Q: Is it permissible to include in a lease agreement with a commercial tenant that they will be responsible for the following:
1) Monthly municipal rates which will be billed by the Municipality to the landlord. These charges will be passed on to the tenant.
2) If at any time during the lease agreement there are any increases by the municipality in rates, the tenant will also be liable for such increase.
A: In a lease agreement, the rent has to be fixed and mutually agreed upon by the lessor and the lessee. Hence, when stipulating the rent, if the landlord includes the amount of rates on the property and charges the tenant a fixed rent, it will be permissible e.g. the landlord knows that the rates is R500 and he wishes to charge the tenant R2000 for leasing the property, then he should fix the rent at R2500 from the beginning. He should inform the lessee that when there is an increase in the rates, then from the following month he will enter into a new lease agreement.
And Allah Ta’ala (الله تعالى) knows best.
Mufti Zakaria Makada
Checked & Approved:
Mufti Ebrahim Salejee (Isipingo Beach)