CLAIMING DAMAGES FROM TENANTS & REFUNDING TENANT DEPOSIT
Ensure your documentation is watertight if you need to claim
damages from the tenant before refunding their deposit. This all begins before
the tenancy starts.
If tenants dispute damages claimed, 99.9% of cases referred
by tenants to the Rental Housing Tribunal will be lost by landlords if there
are no signed ingoing inspection reports.
In a damages dispute 2 documents would be required:
• A fully signed lease (initialled on every page)
• An ingoing inspection report done together with the tenant
at inception of lease recording the condition of the property before the tenant
moves in, signed by both parties - tenant & landlord or agent.
The ingoing inspection report is as important as the lease
agreement itself. This document, together with pictures taken at inception, is
the only way to compare the condition of the property at end of lease to its
condition at the start, therefore the only method of determining damage caused
by the tenant (excluding Fair Wear and Tear).
Note: pictures without signed ingoing inspection report will
not suffice - signed ingoing and outgoing inspections are required in terms of
the Rental Housing Act.
Big Mistake: Don't
make the mistake of doing the ingoing or outgoing inspection with an occupant
if they are not the tenant on the lease (e.g. parent signed as tenant for son
or daughter who is the occupant). If this is going to be necessary due to the
tenant not being available make sure you get written permission from the tenant
(i.e. whose name is on the lease agreement) for the occupant (or representative
of tenant) to attend and sign the inspection, or if possible write it into the
lease agreement at the start. And also get the tenant to sign the report.
Should I use the damages Deposit for outstanding Rent or for
Damages?
If your tenant still owes you rental equivalent to or more
than the deposit held, and there are also damages once they have vacated it's
wise to use the deposit to pay for repairs to damages to help you re-let the
property and earn rental income from a new tenant, and then claim for unpaid
rental (summons) from the previous tenant.
And also claiming for rent could be slightly less
complicated in the legal process as you should only have to produce a rental
invoice or statement (plus lease), whereas claiming for damages would
necessitate evidence of the claimable amount.
Deducting Damages from the Deposit and Refunding the Tenant:
After assessing damage with the tenant at the outgoing
inspection:
• If there is no new damage and no amounts still owing to
the landlord by the Tenant (e.g. utilities or any other unpaid amount) then the
Landlord/Agent must refund the full tenant’s deposit plus any interest within 7
days after the termination of the agreement.
• If there is new damage evident and recorded at the
outgoing inspection, then before refunding the tenant’s deposit plus interest
the Landlord/Agent can deduct the reasonable cost of repairing damage, and in
this instance the balance of the damages deposit and accrued interest need to
be refunded not later than 14 days of restoration of the Premises.
Note: the tenant is entitled to see invoices for all repairs
undertaken.
What happens if the Tenant doesn't attend the Outgoing
Inspection?
Should the Tenant not attend the outgoing inspection the
Landlord (or agents) are required to inspect the property within 7 days of date
of termination of the Lease in order to assess any damage, and in this instance
the Tenant’s deposit, or balance of deposit if any after deduction of damages
needs to be refunded to the Tenant no later than 21 days after the Termination
date.
And if the Landlord doesn’t attend the Outgoing Inspection?
If the Landlord doesn’t conduct this inspection together
with the tenant it is deemed that the landlord is acknowledging that the
property is in a proper state of repair – the landlord will therefore have no
claim for damages and the tenant’s full deposit plus interest will have to be
refunded (unless of course there is rental or utilities money owing to the
landlord).
Annie McLelland, LettingWorx Rentals
The information contained in this article expresses our
thoughts, views and understanding based on our experience and is not to be
taken as legal advice. As such LettingWorx Rentals will not be liable for any
errors or omissions in this information.
LettingWorx Property Rentals
Southern Suburbs, Cape Town
property@lettingworx.co.za
Telephone:083 324 7401
Southern Suburbs, Cape Town
property@lettingworx.co.za
Telephone:083 324 7401
