Residential properties : Securing your security deposit
Section 5 of the Rental Housing Act (RHA) allows a landlord to take a deposit from a tenant before the tenant moves into the property. This amount must be stipulated in the lease agreement and is generally an amount that is equal to 1 month rental.
The RHA, requires that the landlord deposits the money into an interest bearing account, with a financial institution. A tenant has the right to receive a statement of interest earned. The tenant is therefore entitled to receive their deposit and all interest earned during the lease period at completion of the lease. The tenant will have to provide FICA information for the landlord to invest the deposit amount.
As further protection, a tenant should ensure the landlord or managing agent is registered with the Estate Agency Affairs Board.
A landlord is entitled to deduct any expenses incurred from repairing any damage which may have occurred during the term of the lease from the deposit and interest. This is normally provided for in the written lease agreement.
The tenant has the right to see all repair receipts to ensure the expenses are for genuine repairs that have been undertaken by the landlord. This does NOT include costs for general maintenance of the property which is for the landlord’s expense.
The Importance of a walkthrough inspection
A tenant should always do a pre lease inspection, noting any defects or faults prior to moving in and this should be reduced to writing and sent to the landlord or his agent as soon as possible, or within the time stipulated in the lease. A good idea would be to take photos as this would substantiate any claims of faults and will supplement any “snag lists’.
Some landlords often agree to fix faults at a later stage and this should be viewed with some suspicion as often the faults are not fixed and the landlords then blame the tenants for any damage. A tenant is not responsible for wear and tear and should not be forced to repaint the walls (unless the tenant has caused excessive wear and tear).
A tenant must always insist on having an exit inspection and this should be done when the lease comes to an end. The tenant should ensure that the original snag list is presented and any additional evidence (photographic or otherwise) as well as any additional faults that have occurred during the lease period. A tenant who is intent on getting their full deposit and interest should view this inspection with a critical eye (by ensuring the property is cleaned, the walls washed and any holes patched up).
Rental Housing Act, Amendments
This Act sets out the following criteria for both the landlord and tenant:
- Setting out the rights and obligations of the parties in a coherent manner;
- Requiring the lease to be in writing;
- The contents of a lease must include the following;
- Names and addresses of all the parties to the agreement;
- A description of the property;
- The amount of the rental;
- Reasonable escalation;
- Frequency of payment;
- The amount of the deposit;
- The lease period and the notice period.
Failure to repay the security deposit and interest, for no legitimate reason, by the landlord is a criminal offence in terms of Section S 16 (aB) (RHA) and is punishable with a penalty or imprisonment not exceeding two years or both.
To ensure your lease agreement is complaint with all the necessary rights and obligations of both the landlord and tenant, contact us on 031 – 003 0630 or email@example.com. #rentals #durbanlawyer #schwennlegacy #leaseagreements #newblogpost
Article written by – Barry Todd