Renting your property can be a rewarding return on investment and making sure your agreements are set out in a way that both parties fully understand their roles and commitments is essential to ensure a smooth relationship between tenants and landlords.
One potential pitful that often causes distress in this relationship is how a tenant’s deposit has been handled, what he or she is due to be refunded at the end of the lease period, and what constitutes a failure to repay the said deposit.
Landlords and rental agents acting on behalf of the landlord should remember that they need to refer to the Rental Housing Act and should stick the provisions stated in the act.
This section of the RHA states:
- 5 (c) The landlord may require a tenant, before moving into the dwelling, to pay a deposit.
- 5(d) The deposit contemplated in paragraph (c) must be invested in an interest bearing account with a financial institution that may not be less than the rate applicable to a savings account with that financial institutions, and the landlord must subject to paragraph (g) pay the tenant interest at the rate applicable to such account which may not be less than the rate applicable to a savings account with a financial institution and the tenant may during the period of the lease request the landlord to provide him or her with written proof in respect of interest accrued on such deposit and the landlord must provide such proof on request.
- 5(e) The tenant and the landlord must jointly, before the tenant moves into the dwelling, inspect the dwelling to ascertain the existence or not of any defects or damage therein with a view to determining the landlord’s responsibility for rectifying any defects or damage or with a view to registering such defects or damage.
- 5(f) At the expiration of the lease the landlord and tenant must arrange a joint inspection of dwelling at a mutually convenient time to take place within a period of 3 days prior to such expiration to ascertain if there was any damage caused to the dwelling during the tenant’s occupation.
- 5(g) On expiration of the lease the landlord may apply such deposit and interest towards the payments of all amounts for which the tenant is liable under the said lease, balance of the deposit and interest must be refunded to the tenant by the landlord not later than 14 days of restoration of the dwelling to the landlord.
- 5(h) The relevant receipts which indicate the costs which the landlord incurred, must be available to the tenant for inspection as proof of such costs incurred by the landlord.
Understanding of the rental deposit practice
A tenant accepts that he will pay a deposit before they can take occupation of a property. The deposit amount varies from the equivalent of one month’s rent to three. The process is up to the landlord but in the majority of cases, two months rent as seen as the standard best practice.
Once the tenant pays the deposit, the lump sum has to placed a separate interest-bearing account
Landlords must resist any urge to use that money for any other purpose.
Technically even though the landlord or the rental agent are holding it, the money still belongs to the tenant. Until it can be shown that damage incurred or losses to the landlord can be recouped from the deposit amount provided.
The best way forward
The best way to protect both paties is to stick to the provisions laid out in the RHA and do both incoming as well as outgoing inspections together and agree on the criteria of maintenance along with photos to be taken.
Documenting faults
- During the lease period and after it is over it is crucial to ensure that documenting any defects or damages to the property with corresponding photographs is an accurate way.
- These issues need to be written down and accompanied by photos and a date-stamp which can stored and accessed by all parties.
- Once the lease period has expired, the photos can then be referred to with the current state of the property and compared.
If items are damaged
- If there are damages then quotes and invoices need to be sourced by the tenant or landlord for the repair in question and prove that the amounts deducted from the deposit are accurate and fair.
- A Tenant needs to accept that if they are responsible for damage to the property or due to negligent behaviour it falls under their responsibilities according to the lease
Make sure your eviction process is legal
Evictions are never easy and should always be seen as a last resort, always try to come to terms with your tenant before moving into the legal process of eviction. If however, you feel like you have no choice, it is best t contact a professional eviction lawyer who can guide you through the process of a residential eviction.
Contact us
If you need advice on your eviction case or would like us to represent your eviction case, get in touch with Le Roux Attorneys
May my landlord under lockdown regulation 1 use my deposit as payment for my rent if I have been unable to pay the full amount.
May he use it to cover legal fees he incurs
Please call me need some advice on business matters:1.my Landlord threatens to close my business cause of rent due during thus covid month and was paying electricity even though the city is closed to issue statements. 2.last year i paid deposit to another landlord without occupying the place they wanted me to do an oil trap while busy arranging the oil trap they wanted me to pay rent without working there then immediately they cancelled my lease and they take 65% of my deposit. Please help
We are tenants in shopping mall from 2005 to2018 we received no interest on òur deposit what recourse do we hsve
One of the most prominent and leading, established property agencies in Durban who have managed my property that I have rented for 10 years advised that the interest on my rental deposit is R163! With the explanation that the deposit was in an interest bearing account but was earning 0%! So RHT when lock down over!
Can I plant deduct a storage fee from deposit for furniture left behind after lease ended and tenant moved.