Home Rental FAQ Guide

1. What questions must a landlord ask their rental estate agent?
  • A good rental agent can save a landlord a tremendous amount of frustration and time, provided of course the landlord chooses to work with the right agent

    When it comes to selecting a rental agent there are vital questions that landlords should ask that will assist them in vetting each agent and ultimately making the right decision.

    How long have you been handling rentals?

    Almost every estate agency can assist with rentals, however not all have a designated rental specialist in their office. Be very careful of an estate agent who does not specialise in rentals. Certain estate agencies only take on rentals to boost cash flow and to leverage sales. When this happens, the rentals are often handled by an inexperienced admin person and the rental properties treated as a ‘sideline’ business – never use a sales agent to do a rental agents’ job.

    While many real estate sales agents turn into rental agents it does not mean they have the crucial experience needed to troubleshoot numerous potential curveballs within the property rental sector.

    What qualifications do you have and how often do you update your expertise?

    Landlords should ensure that the rental agent they choose to work with has some qualification or updates their expertise regularly.

    It is vital that the rental agent has a full understanding of rental legislation and can explain each and every clause within the lease agreement. A knowledgeable agent will be far more equipped to protect the landlord from questionable tenants and from unnecessary cost by distinguishing between the obligations of tenants and landlords.

    Landlords should ask their agent when last they were on any credible course and how they are qualified to be in the fiduciary position they are portraying.

    What is your current arrears rate?

    An arrears rate for a rental agency should be no more than 3%. If it is higher, the landlord may be facing an inefficient agent. It goes without saying that a very low rate will indicate a well-run system and a good agent to use.

    Be wary of agents that are not willing to disclose this information to you.

    Do you offer legal backup and services?

    A very valuable service to enquire about is the relationship the rental agent has with legal professionals. Ideally, any rental agent should have a lease set up with legal input from professionals and offer some form of legal assistance in the event of a dispute in a lease scenario. A good agent will include these added value services into their fee.

    How do you handle arrears?

    Landlords should ensure that the rental agent they are questioning answers this with specifics and conviction. A clear process and system needs to be followed when a tenant fails to pay his rent timeously. He warns that failing to promptly inform a tenant of their obligations and breach can result in delays to legal action. Tenants have to be informed of their breach in good time to avoid delays in further legal action, which could save landlords a significant amount of lost revenue from unpaid rent and lengthy court action.

    Do you have a list of client testimonials and can clients be contacted for references?

    Anyone can paint a masterpiece of their abilities and credibility, but the best way to prove this is through testimonials. If an agent is exceptional, the compliments from clients will be numerous and generous. A good agent will keep a list of these testimonials and chances are good most can be contacted to discuss the service.

    Where do you advertise properties?

    The best agents will also advertise on premium sites where listings are paid for, and not only on free classified sites. This attracts a good cross section of tenants to ensure the calibre of tenants is high. Good agents will advertise on these sites and will have a social media pages on Facebook, Twitter, Instagram and a website.

    Do you offer rental guarantees?

    This is a valuable service for landlords who simply cannot afford any loss of income from a delinquent tenant. He explains that good rental agencies will be able to offer a service underwritten by an insurer where the rental income is guaranteed for a period of time. Naturally this service comes at a premium, but may be worth the extra cost.

    Am I in a position to give you notice if you do not perform?

    Agents have a fiduciary responsibility in terms of the Code of Conduct of Estate Agents to perform their duty.

    Landlords should make sure that they work with an agent who, if they are not performing in terms of their mandate, may be put to terms and even fired if the job is not done properly.

    With the rules constantly changing within the rental sector, a credible and experienced rental agent can be a valuable ally in this game. Asking the above questions will help to ensure that the landlord makes the best decision for the management of their rental portfolio.

2. What happens when your lease agreement ends?

– Your lease agreement is coming to an end and it’s time to decide whether to sign on for another year, to stay on a month-to-month basis, or to move on and terminate your lease agreement. Natasha Wright, of Pam Golding Properties’ rental division, explains the timeline of events when a lease agreement expires.

