Renting

South African Law Does Not Favour Tenants

It is not unusual to hear references to South African tenancy laws favouring tenants. Evicting a tenant can be problematic, especially if an unscrupulous tenant is determined to defend the court proceedings.

Some dishonest tenants exploit the landowner’s death by refusing to pay rentals to the executor of the deceased estate.

This gets complicated if the executor dies before the estate is wound up, because family members do not have the right to collect rentals. Factor in an eviction proceeding and recovery of arrear rentals initiated by the executor who dies before the matter is settled by the court, and the dishonest tenant will continue to occupy, rent-free.

Most tenants are not dishonest; they pay their rentals and perform their contractual obligations.

According to statistics compiled by the Tenant Profile Network (TPN), in the third quarter of 2013, the majority of tenants (86%) paid their rentals; 71% paid on the due date and in full; 4% were able to pay within the extended period granted, while 11% paid after the due date (tenants “in good standing“). The third quarter of 2014 showed a similar trend with only 5% having failed to pay rentals at all, the lowest since 2007, when TPN began to compile rental information.

Tenants who paid rentals of R25,000 and above were the biggest non-paying culprits.

Landowners use their real estate as income-generating investments and rentals offer the best opportunity. They have the option to access a wealth of information and the choice of many experienced letting agents to select good tenants and to grow the rental income.

Tenants, on the other hand, need adequate habitable rental space and must seek out affordable rentals.

This is in a hostile market due to very high occupancy demands and one of the highest rental demands in Africa, because of almost two thirds of its urbanised population.

Rental stock falls short by several decades of government’s failure to address investments and implement policy frameworks in the face of rapid urbanisation and refugee-immigrant population.

The scarcity of rental accommodation is further worsened by municipalities whittling away their rental stock, mainly relying on social housing institutions to provide for the rental sector.

The private sector used the myth of rent control as the reason for not investing in rental housing.

Fifteen years after the abolition of rent control, the private sector needs to construct another apologue to explain its underinvestment or apathy.

Given the dismal situation of rental accommodation, most tenants have no choice but to accept leases without ever having the option to negotiate, either the rentals or the lease terms and conditions.

They are also required to pay security deposits before taking occupation. While deposits are paid up front, it is refundable seven days after the accommodation is vacated.

This delay often creates difficulties for the poor- and middle-income tenants who need their deposits for the next landlord. These are the “good standing” tenants.

Deposits are not paid within the seven days in most instances, and have led to many lawsuits in the magistrate and high courts, complaints lodged with the provincial rental housing tribunals and proceedings through the small claims courts.

Tenants are further burdened with lease and inspection costs. They pay lease costs for contracts that are generally computer-generated standard documents or ones obtained from certain stationery stores.

Concluding a lease by landlords or their representatives, such as attorneys and letting agents, is merely a perfunctory chore of inserting the parties’ details and minimal information.

Letting agents levy a charge for inspecting the property with the tenants. Some agents impose charges for both the initial inspection at the time of the tenant taking occupation, and for the exit or outgoing inspection at the end of the lease term.

The joint incoming inspection provides an inventory list, including any defect, to establish the condition of the property and any content (eg if it is let furnished or partly furnished) at the inception of the lease.

This has a direct bearing on the rights and duties of the parties and on the security deposit providing a vital source or evidentiary document.

There are other factors that burden tenants, but what is clear is that the law, skewed as it may be, certainly does not favour tenants.

This article “South African Law Does Not Favour Tenants” was issued by Dr Sayed Iqbal Mohamed, Chairman, Organisation of Civic Rights.

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