Notice to South Africans: Please visit sacoronavirus.co.za for up to date information on the COVID-19 outbreak.
Tag

lease agreement Archives | Eviction Lawyers South Africa

What’s covered by the rental deposit

By | Lease Agreement, Rent, Rental deposit, Rental Housing Act

This article, from the Personal Finance section of Independent Online, is a clear and helpful explanation of the purpose of the rental security deposit.

rental deposit
File Image: IOL

Reprinted from iol.co.za – 2020-10-06

Following a period of lockdown restrictions that put severe pressure on the income levels of many households, some landlords have had to go through the costly process of applying for a court order to evict defaulting tenants. Adrian Goslett, regional director and chief executive officer of RE/MAX of Southern Africa, explains that the rental deposit exists largely to protect the landlord against defaulting tenants and the lengthy, expensive process that is involved to evict them.

According to Goslett, tenants are protected by the Prevention of Illegal Eviction from Unlawful Occupation of Land Act, No. 19 of 1998, also known as the PIE Act. If the correct procedures are followed, it can take at least eight to 10 weeks for an eviction order to be granted during which time the landlord is out of pocket. “Besides the fact that the landlord is not getting a rental income from the defaulting tenant during that period, they will also have to pay legal costs. An unopposed eviction could cost between R12 000 and R20 000 in legal costs plus disbursements, while the cost of an opposed matter will be substantially more. Section 5 of the Rental Housing Act, No. 50 of 1999 states that a landlord is legally entitled to request a deposit from their tenants. This deposit can be used to help cover these legal costs,” he explains.

With this in mind, most landlords request a deposit from their tenants before they move into the property. The amount that the tenant will be required to pay as a deposit is stipulated in the lease agreement. Conventionally, the rental deposit amount is equal to anywhere from one to even three months’ rent.

“When a tenant pays the deposit, the landlord is required by the Rental Housing Act to place the money in an interest-bearing account, held with a financial institution. The tenant is within their rights to request a statement of the interest earned on the money at any time during their tenancy. Even though the deposit is paid to the landlord, it remains the tenant’s money. The landlord is merely holding the money as a security measure, should the tenant default or breach the rental agreement. If the tenancy runs its normal course, the deposit along with all interest earned on the money must be paid over to the tenant at the end of the lease agreement period,” says Goslett.

However, he warns that the landlord is entitled to deduct from the rental deposit any expenses incurred repairing any damage to the property which occurred during the tenancy. “The remainder of the money must then be refunded to the tenant no later than 14 days after the restoration of the property as dictated by the Act. If repairs are done, the tenant can request to see all repair receipts to confirm that the money was spent to repair the damage they did to the property. The landlord cannot use the deposit for general maintenance or upkeep of the property. If there is no damage to the property, the full deposit and interest must be paid to the tenant within seven days of the lease’s expiration date,” he explains.

Should any disputes arise between the landlord and the tenant regarding the rental deposit, Goslett recommends they can turn to the province’s Rental Housing Tribunal. “The tribunal assists to mediate and resolve disputes between the parties. Before entering into a rental agreement, both the tenant and the landlord should familiarise themselves with their legal rights regarding the tenancy and the rental deposit. Knowledge of the relevant procedures can help prevent unpleasant and costly disputes down the line,” he said.

Links added by SD Law.

Do you have questions about your lease agreement or rental deposit?

Whether you are tenant or landlord, if you have questions or concerns about your existing lease agreement or security deposit, contact Eviction Lawyers for a confidential discussion. We will explain your rights and responsibilities to ensure a worry-free tenancy. Contact Simon now on 086 099 5146 or email him on info@sdlaw.co.za.

Further reading:

How to evict a tenant without a lease

By | Evictions, Lease Agreement

Tenants have rights with or without a written lease

No lease? No change to the eviction process. Eviction lawyers

Your arrangement with your tenant is not working out, and you’ve reached the point where you are considering eviction. But you don’t have a written lease agreement and you’re not sure how to evict a tenant without a lease. What now?

Firstly, you cannot take the law into your own hands. You must follow the correct process if the eviction is to be deemed lawful. Whether or not there is a written lease agreement, if a landlord allows someone to reside on a property and accepts rent, that is regarded as a de facto lease and is binding.

This scenario will soon change, however. The as yet un-gazetted Rental Housing Amendment Act 35 of 2014 compels landlords to have a written lease agreement in place and is just one of the regulations that will further protect the rights of tenants and reinforce the obligations of landlords. 

Landlords and tenants will have six months to comply with the provisions of the Act once the new legislation comes into effect. All new lease agreements must be in writing and verbal agreements will no longer be binding.

Allow time to remedy a breach of contract 

If the tenant is in breach of a rental agreement, the landlord must notify the tenant in writing and allow them to remedy the situation. This might happen if there is excessive noise, there are pets on the property without permission, or rent is in arrears. Unless specified in the lease agreement, a tenant has 20 working days to rectify the breach in accordance with the Consumer Protection Act (CPA). In the case of a verbal agreement, or if the lease has expired but the tenant still lives on the property with the landlord’s permission on a month-to-month basis, the landlord must afford the tenant one calendar month’s notice to make good the situation.

