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A tenants deposit can be used for damage to the landlords rental property.
It is in both landlords and tenants interests to have this laid out in detail to avoid disputes that may arise at the end of the lease.

A general rule of thumb is that, if a tenant has damaged something that does not normally wear out, or the tenant has substantially shortened the life of something that does wear out, the tenant may be charged for the cost of the item. The landlord should take into account how old the item was and how long it may have lasted otherwise, as well as the cost of replacement.
For example, Ordinary wear and tear to carpets should not count against the tenant, however, large rips or stains would be considered damage. Any deduction for the tenant’s deposit should take into account the age of the carpets, compared with the expected total time of usage.

A landlord may also deduct cleaning costs, but only enough to cover the cost of getting the property cleaned to a satisfactory standard and as at time of the incoming inspection standard. Same condition as handed over.

Some practical examples of 'Fair Wear and Tear' would be:
The following would constitute damage and would be for the tenant's account:

The incoming inspection is vital as if not completed properly the tenant will be liable for items not stated therein.
3 days are allowed after the inspection to record per email any deficiencies at the property whereby this will be recorded.
The landlord is not obliged to make any additional repairs to the property and is not a repair list for them.

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It is in your interests as a tenant to do the following to receive back your full deposit:

  1. Return the dwelling in a neat and clean condition. A landlord is more likely to take a broad view about “fair wear and tear” if it is evident that you have treated his or her property with respect. Ensure that cupboards and built-in hobs and ovens are clean, and remove any mildew from bathrooms.
  2. It is crucial that you put all communication with your landlord about damage or repairs and maintenance in writing, supported by photographic evidence. Not only will this help to prevent misunderstandings or “things falling through the cracks”, but a well-documented paper trail will also be invaluable if a dispute arises.
  3. Report damage to the landlord timeously; do not hope that it will go unnoticed or that you can leave the problem until the end of the lease. Being open and upfront will facilitate trust between you and your landlord.
  4. If you damage the dwelling and undertake to have the damage repaired before the lease expires, ensure that you do not expose yourself to further liability by using unqualified contractors and inappropriate materials. You must come to a written agreement with your landlord about:
    • The number of quotations that should be obtained;
    • Whether you or the landlord will decide which contractor to use and on what basis (price, references, quality of finishes); and
    • What will constitute restoring the property to its original condition. Tenants can only be held liable for repairs and not improvements, unless expressly agreed with their landlord.
  5. Do not make any changes to the dwelling, including painting walls a different colour or knocking nails into walls, unless the lease agreement allows you to do so, or you have obtained the landlord's consent.
  6. It is responsibility of the tenant to maintain the dwelling and as outlined in any Lease Agreement in force. If the lease agreement contains such provisions, ensure that you understand your obligations. As is the case when undertaking repairs, ensure that you and the landlord agree in writing on how the maintenance should be undertaken.

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Source: Tenant Profile Network
Date: Apr 26, 2017

The obligations of tenants as well as landlords are covered in statutory, as well as non-statutory law in South Africa. Read more to get all the info you need about renting or letting property.

There are dozens of obvious and practical reasons why many individuals, families as well as businesses, rent property. For a start, renting provides the tenant with the benefits of fairly fast availability and choice. Although some may argue to the contrary, the flexibility enjoyed by tenants as a result of renting should be appreciated, as well as the relative freedom from unexpected or hidden costs and sudden market crashes. Tenants and landlords should enter into agreements with the intention of giving as well as getting reasonable value. In many cases, the attitude with which one approaches a deal will determine its long-term (or possibly short-term) viability and success.

Rather than the much misunderstood idea that renting property is “enriching somebody else” tenants should consider the benefits of renting and be willing to accept that in most cases, they are receiving a fair bargain. But like just about everything in life, even a bargain must be paid for. Hence the reasons why the obligations of tenants (as well as landlords) are covered in statutory, as well as non-statutory law.

Non-Statutory Law (Common Law)

The tenant is obliged to:

Common law states simply that the full rent must be paid at the proper time – the time and date agreed by both the tenant and the landlord. It does not provide the tenant with a 7 day grace period.

