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Information on the rights and obligations of landlords renting out residential property to tenants.
  1. Can I perform a credit check on my prospective tenant?
  2. My estate agent is finding the tenant – am I entitled to see the tenant's credit report?
  3. Should the lease agreement be verbal or written?
  4. Who should I ask to sign the lease agreement?
  5. How much deposit should I hold?
  6. Am I obligated to pay the tenant interest on the deposit?
  7. What are my obligations in terms of maintaining the property?
  8. Am I entitled to inspect the property?
  9. If the tenant has not paid rent – when is it considered late?
  10. What can I do if the tenant does not pay the rent?
  11. Can I lock the tenant out the property if rent is not paid?
  12. Can I disconnect the water & lights if the rent is not paid?
  13. Can I cancel the lease early?
  14. Must I perform incoming and outgoing inspections with the tenant?
  15. Refunding the deposit



CAN I PERFORM A CREDIT REPORT ON MY PROSPECTIVE TENANT?

Yes, TPN recommends that landlords perform a credit report on all adults over the age of 18 applying for rent.

In terms of the National Credit Act Regulations 18 (4) (e) and (5) you must first obtain the consent of each applicant before you access their credit report. TPN has drafted the consent clause for your use.

If the applicant tenant refuses to provide consent for you to perform his / her credit check – you are then not entitled to access the credit report. It is recommended that you decline the tenant’s application for rent.


MY ESTATE AGENT IS FINDING THE TENANT – AM I ENTITLED TO SEE THE TENANT'S CREDIT REPORT?

Yes, the estate agent is acting as an agent for the landlord. Ultimately the landlord takes the risk should the tenant default on the rent. Every landlord has a different appetite for risk and will accept or decline the applicant tenant based on the credit report, affordability assessment and any other relevant information.

The landlord can and should demand to see the all applicant tenant's credit reports before making a decision to accept the tenant.


SHOULD THE LEASE AGREEMENT BY VERBAL OR WRITTEN?

A verbal lease agreement is binding. However a written lease agreement is advisable as this protects both the tenant and the landlord in the event of a dispute.

In terms of the Rental Housing Act, the tenant can demand the lease is reduced to writing.


WHO SHOULD I ASK TO SIGN THE LEASE AGREEMENT?

Any one over the age of 18 may sign a lease agreement.

TPN recommends that all adults over the age of 18 should be jointly and severally liable for the rent. History shows that spouses have been known to hide behind each others credit profiles - there have also been cases of siblings, co-workers and even friends entering into lease agreements where only one tenant signs the lease but all the habitants will pay their portion of the rent. If all the habitants do not pay their portion – then the landlord can only sue or blacklist the tenant who signed the lease agreement. This limits the landlord's ability to recover non-paid rent.


HOW MUCH DEPOSIT SHOULD I HOLD?

The tenant and the landlord will negotiate this up-front. The amount of deposit due will be written in the lease agreement.

The landlord is entitled to negotiate what ever deposit he / she deems fit. It is common for the landlord to require one months rent or a double deposit (2 months rent). The landlord could even require a triple deposit if the tenant's credit report is considered risky.

However once the amount of the deposit has been agreed, the landlord cannot demand a bigger deposit during the term of the lease – unless the tenant agrees.

Practically, the landlord should not hand over the keys to the property until the agreed deposit and first months rent has been paid (and cleared in the case of a cheque).


AM I OBLIGED TO PAY THE TENANT INTEREST ON THE DEPOSIT?

In terms of the Rental Housing Act, if the landlord holds the deposit, he / she must invest the deposit in an interest bearing account with a minimum rate of interest applicable to a savings account.

The tenant is entitled to request written proof of the interest earned and if requested, the landlord is obliged to provide such proof.

Please also refer to the section on Refunding the Deposit.


WHAT ARE MY OBLIGATIONS IN TERMS OF MAINTAINING THE PROPERTY?

Common law states the landlord must hand over and maintain the property fit for the purpose for which it was let.

However many lease agreements deal with maintenance of the property differently. It is advisable to ensure you have read the “Maintenance” clause of the lease agreement carefully to ensure you are aware of your obligations.

Most lease agreements provide that the landlord is responsible to maintain the structure of the property and any electrical, plumbing or electrical apparatus which was not damaged by the tenant. Generally the tenant is responsible to maintain the inside of the property “fair wear and tear” excluded. If the property has a garden or pool, it is common that the tenant is responsible to maintain the up keep of the garden or pool. Remember – it is important to refer to your written lease agreement.


AM I ENTITLED TO INSPECT THE PROPERTY?

Yes, the landlord or estate agent has a right to enter the property to perform routine inspections and so on, but only after arranging with the tenant to do so at a reasonable time, and with reasonable notice. The tenant does not have the right to deny the landlord or estate agent reasonable access.

The landlord may not demand over-zealous access to the property as this would interfere with the tenant's right to peaceful enjoyment of the property.

