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July 2010
Dear Rental Readers
How utterly delighted you must feel that the World Soccer Cup has been so successful! Not in our wildest dreams did we think that this wave of euphoria would sweep South Africa and that such a massive crowd of enthusiastic visitors would fly in for every game played. As I write the final game is being played and no one seems to mind who wins – the mark of a highly successful month of celebration.
I trust that all your lettings to foreign visitors were as successful and that you and your firms have benefitted. Bookings were made at the last moment in many instances and I understand that the Garden Route was unexpectedly booked out by teams and supporters who have all sworn to return! Great stuff!
This week will be a return to normality with the associated problems of renting residential property. I am drawing your attention to a problem which many of you are experiencing and hope to clarify this issue.
Payment of interest to the Estate Agency Affairs Board.
Agents and agencies registered with the EAAB are expected to have adesignated trust account into which all deposits and rentals are paid.It is this fact that activates the fidelity fund which is an insurance toprotect the consumer in cases where deposits are not returned by errantagents/agencies.
Annually in order to renew a fidelity fund certificates agents areexpected to submit their audited trust account statements to the EAAB.The EAAB reserves the right to deduct any interest in a trust accountwhich it retains for its own funds.
Chapter 3, 5(3) d of The Rental Housing Act expects that the tenant's deposit is placed in an interest bearing account with a financial institution at a savings accountrate, the interest of which is to go to the tenant. Prior to the amendments to the RHAct in 2008 the RH Act stated that a registered estate agent would deal with intereston a deposit as expected by the Estate Agency Affairs Act i.e. that 50 % of the interestwould go to the EAAB.
The amendment (Section 5, 3 (b) to the RH Act has removed the EAAB clause and confirms the common law position of holding the landlord responsible for therefund of the deposit to the tenant. No matter who holds the deposit it must berefunded with accrued interest to the tenant at the end of the lease period.
Remember that the deposit and interest belong to the tenant at all times and therefore he has a say as to where it is held. Should a tenant be uncomfortable aboutpaying a deposit to a landlord directly, make the necessary arrangements to eitherinform the landlord in writing about his legal obligations with regard to the depositand see that both the tenant and landlord have copies, or arrange to retain the depositin your account charging the tenant a nominal fee for administration.
Any penalties charged for late payment or non payment can only be charged if the agency is a registered debt collector, or if the agency chooses not to actively pursuethe collection thereof. Do not under any circumstances deduct penalties incurredduring the term of lease from a deposit at the termination of a lease. These should becollected at the time they were due.
When is a deposit refunded?
A deposit is refunded at the end of a lease period in the following manner:
- Within 7 days if no amounts are due to the landlord, no damage to theproperty and no repairs required
- Within 14 days of the restoration of the property when the tenant isresponsible for a repair
- Within 21 days when a tenant refuses joint inspection, the landlord isexpected to inspect the property after the tenant has move out havingrefused to do a joint inspection three days prior to the termination date ORif the property has been abandoned by the tenant.
Take note of the fact that the above periods of time cannot be waived. A tenant wouldhave the right to approach the Rental Housing Tribunal for refusal to refund thedeposit within the legal time periods.
Statistics of rental payments
The figures below from TPN reflect the payment of rent by the residential rental market:
63% of tenant paid on time
15% paid late
10% paid part rent
12% did not pay
Noted that the best payers were in the Western Cape!
RPL vs Full Training to get the FETC: Real Estate:
We are pleased to see that many of you have already begun your training for the newqualification. However, there are still many who have not yet enrolled.
IF you are confused and do not know the difference between RPL or applying to do the full training please email Debbie for the explanation or visit our website (Click onRPL and at the bottom of the page click on download ... you will find a goodexplanation which should help you decide which option to choose).www.assesscent.co.za
Reappointment to Rental Housing Tribunal
I have been reappointed to the Tribunal for the next three years and look forward to bringing you training which reflects the latest in case history.
Yours in rentals,
Vivien & Debbie
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