Statuary Law (The Rental Housing Act)

The tenant is obliged to:

The lease agreement

A lease can be in verbal written form. Obviously a written lease agreement is recommended as this clearly sets out the rights and obligations of both the tenant and the landlord. However there are many variations of standard clauses and the tenant should ensure he or she reads the lease carefully and understands their responsibilities. Whether the lease is verbal or written both tenant and landlord must agree what the rent and additional charges will be, when payment needs to be made, where the payment needs to be made and what property is being rented.

Deposit

Usually a landlord will request the tenant pays a deposit upfront in case there are damages. The deposit might be equal to 1 or 2 months rent depending on criteria such as the tenant’s credit profile or the condition / value of the property.

Tenant Rights

If the landlord is holding the deposit the deposit must be refunded with interest. The landlord cannot use the deposit to upgrade the property when the tenant vacates.

Obligations

The deposit is held in trust in case there are damages – the tenant may not request the landlord use the deposit as rent at any time during the lease and most especially not in the last month of the agreement.

Deposit Refund

The tenant and landlord must perform a joint incoming and outgoing inspection. The incoming inspection is to record the condition of the property when the tenant took occupation and the outgoing inspection is to determine if any damage was caused by the tenant.

The deposit may be applied to any amounts the tenant owes in terms of the lease: outstanding rent, utilities, lost keys, damage, etc.

Tenant Rights

After the outgoing inspection has been performed and it is determined there are no damages the deposit must be refunded to the tenant within 7 days. However, the deposit may be applied to any amount the tenant owes - including utilities. As the landlord will most likely only receive the final electricity and/or water account a month in arrears, he will only be able to reconcile the tenant’s deposit account then.

Should the outgoing inspection determine that the tenant did cause damage; the deposit must be refunded within 14 days of restoration of the property.

Should the tenant not attend the outgoing inspection, the landlord must refund the deposit with 21 days of termination of the lease.

Tenants Obligations
Rent

The rent is usually made up of a fixed basic rent as well as additional cost such as electricity, gas, water, parking, DSTV, etc

Tenant Rights
Tenants Obligations

The tenant has an obligation to pay the full amount of rent and all additional charges on the due date and to the landlord’s specified account.

Utilities

Utilities are the additional charges which the tenant must pay. These amounts are paid over and above the rent and both the tenant and landlord must agree upfront which additional charge the tenant will pay: electricity, water, sewerage, refuse removal or parking.

Tenant Rights

The tenant has a right to inspect the Landlord’s municipal account to ascertain the charges passed onto him.

Tenant’s Obligation

Over the past few years Eskom has increased electricity charges significantly and this has resulted in the cost of electricity sky-rocketing. The tenant is expected to use electricity responsibly and must understand his obligation to pay for his usage.

Landlords Right

The landlord is entitled to pass on the increase in his levies or rates and taxes as monthly charges, only if the lease specifically makes provision for this.

Early cancellation of a lease agreement

Usually a lease agreement is for a fixed period, for example 12 months. However the tenant does have the right to cancel the lease prior to the end of the fixed period.

Tenant’s Rights

The tenant has the right to cancel a lease early by giving the landlord 20 business days notice. The tenant must also remember he will be liable for a reasonable cancellation penalty.

Tenant’s Obligation

The tenant remains responsible for the full payment of rent and utilities on the date they fall due. The tenant may not request the landlord use the deposit for rent during the cancellation period.

Maintenance

It is the landlord’s responsibility to place and maintain the property fit for the purpose for which it was let. The tenant is responsible for maintaining the property in the good condition it was given to him – fair wear and tear accepted.

Disputes

Should the tenant have a dispute with his landlord there are remedies available to the tenant. It is advisable to have a written lease but the tenant still has rights if the lease is verbal.

Tenants Rights

Lodge a claim at the Rental Housing Tribunal

Tenant’s Obligation

Keep the payment of his rent up to date

Tenant’s credit profile

Credit Bureaus collect and maintain information regarding how a person pays all their credit accounts, for example their loan accounts, store cards, cell phones and rent.

Tenant’s rights
Tenant’s obligation

The tenant has a responsibility to make full and timeous payment to the landlord to ensure and build a positive credit profile. This will assist him when it becomes time to move rental properties, or open new credit accounts.