The Consumer Protection Act (CPA) requires the Landlord to give the Tenant written notice of not less than 40 days and not more than 80 days before the lease expires, to decide whether they are going to renew their lease agreement or not. Any new terms and/or material changes to the lease agreement such as the rental increase and extended lease period, must be included in the notice. There is usually also an administrative fee associated with the lease renewal and an increase in the deposit amount.

Most lease agreements will include a clause, specifying how much notice you are required to give if you are going to extend your lease, or terminate your contract. This is usually 30 days.

 

Exit inspections – last month of lease

 

Now is the time to do an exit inspection with your landlord or agent, to discuss any repairs or cleaning that needs to be done. Remember, it is mandatory for you and the landlord to inspect the property before occupation as well, to determine whether there are any defects or whether repairs are needed. This protects you, as the tenant, from being liable for any repairs that need to be done when you move out. They also give the landlord recourse if the property is not in the same condition as it was when you took occupation.

It gives you and the landlord an opportunity document any structural damage or defects during the ingoing inspection by taking photographs and including these with a written list of concerns which must be attached to the lease agreement. You can then refer to this list when you and the landlord conduct your outgoing inspection, usually within three days before the expiration of your lease.

If the inspection does reveal any damage, other than day-to-day wear and tear, you as the tenant are required to pay for these repairs, and the landlord is entitled to deduct the cost from your deposit and accrued interest. Your lease agreement stipulates that you are to return the property in an acceptable condition.

 

Two weeks after the lease has expired

 

If repairs are not needed, and there are no outstanding amounts owed to the landlord or agent, you should receive your full deposit and interest accrued during the lease period, within seven days.

Note that if there was no joint ingoing inspection, the landlord has no further claim against you if there is any damage when you move out.

If repair work needs to be done, the landlord will refund the balance of your deposit within 14 days. Your landlord must also provide receipts of all the repairs done, as proof of the costs incurred.

Disputes related to claims against your deposit, assuming that there was a joint ingoing and outgoing inspection, can be referred to your regional Rental Housing Tribunal.

2. How do you negotiate a fair rental increase?

– While some tenants might dread the annual rental increase, they are a fact of life and a vital tool for landlords when it comes to covering expenses and protecting their investment. Often times having a conversation about rental increases are uncomfortable and getting both parties to agree on a reasonable escalation isn’t easy. However, a fair negotiation is in the best interest of every party involved.

 

The 10% increase myth

 

A lot of people are still under the impression that a 10% annual rental increase is standard, the reality, however, is that there are no legislated standard figures – increases are set on a case by case basis.

This doesn’t mean that landlords can simply pick a number and force a tenant to accept the increase.

All rental increases need to be reasonable, the Rental Housing Tribunal is very clear on this. Therefore, any escalation figure needs to be backed up with properly researched trends and figures.

 

Not just about the numbers

 

Good tenants, who look after your property, pay on time, and communicates well with you or your managing agent can be worth their weight in gold. This is even more true during periods of economic crunch and when tenants in good standing are few and far in between.

For tenants, paying on time is one way of ensuring a better footing when rental increases are being negotiated. Other things that you can do to help you become an exemplary tenant is by being proactive with day-to-day maintenance chores and minor fixes. If you call the landlord for every little thing that needs to be replaced they won’t be too sad to see you go.

 

How to determine reasonable increases

 

Even in traditionally strong markets, it is still very easy to lose a tenant due to unreasonable rental escalations. So how do you go about determining what is reasonable and what is not? And what’s the best way to weigh up the benefits of retaining an existing tenant against the disadvantages of reduced escalation?

This can be very hard to determine for someone that is a new landlord and we would suggest that you work with a rental agent to help you manage your property and that can give you advice on crucial matters like these. For more seasoned landlords we would suggest using services that specialises in the rental market. They usually have in-depth market reports that will allow you to see what the market is doing in terms of rental demand, increases or decreases in rental prices and what percentage of tenants are in good standing.

You will have to have a workable knowledge of the area that your property is located in and what rental prices in the area look like. Keep in mind that your tenant can do a property search and see the average price of rentals in an area and they will know if your escalation is extreme.

Have a conversation with your tenant and talk about the different options they have in a fair escalation. Look at their payment history and take it from there.

Remember to have all the information in the new contract and make sure to have it signed.

