In an effort to protect the rights of tenants, the Rental Housing Act lists certain provisions that are deemed to be included in each and every rental agreement of residential accommodation. Whether you are a landlord or tenant, or your lease agreement is in writing or was concluded orally, the deemed provisions are applicable to the agreement. It does not matter that the landlord and tenant did not specifically negotiate these terms.
The deemed provisions are found in section 5(3) of the Act. In the below bullet points, we highlight the most important of these:
· The landlord is required to furnish the tenant with a written receipt for all payments received from the tenant. The receipt must show the date, address of the rented premises and what the payment was for, such as arrears, monthly rental, and so forth.
· If the agreement provides for the payment of a deposit, the landlord must invest it in an interest-bearing account with a financial institution. At the end of the lease period, the landlord must pay the interest (and deposit) to the Tenant, or the balance thereof, if repairs for damages were required. The interest rate applicable to the deposit must at least be equal to the rate offered by the relevant financial institution on a savings account. If the landlord uses the services of an estate or rental agent to manage the lease, then the deposit may be paid to the agent who will, in turn, invest it in an appropriate interest bearing account, as provided for in the Estate Agency Affairs Act.
· In addition, if the tenant requests written proof of the interest that had accrued on the deposit during the lease, the landlord must oblige.
· The deposit (plus interest) must be returned to the tenant within 7 days of the expiry of the lease. If all or part of the deposit was used to pay for repairs of damage caused by the tenant, the balance must be returned to the tenant within 14 days after the repairs were effected. In the latter case, the relevant receipts to indicate the costs incurred, must be available to the tenant for inspection.
· The tenant and landlord (or their agents) must jointly, before the tenant moves into the premises and also before he moves out, inspect the dwelling to ascertain the existence or not of any defects or damage.
· If the landlord (or his agent) fails to inspect the dwelling in the presence of the tenant as required, he is deemed to acknowledge that the dwelling is in a good and proper state of repair. The landlord thus risks losing a claim against the tenant for damages.
The list we provided above is not exhaustive and section 5 of the Act catalogues further deemed provisions. Certain changes to these deemed provisions may soon become effective, as the Rental Housing Amendment Act was promulgated recently. Property practitioners are awaiting the publication in the Government Gazette of the date on which the amendment Act will become operational.
For assistance with lease matters, contact Martin Sheard at martins@stbb.co.za