Useful Contact Numbers

Rental Housing Tribunal 011 630 5035
TPN Credit Bureau 0861 876 000

Click here to download pdf document

Source: Money Web
Date: 29 Mar 2022
By: Amanda Visser

People who are currently using their homes to conduct a business, whether operating a guesthouse, providing student accommodation or using it as office space, should take note of a recent judgment by the Supreme Court of Appeal (SCA).

In terms of the judgment municipalities are allowed to impose a penalty rate on the property if its use is in contravention of its zoning provisions.

The rate can be imposed without having to recategorise the use and publish the change of the valuation roll in the provincial gazette.

Property lawyer Neels Engelbrecht, who represented the ratepayer in the case between the City Council of Johannesburg v Zibi and another, says there are literally “thousands of people” in many of the large metropolitan areas who are operating a business from a residentially zoned property in contravention of their zoning provisions.

He adds that people who are simply renting out a room or flatlet on their property should not be concerned about the judgment. In his view it only becomes a concern when the purpose and nature of use has changed completely.

The process

In terms of the Rates Act municipalities must formally inform ratepayers if they are in breach of their zoning category. One of the sub-categories in the rezoning policies of metropolitan areas is “illegal and unauthorised use”.

If a property is used outside its zoning the municipality can change the category of use to unlawful or uncategorised use and increase the municipal rates in accordance with the new category.

“This can result in a 300% increase in your monthly rates and taxes account,” says Engelbrecht, adding that his client’s account increased from R800 to R3 500 per month.

The council continued to levy the penalty, despite his client having discontinued renting rooms to students.

“In our opinion it should be a once-off penalty and if the ratepayer does not comply, [they] can be penalised again.”

His client’s account now stands at more than R700 000.

Engelbrecht’s firm took the matter to the Johannesburg High Court, which found that the council did not adhere to the act or its own policies. The council took the decision on appeal before the SCA.

The outcome

The majority judgment in the appeal court upheld the city’s appeal, arguing that municipalities are entitled to levy the penalty rates based on the Municipal Structures Act. This act is the umbrella or empowering act under which the Rates Act falls.

They also argued that it would place an “unreasonable” burden on city councils if they had to publish a supplementary valuation roll for every unlawful use of a property.

The minority judges agreed with the Johannesburg High Court’s decision. They also found that the higher rate penalised the conduct of the ratepayer and was therefore not a rate but a penalty. The imposition of such a penalties does not fall under the Rates Act.

Engelbrecht says the majority judgment is clearly wrong.

“One cannot rely on the empowering act [Structures Act] where there is specific legislation [Rates Act] that governs certain issues. This is trite law,” he adds. The Rates Act regulates the imposition of all property taxes.

His firm has approached the Constitutional Court for the final say.

“The matter is of national importance as the penalty rate is levied widely.”

Need for zoning

Engelbrecht notes that there is a good reason for zoning. The city council must plan the development of its municipal area.

This is to ensure that nobody operates a chicken farm in the middle of a residential area and that no heavy industries open up shop in a commercial area.

The council must consider issues such as noise, traffic and smells for proper town planning.

He advises ratepayers who are uncertain about their position to consult a town planner in their area. They will know what is allowed and what is not, since municipalities do not grant every rezoning application.

“It will be worth their while as rezoning is tedious, expensive and can take up to two years to be finalised.”

Source: Private Property
Date: March 07, 2019

Most home buyers are aware that a good credit score is a vital part of being approved for a home loan – and that this score is based mostly on their history of paying their bills in full and on time.

What many of those who are currently still tenants don't know, however, is that their rental payment history is not automatically reported to the credit bureaux that compile their credit scores. "And with rent being a major monthly expense, the omission of that history could well cost them their dream home one day,"" says Rudi Botha, CEO of BetterBond*, SA's leading bond originator.

"Recent research by one of the biggest credit bureaus found that only about 50% of tenants' rental histories were being reported – and that the credit scores of 80% of tenants improved when rental payment records were included in the calculations," he notes.

"This is why it is important to rent only through a professional agency with systems in place to automatically report rental payments to a specialist credit bureau such as PayProp or TPN – or from a private landlord who participates in an official rental reporting programme."