3. What type of complaints may be lodged with the Rental Housing Tribunal?

A complaint about unfair practice may be lodged by a tenant or a landlord of a property (for example, a house, room or flat), for example:

 

  • Unacceptable living conditions, such as overcrowding or hygienic issues.
  • Insufficient maintenance or repairs of a property.
  • Not paying rent to the landlord.
  • Asking an excessive amount of rent.
  • Not refunding a deposit of the tenant.
  • Damage to a property (for example, a door of the landlord or a table of the tenant).
  • Eviction without a court order.
  • Disconnection of services (such as electricity) without a court order.
  • Non-compliance with the Rental Housing Act.
  • Not issuing a receipt to a tenant in respect of payment made.
  • Discrimination by a landlord on ground of race, sex and so on, of a tenant.
4. How can I end my lease early

It depends on the cancellation clause in your agreement. If there is no such clause, the only way you can end your lease early without being in breach of contract is if your landlord agrees to it or if your landlord is in material breach of the lease (for example, by failing to maintain the outside of the property, as agreed in the contract, and this makes it impossible for you to remain on the property. But you will have to prove this, though).

You can still end the lease early in terms of the Consumer Protection Act [68 0f 2008]. Section 14 allows for the tenant to prematurely cancel a fixed lease [by given 20 business days notice] however it should be noted that the landlord may impose a reasonable cancellation penalty . It should be noted that this penalty amount should not be to punish the tenant but reflect reasonable costs in securing a replacement tenant.

5. Do I have to sign a written lease?

A verbal agreement is as binding as a written lease, however a written lease is much more preferred in order to protect both tenant and landlord.

Your agreement should set out in writing the terms and conditions agreed upon. This will go a long way to preventing later disputes, and to avoid hearsay situations.

6. What information should be in a lease?

A lease should have all the following information

 

  • Landlords name
  • The tenant’s name
  • Landlords postal address
  • Tenant’s postal address
  • The address of the property being leased
  • The amount for which the landlord will rent it out
  • The amount by which the rent will increase (for example, by 10 percent when renewing the lease)
  • When the rent will increase (for example, if there is a rates increase)
  • How often rent is to be paid, (for example, monthly)
  • The amount of the deposit, if any
  • The landlord’s and tenant’s obligations (for example, who is responsible for maintenance? Who will pay the water, electricity and rates bills? Usually, the tenant pays for charges related to consumption, such as water and electricity, and the landlord pays for charges related to the property, such as rates.)
  • The conditions under which either you or your tenant can give notice to cancel the contract
  • The House rules, signed by both parties, should be attached to the lease.
  • A list of defects drawn up during a joint inspection when the tenant moves in. This should be signed by both the landlord and tenant and attached to the lease.
7. What information should be in a lease?

A lease should have all the following information

 

  • Landlords name
  • The tenant’s name
  • Landlords postal address
  • Tenant’s postal address
  • The address of the property being leased
  • The amount for which the landlord will rent it out
  • The amount by which the rent will increase (for example, by 10 percent when renewing the lease)
  • When the rent will increase (for example, if there is a rates increase)
  • How often rent is to be paid, (for example, monthly)
  • The amount of the deposit, if any
  • The landlord’s and tenant’s obligations (for example, who is responsible for maintenance? Who will pay the water, electricity and rates bills? Usually, the tenant pays for charges related to consumption, such as water and electricity, and the landlord pays for charges related to the property, such as rates.)
  • The conditions under which either you or your tenant can give notice to cancel the contract
  • The House rules, signed by both parties, should be attached to the lease.
  • A list of defects drawn up during a joint inspection when the tenant moves in. This should be signed by both the landlord and tenant and attached to the lease.
8. Should I ask for a deposit?

– Yes, it’s a good idea to put it in the lease. Remember that the deposit must be put in an interest-bearing account for the duration of the lease and given back to your tenant, plus the interest it has earned, when the tenant moves out.

If, however, your tenant still owes you money on moving out, or if the property has been damaged beyond normal wear and tear, you can use the deposit to pay for repairs or to cover the money owed to you.

It is common for the landlord to require one month’s rent or a double deposit (2 month’s 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, or the lease agreement makes provision for a top-up when the rent increases

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

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 landlord cannot contract out of this legal obligation.