Of specific importance, in terms of the Rental Housing Act, the tenant and landlord (or estate agent) must jointly perform incoming and outgoing inspections. This is to place on record any defects and subsequent damage for which the tenant may be liable.

If the landlord (estate agent) does not perform the outgoing inspection within 3 days of the expiration of the lease, it is deemed the property was handed back in good order and the landlord will have no further claim for damages.

However, if the landlord attempts to make arrangements for the outgoing inspection and the tenant fails to respond, the landlord can access the property within 7 days of the expiration of the lease to assess for any damages and apply the costs for repair against the deposit.


IF THE TENANT HAS NOT PAID THE RENT – WHEN IS IT CONSIDERED LATE?

The landlord is entitled to receive the proper amount of rent paid by the tenant at the proper place and time.

The lease agreement will note the rent due date. Most lease agreements state the rent is due and payable in full, free from deductions on or before the 1st of each and every month. The tenant would then be in breach of contract if the rent was still outstanding on the 2nd of the month.

The lease agreement will determine the payment date – a tenant and landlord might negotiate that the rent is paid on the 15th of the month. If so, the tenant's rent only becomes due on the 15th and if not paid on the 16th – the tenant is in breach of contract.

There is no law which provides the tenant a 7 day grace period to pay their rent.


WHAT CAN I DO IF THE TENANT FAILS TO PAY RENT?

If the tenant does not pay the rent, the tenant is in breach of contract (written or verbal).

Practically the first step of action is to make contact with the tenant to establish the reason for non-payment. You will know your tenant and be able to read if this is a once-off situation or if the tenant routinely pays late or only partially.

It is important to read the specific lease agreement's rent due and breach clauses as there are different ways to remedy the breach of non-payment. Either you may cancel the lease forthwith or you are required to demand payment in writing giving the tenant 7 days to remedy, failing which to cancel the lease.

If the rent is late (see section above), the landlord must demand payment giving the tenant a certain number of days to settle. The number of days is determined by the lease agreements breach clause.

Should the tenant fail to settle after the demand, the landlord is entitled to cancel the lease and demand the tenant vacates the property.

Should the tenant fail to vacate the property as requested, then the landlord must take legal action to obtain a court order Eviction, after which the Sheriff of the Court will forcible remove the tenant.


CAN I LOCK THE TENANT OUT OF THE PROPETY IF THE RENT IS NOT PAID?

No, this is a criminal offence in terms of the Rental Housing Act.

The landlord (or estate agent) can not change the locks, remove the front door or take any action which effectively locks the tenant out from the property or denies him peaceful occupation of the property without a court order.

The landlord does have legal remedy via the courts to obtain legal eviction of the tenant. It is therefore advisable to take immediate action against delinquent tenants.


CAN I DISCONNECT THE WATER AND LIGHTS IF THE RENT IS NOT PAID?

No, it is a criminal offence in terms of the Rental Housing Act for the landlord (or estate agent) to disconnect utilities. Only a service provider, such as the Municipality or Eskom may disconnect services due to non-payment of those services.


CAN I CANCEL THE LEASE EARLY?

Refer to the lease agreement, specifically to any cancellation clause.

If the lease agreement is month-by-month, then a calendar months notice is required to cancel the lease.

If the lease agreement is for a fixed period and there is no cancellation clause (for example: in the event of the property being sold or if the landlord wants to take occupation himself), then the landlord cannot cancel the lease unless the tenant breaches the lease.


MUST I PERFORM INCOMING AND OUTGOING INSPECTIONS?

In terms of the Rental Housing Act, the tenant and landlord (or estate agent) must jointly perform incoming and outgoing inspections. This is to place on record any defects and subsequent damage for which the tenant may be liable.

If the landlord (estate agent) does not perform the outgoing inspection within 3 days of the expiration of the lease, it is deemed the property was handed back in good order and the landlord will have no further claim for damages.

However, if the landlord attempts to make arrangements for the outgoing inspection and the tenant fails to respond, the landlord can access the property within 7 days of the expiration of the lease to assess for any damages and apply the costs for repair against the deposit.


REFUNDING THE DEPOSIT

Refer to sections on incoming and outgoing inspection and interest earned on the deposit.

Further, the landlord can apply the deposit to any amount due by the tenant - outstanding rent or utilities, reasonable payment for damages to the property (for example: cleaning of carpets, lost keys or remotes and returning the state of the property back to its original state at the beginning of the lease), fair wear and tear excluded.

If during the outgoing inspection, it is established there are no damages, the deposit must be refunded within 7 days of expiry of the lease.

If during the outgoing inspection, damages are noted, the balance of the deposit must be refunded within 14 days of restoration of the property.

If the tenant fails to attend the outgoing inspection, the balance of the deposit must be refunded within 21 days of the expiry of the lease.

The tenant is entitled to all receipts for the cost of repairing any damages.