Botha says credit histories and scores are generally obtained from one or more of the four major credit bureaus in SA – Experian, TransUnion, Compuscan and XDS – and that they can also incorporate a record of rental payments into their reports, provided that they can obtain the necessary information. For example, TPN shares rental repayment records with Experian.

"If the length of your lease is defined, your regular rental payments will be recorded by the credit bureau in the same way as the repayments on a car loan or other fixed-period debts; and if the lease is month-to-month, your payments will be treated like credit card or other variable account instalments. Either way, you are likely to be seen as more creditworthy if the record shows that you are diligent about paying your rent on time and in full."

And that, he says, will significantly improve your chance of being approved for a home loan, especially if you apply through a reputable bond originator like BetterBond, which is currently able to obtain approval for more than 75% of the applications it submits.

"What is more, it will make it much more likely that you will be offered a preferential interest rate that could save you many thousands of rands over the lifetime of your home loan. We find that the current average variation between the best and worst rate offered on an individual application is 0,5%, and on the typical first-time buyer's loan of R760 000, for example, even that small percentage translates into potential savings of R3000 a year off your home loan instalments and more than R60 000 worth of interest over the lifetime of a 20-year loan."

*BetterBond currently accounts for more than 25% of all new mortgage bonds registered in the Deeds Office annually and its statistics are a reliable indicator of the state of South Africa's residential property market.

Source: Private Property
Date: June 12, 2018
By: Lea Jacobs

Tenants often feel that landlords are unreasonable, especially when it comes to the payment of rent. The reality is that most landlords simply cannot afford to carry a non-paying tenant.

Rent may take a chunk out your salary, but this doesn't mean that the landlord is making a huge profit at your expense.

Most people who invest in a buy-to-let property do not do so because they want to get rich quickly. This is because, as a rule, property has never been regarded as a quick fix and investors generally invest in real estate for the long term.

South Africa has some pretty strict rules when it comes to leasing out property. Tenants are protected by these rules and although numerous landlords believe that the person who rents a property has far more rights than the person who owns it, tenants still tend to think that landlords go all out to rip them off.

There are of course unscrupulous landlords who despite increasing the rent on an annual basis, refuse to maintain the property. However, it can be said with a certain amount of confidence that there are tenants who expect far too much from their landlords and complain and demand on a continual basis.

Generally speaking, all a landlord wants from his tenant is for the property to be maintained to an acceptable standard and for the rent to be paid on a monthly basis. Unfortunately, there are those who think that the landlord is responsible for everything that goes wrong in the home including (and this is a genuine case) replacing old light bulbs.

Rent will always take a huge chunk out of anyone's salary, however this does not mean that the landlord is raking in the cash and making a huge profit at the tenant's expense. It costs money to own a home – apart from on-going maintenance issues, bonds have to be serviced and rates have to be paid. Despite all of this, it is most often cheaper to rent than to own a home of your own – at least in the short term.

Renting out property is not a personal exercise, it's business and the average landlord cannot afford to carry a defaulting tenant. They have bonds and rates to pay and neither the banks nor the municipalities are interested in why their accounts haven't been paid – they simply want their money.

A landlord may well be compassionate about the fact that a job has been lost or that a tenant has been ill – this does not detract from the fact that he needs the monthly rental on time, every time. It may sound harsh, but landlords should never have to resort to evicting a tenant. Those who can't pay, should simply move out and find a more affordable place to live. Unfortunately this doesn't always happen mainly because the tenant believes that the landlord owes him something and he therefore has every right to stay in the property until he gets back on his feet.

Everyone needs a roof over their heads and paying rent should be the first thing that tenants concentrate on by paying at the beginning of the month. Think about it, it's pretty pointless having a budget for food if you haven't got anywhere to cook it. Likewise, looking great in the latest fashions may make you feel good, but it's a bit of a waste of time if you don't have cupboards in which to store the clothes.

Source: Private Property
Date: Aug 31, 2017
By: Lea Jacobs

Just because the municipality has turned a blind eye allowing you to run a guesthouse from your home, this doesn't mean your neighbours are going to have to ignore the situation.

