Rental Deposits Go Missing

Several cases of ‘missing’ rental deposits were recently reported in the Bronkhorstspruit/Kungwini area.

‘Rental markets where demand is very high create opportunities for unscrupulous operators who set themselves up as rental management agents but are not registered with the Estate Agency Affairs Board and do not have valid Fidelity Fund Certificates,’ says Jan Davel of RealNet Holdings.

‘Such operators often pay tenants’ deposits into personal accounts with no oversight. And unfortunately tenants then often find themselves out of pocket at the end of their rental contracts, when the deposit they paid has gone ‘missing’. Consumers do, of course, have legal recourse to recover their money, but it can be a long and expensive process.’

RealNet’s franchisee in Bronkhorstspruit, Koos Pretorius, says cases of ‘missing’ deposits are regularly reported to his office. ‘Desperate tenants and landlords are approaching us weekly for advice after discovering that deposits have disappeared and/ or that the agents who were supposedly managing their property cannot account for the missing money or have even absconded.’

This type of situation places both the tenant and landlord in a difficult position. On the one hand, tenants often depend on their deposits being paid back with interest at the end of their leases in order to secure a new lease. And on the other hand, landlords whose properties have been damaged cannot recoup the cost from a ‘missing’ deposit and have to pay for repairs out of their own pockets.

Pretorius says a recent survey by his office revealed that more than half of agencies currently offering rental property management services in Bronkhorstspruit are not registered with the Estate Agency Affairs Board. ‘And unregistered agents are highly unlikely to have properly audited trust accounts,’ he warns.

Davel advises consumers to make sure that any rental agent they wish to appoint has a valid and current Fidelity Fund Certificate (FFC) and that deposits are paid into a proper trust account.

This article “Rental Deposits Go Missing” was issued by RealNet.

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