If the tenant fails to repair the breach within the specified time period and the matter cannot be settled, the next step is for the landlord to issue the tenant with a letter cancelling the lease. With a bit of luck, the troublesome tenant will vacate the property at the end of the notice period. However, if the notice of cancellation is ignored and the tenant refuses to leave, the landlord may have no choice but to apply to the court for an eviction order. 

The steps to eviction with or without a written lease

An eviction order will be served 14 days prior to the court hearing and, if the tenant is unable to present a valid defence at the hearing, a warrant of eviction will be issued allowing the sheriff to remove the tenant’s possessions from the property. If the tenant does present a valid defence at the hearing, a trial date will then be set.

Removing a recalcitrant tenant can be extremely frustrating, but failure to observe legal processes will result in an unlawful eviction and possible criminal action. 

The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 1998 (PIE) sets out strict procedures on how to properly evict unlawful occupiers from residential properties, while prohibiting illegal evictions. It is not permissible to change the locks or turn off the water and electricity. A landlord who does not comply with PIE could face a fine or up to two years imprisonment, so it’s best to hire an eviction lawyer at this stage to ensure the correct procedure is observed.

Keep on the right side of the law

Tenants or landlords may decide to terminate a lease agreement for many reasons, but, whatever the grounds, both parties must act within the law. Simon Dippenaar and Associates are expert eviction lawyers who will ensure the correct procedures are followed every step of the way. We will assist with eviction notices and court appearances to secure a satisfactory outcome. Call us on 086 099 5146 or email sdippenaar@sdlaw.co.za.

Further reading:

Month-to-month lease – how do you cancel?

By | Eviction notice, Evictions, Lease Agreement, Rental Housing Act

Month-to-month leases are governed slightly differently from fixed-term leases

There are multiple reasons why a tenant might have a month-to-month lease. The most common scenario is when the fixed-term lease has expired and the tenant remains in the property. According to the Rental Housing Act, if no renewal has been requested by either party and no notice to quit the premises given by the landlord, the lease automatically rolls over into a month-to-month lease on the same terms and conditions as the expired fixed-term lease. The landlord and tenant may have had a conversation and agreed this arrangement verbally, possibly because the tenant is awaiting a moving-in date to a new home or is unsure of future plans. They may have applied for a job in another town and are waiting on the outcome. In these situations, a new fixed-term lease might not be appropriate.

The converse may also apply: a tenant is new to the area, having relocated for work, and is looking for a home to purchase or a suitable long-term rental, and in the short term just needs temporary accommodation, but cannot be certain of the duration. In this case, a month-to-month lease would be a useful option.

What then happens when either party wishes to terminate the agreement? Section 14 of the Consumer Protection Act (CPA), normally takes precedence over the Rental Housing Act, but does not apply to month-to-month leases.

What the Rental Housing Act says

As stated above, if the tenant occupies the property after expiry of the lease, the tenancy agreement continues as it was, except that the duration of the lease becomes one month. In other words it is now a month-to-month lease. In this case, the notice period for cancellation by either party is one month. However, this does not apply to cancellation due to breach of the lease agreement (e.g. non-payment of rent). Remember, even if no written lease is drawn up detailing the month-to-month arrangement, the terms and conditions of the earlier lease still apply, and therefore any breach of those conditions is legitimate grounds for a landlord to cancel the lease.

What the CPA says

The CPA, more specifically Section 14 of the CPA, requires the landlord to give 20 business days’ notice of cancellation of the lease (effectively a calendar month). But this applies only to fixed-term leases. A month-to-month lease is exempt from Section 14. However, if the landlord is giving notice to cancel due to a breach, then Section 14 does apply, and the landlord must give 20 business days’ notice to remedy the breach. Only if the breach is not rectified in that time period may the landlord begin the eviction process.

If the tenant wishes to cancel the lease, for example if they have found that dream home they were searching for, they must give 20 business days’ notice (one calendar month) to the landlord. If a tenant cancels the lease without giving the requisite notice, they are in breach of the CPA and of the common law. In this instance the landlord may either:

  • Accept the cancellation, but hold the tenant liable for the rent until a new tenant is found; or
  • Refuse to accept the cancellation and compel the tenant to honour the lease.

With a month-to-month lease the outstanding lease period can’t be more than one month.

Let eviction attorneys help

SD Law is a firm of eviction lawyers who know rental housing law inside and out. We look after the interests of both landlords and tenants. Our priority is upholding the law and ensuring everyone’s rights are protected. If you have a question regarding your month-to-month lease, or any other aspect of rental housing legislation, contact Simon on 086 099 5146 or email sdippenaar@sdlaw.co.za for a confidential discussion.