In a recent judgement reported in Smith Tabata Buchanan Boyes (STBB) newsletter, the courts found that neighbours do have a voice and can take action against property owners who flout the law even if the municipality chooses not to do so.

The background

The dispute related to the running of a guesthouse in Bethlehem in the Free State. The premises were zoned single residential, but that hadn't stopped the owner from converting the home into a guesthouse. The ensuing noise and disruption caused by the visitors started a row with the neighbours who eventually took the matter to court.

Both the property owner and the business manager of the guesthouse defended the action stating that they had been in the process of applying for the necessary approval from the municipality, although at some point they were notified that the municipality couldn't find the application and had been advised to resubmit the request. They also maintained they had been given verbal approval by a relevant official to run the establishment until permission was granted.

The neighbours argued that in terms of the Bethlehem Town Planning Scheme, the property was zoned as single residential and although it could have been used for purposes of 'place of worship, place of instruction, instructional building or a place of assembly', the owner hadn't obtained the relevant permission. In addition, they noted that according to the scheme, the zoning only allowed for a dwelling house or dwelling unit that was used for the accommodation and housing of single family. It was also noted on the Title Deed that the property had to be used in accordance with the stipulations of the Bethlehem Town Planning Scheme and the use of such of such property for purposes as a guesthouse fell outside this definition and would therefore be illegal.

They sought an order in terms of which the property owner was interdicted from continuing with the illegal use of the property.

The owners argued that the neighbours had no right to bring the application to court. Basically both the owner and the manager of the establishment believed that just because they had broken the law this didn't give the neighbours the right to complain, and it was up to the complaining neighbours to prove that the fact that they had opened a guesthouse had caused the complainants special damage.

The neighbours disputed this saying that an immediate neighbour had a legal right to force the homeowner to comply with the Town Planning Scheme because the scheme was intended to operate, not in the general public interest, but in the interests of the inhabitants of the area.

The court found the neighbours had the right to bring about the action and although it noted that the incidents of the noise and disruption themselves were not enough to grant an interdict, the fact the guesthouse was being run illegally led to the court granting an order in favour of the neighbours.

The judgement sends a clear message out to those who flout local laws and while the relevant municipality may turn a blind eye to the goings-on of property owners, there's a good chance your neighbours won’t and, as this judgement clearly shows, they have every right to take you to court.

Source: Private Property
Date: Feb 16, 2017
By: Press

Under what circumstances can a tenant terminate their tenancy without breaching their contract agreement?

There are a number of possible reasons that could arise that lead to a tenant wanting to terminate their lease agreement before it has run it course, however, it is possible for them to get out of a lease agreement without being in breach of the contract?

According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, the answer to the question will depend on the cancellation clause within the lease agreement. "Unless there are grounds for cancellation of the agreement, which are stipulated in the cancellation clause, it can be rather difficult to get out of a lease agreement without any recourse. Even if the lease agreement doesn’t contain a cancellation clause, the tenant can still be considered to be in breach of the agreement if they decide to terminate the contract prematurely," advises Goslett. "If the tenant has breached the contract, the landlord is within their rights to demand that the tenant pays the rental amount due to them for the remainder of the agreed upon tenancy period."

Goslett says that if a landlord has met all the conditions of the lease, the tenant cannot simply terminate the lease agreement. They will have to discuss the matter with the landlord and possibly come to a mutual agreement, such as another tenant taking over the current lease agreement or subletting the property for the remainder of the lease period. It is imperative that any agreement made between the two parties is put in writing to avoid any confusion or backlash further down the line.

The Consumer Protection Act (CPA) allows tenants to provide the landlord with 20 days' notice if they choose to cancel their lease before it expires, however, this does not completely absolve the tenant of any responsibility. While a tenant has the right to move, if the landlord has met the requirements of the lease, they are within their rights to recoup reasonable costs that they may incur during the search for a replacement tenant. In certain cases, the tenant might be required to pay for the loss of rental income, advertising the property and letting agents commission. While the CPA does not stipulate what would be considered a reasonable figure, the landlord cannot make up exorbitant figures and charge the tenant what they feel like. It is also illegal for the landlord to withhold paying the tenant their deposit unless there are substantial damages to the property which were caused by the tenant.

