease, then the tenant has no lawful right to do so. Should the tenant continue to occupy the premises unlawfully, then the landlord will have to pursue the process for eviction. In the interim, the unlawful tenant will be regarded as statutory tenant in terms of the Commercial Premises Lease Control Act Rent Regulations, provided that he continues to pay the rental due within seven days of the due date and performs in terms of the conditions of the lease. Whilst being a statutory tenant, the lessee is entitled to retain possession of the commercial premises and benefit from all the terms and conditions. He may only relinquish his entitlement to possession upon giving notice in terms of the lease or upon reasonable notice in the event that no notice is required. Once the lessor obtains an order to recover possession of the commercial premises or for ejectment of the lessee, no notice will be required to be given.
Last modified 12 May 2023
There is normally a contractual provision inserted into the lease agreement that states that in the event that a lessee remains in occupation of the property beyond the tenure of the lease, the landlord would be entitled to claim an amount equivalent to the rent and other sums due in terms of lease agreement. The landlord shall be entitled to accept and recover such payments without prejudice to effect on his claim to the cancellation of the lease. The eviction process may then be instituted in order to lawfully evict the lessee from the property. Legal advice in this regard would need to be sought.
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The lease agreement typically makes provision for the circumstances in which the lease can be terminated (early termination) and the lessee is then required to vacate the premises. This is normally in the case of non-payment of the rental or operating costs, a failure to comply with the obligations in terms of the lease agreement or upon a failure to rectify a breach of a condition of the lease agreement, having received written notification to do so. The contract will also provide for termination of the lease agreement in the even that the tenant absconds, deserts or vacates the property without giving proper notice.
In the event that one of the circumstances mentioned above has occurred and the agreement is terminated, but the lessee still remains in occupation of the property, the eviction process would then need to be followed.
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In terms of the Land Acquisition Act [Chapter 20:10], the President of Zimbabwe or any Minister duly authorized by the President, may compulsorily acquire: any land, where the acquisition is reasonably necessary in the interests of defence, public safety, public order, public morality, public health, town and country planning or the utilization of that or any other property for a purpose beneficial to the public generally or to any section of the public; any rural land, where the acquisition is reasonably necessary for the utilization of that or any other land for settlement for agricultural or other purposes, for purposes of land reorganization, forestry, environmental conservation or the utilization of wild life or other natural resources or for the relocation of persons dispossessed in consequence of the utilization of land for these purposes. The acquiring authority and the party affected may enter into an agreement for the acquisition or the formal process in terms of the Land Acquisition Act may be followed.
Where the land is acquired, the Land Acquisition Act allows for the eviction of the owner or the occupier of such land once the relevant procedure has been followed in terms of the Act and an order obtained. The formal process in terms of the Act must be followed and an order obtained. Once the order is obtained, it is then served upon the occupier or owner of the land, and he or she is then given three months written notice to vacate. If the land is agricultural land, notice in writing is given to the owner or occupier to cease to occupy, hold or use that land 45 days after the date of service of the order upon the owner or occupier. If he fails to do so, he shall be guilty of an offence and liable to a fine or to imprisonment for a period not exceeding two years.
The Act states that fair compensation shall be paid within a reasonable time by the acquiring authority.
Last modified 12 May 2023
Parties have freedom to contract in this regard, but it is a typical practice for the landlord to request a deposit in terms of the lease agreement prior to the tenant being permitted to occupy the premises. This is normally the equivalent of one month’s rent. This deposit is normally used to cover the landlord against any damage due to the negligence of the lessee or to set off against any rental due.
In terms of the commercial Premises Lease Control Rent Regulations, a landlord is not permitted to retain a deposit for more than 14 days from the date on which the lessee vacates the premises.
The landlord enjoys protection for the payment of arrear rental by means of the Landlord Hypothec. The Landlord Hypothec allows the landlord to sell the movable goods of the lessee which are on the leased premises, in the event that the tenant fails to pay the rent. Section 34(3) of The Magistrates Court Act [Chapter 7:10] allows the landlord to approach the court for an order to attach the property based on the hypothec, seizing the movables of the lessee which are on the property, as may be sufficient to satisfy the amount of rent due and in arrear, together with the costs of such application and of any action for the rent due and in arrears.
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The lease agreement entered into between the parties will regulate how the lessee is permitted to use the premises and under what conditions. The parties generally have freedom to contract in this regard and the common law requirements for conclusion of a contract would then be applicable. As such, according to contract law, parties are prohibited from entering into a contract for an illegal or unlawful purpose. As such, the use of the property cannot be for an illegal or unlawful purpose.
The Urban Councils Act [Chapter 29:15], which regulates the establishment and administration of municipalities and towns in the urban areas, imposes a duty on the council to do all things necessary to ensure that the conditions of the establishment of any township within the council area and the conditions of title to any land in the council area are properly observed. The council has the power, upon the service of a notice, to:
In the notice that the council serves, restriction may be imposed on the use of the property.
