Rental Housing Act Gets Teeth
Rental Housing Act – Whether you are a landlord or a tenant, you will be aware of the legislative environment that protects you when it comes to letting out your property or occupying a property as a tenant. Both parties have rights, and the law seeks to ensure that neither finds their rights abused or ignored. The Rental Housing Act 50 of 1999 sought to regulate the relationship between landlord and tenant. However, because the Act has proven difficult to enforce and thus weak from a practical and statutory standpoint, the Rental Housing Act Amendment 35 of 2014 was enacted. It has yet to be gazetted.
The Amendment Act has strengthened the rights and obligations that apply to both landlords and tenants, tightened up the rules surrounding inspections, deposits, the condition of a property and what should be included in the lease; and it has enhanced the powers of the Rental Housing Tribunals. Let’s have a look at these key areas in turn.
South Africa is suffering from a severe shortage of quality housing. There are still far too many people living in sub-standard accommodation. The government is committed to promoting rental housing, and has a duty to ensure fair and equitable treatment of tenants, particularly the most vulnerable. However, it also recognises that property owners are entitled to security of their dwellings and have the right to protect their assets from abuse. The provisions of the Act seek to balance these two priorities.
- Deposits: A landlord is entitled to a deposit before a tenant moves in, and this must be held in an interest bearing account . The Act does not stipulate the amount of the deposit, but in practice it is usually equivalent to one month’s rent. The landlord must give the tenant a written receipt for the deposit, and indeed for any other payments made. The tenant may ask the landlord to provide written proof of the interest earned on the deposit; and when the tenant moves out the deposit plus accrued interest must be repaid within seven days.
- Inspection: In an effort to reduce conflict that arises over damages, the Act appears to have borrowed from the car hire industry! Both landlord and tenant must inspect the property together at the beginning of the lease and record any faults. They can decide together if the faults merit repair by the landlord, or if they can just be noted. For example, a leaking shower should be fixed to avoid danger and inconvenience to the tenant and water damage to the property. Scratches on paintwork may be merely registered so the tenant is not held responsible at the end of the lease. When the lease ends, the tenant must be available to conduct a final inspection with the landlord, to identify any damage that may have been caused during the tenancy. The landlord is entitled to deduct the cost of repairs from the deposit.
- Condition of the property: This provision is undoubtedly an attempt to ensure that unscrupulous landlords do not attempt to pass off uninhabitable dwellings to desperate or vulnerable tenants as suitable for occupancy. The property must be ‘habitable’, which is defined as having adequate space and protection from the elements, being safe and secure and structurally sound. A landlord who fails to comply with this requirement can face a criminal charge.
Get it in writing
When we’ve written about good letting practice in the past, we’ve advised that a written lease is always a good idea, but it was not previously a requirement in law. The Amendment Act changes that. It is the landlord’s responsibility to provide a written lease contract, and, as with the habitability clause, failure to do so is a criminal offence. The Act stipulates what should appear on the written lease, and this formalises what we have always recommended:
- The names and addresses of both landlord and tenant;
- A description of the property;
- The agreed rent, how much and when it may increase (e.g. by 10% at annual renewal), and the frequency of payment (monthly, quarterly, etc.)
- The deposit amount;
- The notice period for quitting the property (applicable to both parties)
- Information on the rights and obligations of the tenant and landlord, in other words what each party is responsible for, e.g. utilities, maintenance, etc. (usually, tenants pay for charges related to things they use, such as water and electricity, and landlords pays for charges related to the property, such as rates);
- Information on the amount of any charges the tenant must pay over and above the rental cost;
- A list of defects drawn up during the joint inspection (mentioned above) when the tenant moves in. This should be signed by both parties and attached to the lease
Who can help?
The Amendment Act requires Rental Housing Tribunals to be established in all provinces, however, in the Western Cape we are fortunate to have a fully operational Rental Housing Tribunal. It can advise you of your rights and responsibilities as a landlord, and can help in the event of a dispute with a tenant.
Or contact us. At Simon Dippenaar & Associates we are specialists in property law. We act for both landlords and tenants and therefore know the challenges faced by both parties; and we know the legislation as it affects both sides.
Call us now on 087 550 2740 or email firstname.lastname@example.org if you need help ensuring you comply with the Rental HousingAmendment Act 35 of 2014 when it comes onto the statute books. Don’t leave it until the law is in place.
Let us review your tenancy agreements now and help you draw up written leases where none are in place.