"In the instance where the landlord has not met their end of the bargain and is therefore in material breach of the lease agreement, the tenant will be able to cancel the lease agreement early without them breaching the contract agreement and paying the penalties. Examples of this are if the property has become inhabitable or the landlord has failed to maintain aspects of the property that they have stipulated in the lease agreement that they would – the tenant is within their right to cancel the agreement," Goslett explains. "However, in this situation, the onus is on the tenant to prove that the landlord is in breach of the contract and has failed to uphold their side of the deal."

Goslett says that tenants who have reached the end of their lease agreement and are planning to move should check their contract to see whether it contains a renewal clause, which will stipulate the amount of notice time the landlord requires. "If the lease agreement has expired and the tenant is still living in the property, through their actions they have effectively already entered into a new lease agreement and will need to follow the right procedures to cancel the contract. If the original lease agreement does not include either a cancellation clause or a renewal clause, the tenant must give the landlord one month’s written notice before its expiration," he concludes.

Source: Private Property
Date: Aug 21, 2017
By: Lea Jacobs

Landlords that insist on unreasonable residential rentals every year risk losing those tenants... and in the current economic climate good tenants are hard to replace.

Barbara rents a property. She's a good tenant, pays her rent on time, keeps the place pristine and doesn't cause any problems with her neighbours or the body corporate. She's lived at the same address for three years, but recently gave notice because of the steep increases her landlord insists on imposing every year.

Barbara is in the process of building up her investment portfolio. She owns three properties and rents in her personal capacity in order to maximise the profits from those properties.

She fully understands the business side of things and while she can appreciate that most landlords increase the rent annually, she also believes they need to consider a number of factors before announcing an unrealistic increase.

"I realise it's the landlord's prerogative to increase the rent as per the lease, but I have to question why anyone would chance losing a good tenant because they are being unreasonable. In my opinion, insisting a tenant pay a double digit increase in the current economic climate isn't only unreasonable, it’s committing financial suicide.

"Personally, I'll not only be paying an additional R1 000, I'll have to pay the costs for a new lease and increase my deposit. All in all, I'll have to find an additional R4 000 in October if I want to continue living at the same address.

"We were faced with a similar scenario last year, but were able to negotiate the increase down to seven percent and thus decided to stay. However, this year the landlord insists the increase will stay in place and as such we have terminated the lease.

"Don't get me wrong, I understand landlords have to profit from their portfolios. They have to pay rates and taxes and levies, but in this instance I believe there is no way the landlord can justify this increase and her unwillingness to compromise is going to cost her a good tenant."

Like any good investor, Barbara treats her property portfolio like a business and makes a profit from all her investments. She says that while she does hike the rent she charges her tenants annually, she doesn't necessarily increase it to the maximum allowed.

"I take various factors into consideration including the economic climate and the costs I've incurred over the year (including special levies), but most of all I consider the type of tenant. One of my tenants has rented a property from me for the past year. He pays his rent on time and although he tells me if there is a problem, more often than not he'll fix it himself and only ask that I supply the materials. The home is immaculate and I understand I'm lucky to have a person of his calibre living in the property. We've just signed a new lease and because of his good standing, I have decided to keep the increase to an absolute minimum. I probably wouldn't have increased the rent at all, but the body corporate has called for a special levy to be paid.

"I've had bad experiences with tenants before and in one instance lost a great deal of money attempting to evict someone who simply stopped paying. At other times a tenant has paid on time, but caused major headaches with the body corporate, leading to fines. I've also rented out to people who didn't look after the property at all and I was left with a massive clean-up bill when they eventually left."

She says that while she doesn't begrudge the increase her landlord insists she pays, she questions the motive.

"The most important thing I've learnt about renting out property is that a good tenant is worth his weight in gold and I will move heaven and earth in order to keep him happy. I not only keep increases to a minimum where I can, I will also explain why I have to charge more and if necessary provide figures to prove my point.

"Tenants, like the rest of us, are feeling the pinch of the poor economy and I think it's important for landlords to recognise the impact an unreasonable rental increase will cause. Yes, they may not fully capitalise on their investment, but they will make money and, perhaps most important of all, will be assured of a regular monthly rental income."

4 things a landlord should consider before increasing a rental:

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