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The parties have freedom to contract in this regard, however, typically the provisions of the lease agreement will state that the lessee is not permitted to alter or improve the property without prior written consent from the landlord. Should any alterations or improvements be made, it shall be at the expense of the lessee, and that such improvements or alterations will be removed without damaging the property upon termination of the lease. The property must be restored to the condition that it was in at the commencement of the lease. Any alterations or improvements that remain will then become the property of the landlord and the lessee will not be able to claim compensation in that regard.
Exterior and structural improvements or repairs are normally the obligation of the landlord.
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There is normally a clause in the agreement that states whether the lessee can cede or assign its rights and obligations, transfer, make over, alienate or pledge any of its rights under the agreement, with the landlord’s prior written consent. A deviation from this would result in a breach of the contractual terms and the landlord would then be permitted to terminate the lease agreement in accordance with the termination provisions.
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The Commercial Premises Lease Control Act simply states that once a fair rental has been determined and is in force, the landlord will not be permitted to charge a rental in excess of that amount. However, the parties have contractual freedom and may in their agreement include a rental review clause to state that the rental will be subject to an increase of a certain percentage after a certain period of time, or that it will increase in accordance with the comparable market rates.
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The lease agreement will make provision for the rental to be reviewed after a certain period of time or it may state that the rental will increase on an annual basis by a certain percentage, or in accordance with the comparable market rates. The parties are however free to contract as they wish in this regard.
Where the parties cannot reach an agreement pertaining to a rental increase, or where the increase is excessive, the Housing and Building Rent Regulations [Statutory Instrument 32 of 2007] and the Commercial Premises Lease Control Act Rent Regulations [Statutory Instrument 676 of 1983] states that either party may approach the rent board to decide the matter and thereafter issue an order.
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VAT in Zimbabwe is 14.5% and will not be chargeable on residential rentals but is however chargeable on commercial rent under the terms of the VAT Act [Chapter 23:12]
The Income Tax Act [Chapter 23:06] section 36 C also states that where an individual is an informal trader, (ie carries on a trade for his own account from which he derives a gross income of less than six thousand United States dollars or such other amount as the Minister may prescribe by notice in the Gazette ; has not in the most recent year of assessment for which he could have done so, furnished a return for the assessment of the income derived for his own account; is a hawker or street vendor; is a person who sells articles at a place commonly known as a “people’s market” or a “flea market”; or a person who manufactures or processes any articles in or from residential premises) he must notify the Commissioner of his status as an informal trader in writing. A presumptive tax, equal to such percentage of the rent paid must then be paid to the Commissioner, unless the landlord is in possession of a VAT tax clearance certificate.
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There are no further costs payable by a lessee at the start of a lease, apart from the deposit and the rent. For the duration of the lease, the lessee will be responsible to pay rates to the local authority, such as water, electricity, municipal rates and service charges.
If the lease is registered with the deeds office in terms of the Deeds Registries Act, stamp duty will be payable.
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The parties are free to contract as they wish in this regard, but typically, the landlord is responsible for the maintenance and repair of the roof, the structure, exterior and all common areas of the leased premises. Where the gardens form part of the leased premises only, for example in a garden flat, the lessee is normally responsible for maintaining it. However, the common grounds and garden areas are normally maintained by the lessor.
Ordinarily, where there are several lessees, a levy is chargeable per month over and above the monthly rental. This levy then goes towards the maintenance, repairs and safety of the complex.
Last modified 12 May 2023
Typically, the landlord repairs and maintains common areas and the structure of the building. The lessee is responsible for the maintenance of the interior of the premises they occupy.
Last modified 12 May 2023
It is subject to contractual agreement between the parties. However typically, utilities and telecommunications are the responsibility of the lessee, and are normally paid directly to the service provider by the lessee.
Last modified 12 May 2023
Typically, the landlord would be responsible for the insurance of the structural property against fire and related perils, whilst the lessee would be responsible for insurance of the remainder against all claim including public liability insurances, for example, glass, signs and supports, fittings and fixtures affixed to the buildings or the contents. The parties would contract that the lessee would not do or fail to do anything which would cause an increase in the insurance premiums, or keep any hazardous goods on the leased premises.
Last modified 12 May 2023
Who pays the cost of insuring the real estate which is the subject of a lease and what events causing damage will usually be covered by the policy?
Typically, the landlord would be responsible for the insurance of the structural property against fire and related perils, whilst the lessee would be responsible for insurance of the remainder against all claim including public liability insurances, for example, glass, signs and supports, fittings and fixtures affixed to the buildings or the contents. The parties would contract that the lessee would not do or fail to do anything which would cause an increase in the insurance premiums, or keep any hazardous goods on the leased premises.
Last modified 12 May 2023