Assessment & Traning Centre

August  2009

Dear Rental Agents!

Many of you have availed yourselves of the service offered to align your leases to the Rental Housing Act. It is interesting to note how few are actually in line with the Act and how many are in direct contradiction of the Act. It is important to note that whatever is in an Agreement of Lease is superseded by the Act.

The following clauses are not permitted in terms of the Rental Housing Act :

• ‘Should a tenant not pay rent the landlord reserves the right to cancel the lease forthwith and take possession of the premises and eject the Tenant immediately' - you may only repossess a property either by negotiation, by giving notice in terms of the Agreement of Lease (which terms must be aligned to the Act) or by an order of court.
• ‘The Tenant will complete a defects list within 7 days failing which it will be deduced that the property is in good order and no claims will be permitted' - a joint incoming recorded inspection by landlord/agent and the tenant is demanded by the Act and a defects list will not be accepted by a Tribunal or court as a substitute.
• The same applies to the outgoing inspection.
• ‘The agency reserves the right to retain the deposit until all amounts are paid' - the damages deposit must be returned in terms of the Act but a services deposit may be retained until the relevant statements have been received and paid.
• ‘The Tenant shall keep and maintain all the Landlord's fixtures and fittings internally and return the premises to the Landlord in the same condition as at the Commencement Date' - as stated in the Act, fair wear and tear excepted.
  
• Lease fees: keep in mind that in terms of the Amendment to the Rental Housing Act of May 2008 a fee for a lease must be justified should the Tenant so request, as the Tenant has been given the right to refuse to pay this fee should the Agent not be prepared to explain how the amount was calculated.
• Non payment of electricity/water: A clause threatening to discontinue these services if a Tenant does not pay is illegal - the Act states that this is a criminal offence and cannot be done.
  
• Deductions from the deposit: ‘The Agent shall be entitled to deduct from the deposit commission in advance when rent is either paid late or not paid' - this is not allowed as it is
  (i) the Landlord's/owner's duty to pay commission, not the Tenant's. Should the Tenant pay late or not pay, use the breach clause or an attorney's letter to get the rent and thereby your commission and
  (ii) the deposit is a damages deposit and cannot be used for this purpose during the period in which it is in an interest bearing account
  

Debt Collector's Act & Association

The case which created the warning to agents is on our website www.assesscent.co.za.

You were cautioned in a previous RentNews about letters of demand, and advised to send letters of reminder for which you cannot charge unless you are registered with the Debt Collectors' Association.

The recent statement made by the chairman of the Debt Collectors Association has made is very clear that managing agents cannot collect debt as it is not defined as being a duty of a managing agent in the Estate Agency Affairs Act. Any managing agent who wishes to collect any debt such as unpaid rental, services and any other amounts owing by a tenant may do so as long as he is a registered debt collector. The only profession excluded in this regard is that of attorneys.

Thus all the clauses fining a Tenant for either paying late, for not paying, charges for letters of demand and phone calls of demand are not allowed. Should a managing or rental agent be reported to a case the Debt Collectors' Association, the fines and sentences are heavy. If you read the details of the recent case if will clarify exactly what you as a rental agent are entitled to do.

What are you allowed to do?

You may charge interest on a late or non payment but again, this must be justifiable and you must be able to explain how you charged that amount. It is expected that the charge be ‘out of pocket' expenses.

The best advice is to use the procedures that have put into place for late and non payers, and if these do not work, either negotiate with a tenant to vacate as soon as possible pointing out the disadvantages of remaining without paying, or hand the tenant over to your attorney to obtain either an interdict or an eviction.

Your management contract with the owner of the property should carry a clause that the owner will have to pay the cost of an attorney in advance keeping in mind that the tenant is responsible for all legal costs and they are recoverable.

Attorneys

We are frequently asked to recommend an attorney. I have located two experienced attorneys who are fully aware of the Rental Housing Act and how to either persuade tenants to pay or vacate, and exactly how to go about evictions. Below are the names and numbers of both - use them! Both attorneys attended the Evictions Seminar held during this month and those who attended were satisfied that they are well experienced in our field.

NEW TRAINING COURSES OFFERED:

BUSINESS PLAN WORKSHOP

This workshop has been developed with the real estate agent in mind and will give you the tools to write a professional plan for a successful business.

Given today's global economic climate, and the effect that it is having on you and your business, it is more critical than ever to have a clear, carefully thought-out and well written business plan. You will need to produce a business plan as part of your RPL.

Topics covered include:

•  Essential elements for every business plan
•  How to conduct a SWOT analysis
•  Understanding and applying Porters Five Forces
•  Preparing a budget for the future

Speaker:  Brendon Versfeld - (B.Bus Sci)
Date:  Saturday 12 September 2009
Time: 09:00-13:00
Venue: IEASA Pinelands
Cost: R500.00 - incl. Business Plan Manual & refreshments

HOW TO START A PROPERTY RESIDENTIAL RENTAL BUSINESS

Learn from the experts Vivien Marks and Johan Meyer how to establish a vibrant rental portfolio. Course content includes:

• Comply with legal requirements
• VAT, PAYE, Tax etc
• Business & Marketing plans
• Strategy and set up
• Employment contracts
• Labour law
• Commission structures
• Establishing a bank account
• Managing a trust account
• Necessary documentation
• IT management package - Rental Keeper

and much more!

Date: 17 September 2009
Time: 09H00 - 16H00
Venue: Milnerton Library Hall
Cost: R1000
Further details of upcoming training is available on our website.

RENTAL KEEPER:

We have had an exceptional response to Rental Keeper. Approx. 240 agents have already downloaded the trial run version.

We would love to hear from you in this regard and welcome your comments and suggestions for future updates.

To those who have already purchased Rental Keeper, thank you for your support and we hope that you will make good use of the system.

If you need help, remember to call Debbie on 084 5167334.

Happy renting!

Ps. Try FaceBook for marketing your properties! It works!

Yours in rentals,