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News & Press: 2016 News Items

Landlords and tenants, take note of the Rental Housing Amendment Act

16 September 2016  
Posted by: Bert vd Heever
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“I am the owner of a number of properties which I let to tenants. I understand that the Rental Housing Act has been amended. What are the implications for me as landlord and my tenants?”

The Rental Housing Act (“Act”) governs the establishment of and the functions, duties and powers of the Rental Housing Tribunals. The Act also provides the necessary tools to deal with the relationship between landlords and tenants as well as the procedures to follow should a dispute arise between these parties.

The Act, however, had its shortfalls and the Rental Housing Amendment Act (“Amendment Act”) was promulgated - which will come into operation on a date yet to be proclaimed - to address many of these shortfalls. The major changes provided for by the Amendment Act will impact the rights and duties of tenants and landlords and the requirements that lease agreements must comply with. I hereafter briefly summarize the main elements of relevance to landlords and tenants under the Amendment Act.

Landlords are allowed to request payment of a deposit by a tenant before moving into the property but they have the duty to invest this deposit in an interest-bearing account with a financial institution, at an interest rate which may not be less than the rate applicable to a savings account with that financial institution. 

A tenant has a right to receive a written receipt from the landlord reflecting all payments made by the tenant and the tenant may request the landlord to provide written proof of interest earned on the deposit. The deposit together with the interest earned on such deposit, subject to deductions for damages, must be paid out to the tenant within 7 days of expiration of the lease.

Before the tenant takes occupation of the property, the tenant and landlord must jointly inspect the property for any defects or damages, in order to determine the landlord’s responsibility for rectifying any of these defects or damage and to keep a register of these defects or damage. At expiration of the lease the tenant and the landlord must jointly inspect the property again to establish if there was any damage to the property caused by the tenant’s occupation, within a period of three days prior to such expiration. The intention here is to establish if the tenant is liable to the landlord for any damages to the property, which damages the landlord can deduct from the deposit. 

Failure by the landlord to inspect the property with the tenant at the expiration of the lease, means that the landlord acknowledges that the property is in a good and proper state of repair and the landlord will have no further claim against the tenant and must refund the full deposit plus interest to the tenant. Should the tenant fail to respond to the landlord’s request for an inspection, the landlord must within seven days after the expiration of the lease, inspect the property in order to assess any damages or loss which occurred during the tenancy and may deduct from the tenant’s deposit the reasonable cost of repairing damage to the property and refund the balance of the deposit and interest not later than 21 days after expiration of the lease. The landlord must make available to the tenant the receipts which incidate the costs incurred by the landlord. Any balance remaining must then be refunded to the tenant within 14 days of restoration of the property.

The landlord also has a duty to make sure that the property that is leased is in a habitable condition as well as maintain the existing structure of the property and where necessary provide basic services to the property.

The tenant, together with members of the tenant’s household and visitors, have a right to privacy and should the landlord wish to inspect the property, the landlord must do so in a reasonable manner after reasonable notice to the tenant. 

The tenant will be liable to pay the rent on the date as agreed on and any other charges stipulated in the lease agreement for example water and electricity etc. The tenant will also not be in a position to sublet the property without the consent of the landlord, which may not be unreasonably withheld.

The Amendment Act provides that all lease agreements must be in writing. The Amendment Act goes further and places this responsibility on the landlord and provides for the minimum contents that a lease agreement should contain.

It also places a duty on the Minister of Human Settlements to develop a pro forma lease agreement in all 11 official languages that contains the content as prescribed by the Amendment Act and which can be used as the basis for a lease agreement by landlords.

The Amendment Act will have a major impact on tenants and landlords alike and dictates clear terms for the landlord and tenant relationship. Landlords and tenants alike will have to comply with these new requirements within six months from the date of commencement of the Amendment Act. 

Landlords are advised to consult a property specialist as soon as possible to update their pro forma lease agreement to ensure that it will comply with the new Amendment Act requirements as well as ensure that their processes for new and departing tenants are ready to avoid the hefty penalties that can be imposed under the Act once it is operational.


 

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