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

If the deposit is held by the estate agent, this is regulated by the Estate Agents Affairs Act – read your lease agreement – some lease agreements provide that no interest is paid to the tenant and in this case, the estate agent does not need to refund the deposit with interest.

9. Can I increase the rent in the middle of the lease period?

– Not unless your lease agreement specifically says you can. If you want, you can add a clause to the initial agreement listing specific reasons that would allow you to increase the rent (for example, if the rates increase).

10. Can I evict my tenant?

– You can never evict a tenant yourself. You can only seek a court order to evict a tenant if your tenant is in breach of contract.

To find out if your tenant is in breach of contract, check your agreement. There should be a clause saying what constitutes a breach of contract and what your rights would be in such a case.

If your tenant is indeed in breach of contract, take steps to strongly urge your tenant to rectify the breach. If this does not work, take legal action – lodge a complaint with the Rental Housing Tribunal or seek the help of a competent attorney.

 

11. Can I enter the property without my tenant's permission?

You have a right to enter the property to perform routine inspections and so on, but only after arranging with your tenant to do so at a reasonable time, and with reasonable notice. Your tenant does not have the right to deny you reasonable access.

13. What can I do if my tenant damaged the property?

– If you asked for a deposit, you can use the money to repair damages attributed to the tenant beyond normal wear and tear when the tenant moves out. Be sure to follow these steps:

 

  • When your tenant moves in, inspect the property together and list, in writing, any existing defects – both should sign this and it must be attached to the lease agreement.
  • When your tenant moves out, inspect the property together again, ideally no earlier than three days before the tenant moves out.
  • Compare the new list of defects with the list you made earlier.
  • You may give the tenant a chance to do the repairs personally, or you can agree that you will do it. Hold on to receipts for repairs paid for out of the deposit. Your former tenant has a right to see them.

 

If repairs cost less than the deposit plus the interest accrued, you will have to reimburse your former tenant with the difference.

 

  • Contact the Rental Housing Tribunal if you have problems.
14. Can the landlord and/or estate agent do a credit check on me?

-Yes, it is recommended 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) the tenant must first give his / her consent before the landlord (estate agent) can access your credit report.

If you refuse to give consent for the landlord (estate agent) to perform your credit check – the landlord (estate agent) is entitled to decline your application for rent.

15. Am I allowed to know why my rental application was denied?

– Yes, reasons for rejecting your application for rent might include your credit profile, affordability or suitability such as “no pets” allowed in the complex.

Your application may not be rejected due to discrimination on the grounds of race, gender, sex, pregnancy, marital status, sexual orientation, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, language and birth.

16. To what extent should a landlord maintain a 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 and the landlord’s 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 you have not damaged.

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.

The landlord does not have an obligation to fix every item the tenant deems necessary. Items which render the property unfit for the purpose for which they were let, such as no water / electricity, a burst geyser, non-working oven etc. would need to be attended to by the landlord. However the landlord would not be obligated to fix items such as missing internal keys, blown light bulbs and squeaky doors.

Again, it is important to point out that many lease agreements provide for different obligations pertaining to maintenance – read your specific lease agreement to confirm your responsibilities and the landlord’s.

17. To what extent should a landlord maintain a 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 and the landlord’s 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 you have not damaged.

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.

The landlord does not have an obligation to fix every item the tenant deems necessary. Items which render the property unfit for the purpose for which they were let, such as no water / electricity, a burst geyser, non-working oven etc. would need to be attended to by the landlord. However the landlord would not be obligated to fix items such as missing internal keys, blown light bulbs and squeaky doors.

Again, it is important to point out that many lease agreements provide for different obligations pertaining to maintenance – read your specific lease agreement to confirm your responsibilities and the landlord’s.

18. Can a landlord cancel my lease when the property is sold?

The tenant is protected by the common law “huur-gaat-voor-koop.” If the property is sold, the new owner becomes the landlord and all the terms of the existing lease are enforceable.

The owner cannot cancel the lease, but must wait until the end of your existing lease period. The new owner is also responsible to refund your deposit less any claim for damage.

There are some exceptions:

 

  • If the lease agreement makes provision for the landlord to cancel in certain circumstances like the sale of the property
  • If the property sold on auction by the Sheriff of the Court

 

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