Did you know rental deposits don’t belong to landlords, agents?



October 31, 2016
Did you know rental deposits don’t belong to landlords, agents?
The Rental Housing Act requires that deposits be kept in an interest-bearing account and refunded to the tenant after an outgoing inspection.

Relationships between landlords and tenants are rarely easy.

The wrong tenants can ruin properties, squat or cripple landlords financially, while landlords can be just as crooked, particularly when they don’t bother to maintain their assets, charge extortionate rentals and retain deposits for no good reason.

Landlords are put into a difficult position once people have occupied your premises, because the law is on their side as it becomes a ruinously expensive exercise to get them evicted.

Which is why a proper risk assessment needs to be conducted to determine the suitability of potential tenants. It’s not fail-safe, but armed with a credit report, recommendations from previous landlords and the deposit, you have some leverage.

But signing a contract, whether it’s a lease or purchase agreement, based on a cursory glance at a property on “show day” can be risky because all the snags generally only show themselves after you occupy the property and landlord’s aren’t always keen to fix the snags, once the tenant has paid the deposit and first month’s rent.

And in many instances, landlords tend to retain the deposit, for whatever reason, after the tenant has given notice or moved out.

This is why The Rental Housing Act requires that deposits be kept in interest-bearing accounts. If the tenant wants proof of accrued interest, the landlord or agent must provide it.

Advocate Trudie Broekmann, said, in the matter of Hlongwa v Rental Pros, “Under the CPA, since the lease is a fixed-term agreement, the innocent party – the tenant in this case – has the right to cancel a contract on 20 business days’ notice.

“But further, if it’s a serious enough defect, amounting to a breach of contract by the landlord, who needs to provide habitable premises, the tenant can also cancel – it doesn’t matter what the lease says, it’s a common-law principle.”

And the deposit doesn’t belong to the landlord – it remains the property of the tenant, Broekmann said.

Wise up on property matters

Tread carefully: Whether it’s to buy a property or rent, take your time inspecting the premises. You might also want to revisit it at a later date, accompanied by an expert.

Inspections: Always conduct ingoing and outgoing inspections. Note the snags thoroughly so you’re not liable for a lack of maintenance or the previous tenants’ damage.

Seek advice: Read the contract and if there are some concerns, rather seek expert opinion. It might cost you but rather know what you’re signing.

Georgina Crouth is a consumer watchdog with serious bite. Write to her at consumer@inl.co.za.

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