Both landlords and tenants should ensure that rental deposits are being paid into properly audited trust accounts when new leases are signed.
This warning comes from Jan Davel, MD of RealNet Holdings, after several cases of “missing” deposits were recently reported in the Bronkhorstspruit/Kungwini area. He says rental markets where demand is very high, such as in Bronkhorstspruit, 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.
“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. “Dealing only with the franchisees and agents of a reputable estate agency group will, of course, also go a long way towards ensuring that their interests are properly protected, whether they are tenants or landlords.”
Issued by RealNet.