select
|

Legal essentials govern rental deposit

A tenant does not have to pay a (security) deposit unless this is asked for at the outset.
Once parties agree that a deposit is part of the lease contract, it must be collected before the tenant takes occupation.

Failure to refund the full amount, or within a specific period, is an unfair practice in terms of the Rental Housing Act 50 of 1999. It is reluctance or failure to refund the deposit at the end of the lease contract that ends up in controversy and legal action.

A landlord who fails to carry out an inspection with his tenant, but retains the deposit, may end up in court or the Rental Housing Tribunal.

Some landlords may have genuine reasons not to return the deposits, such as needing to recover costs to carry out necessary repairs or needing to repaint the walls because of the tenants' negligence that caused damage to the dwellings.

The lease may contain provisions that the tenant will forfeit the deposit for reasons stipulated therein.

In an oral lease, the landlord's right to the deposit is protected by the common law and the Rental Housing Act.

Below are the relevant paragraphs of section 5, subsection 3, relating to the deposit:

5 (3) A lease will be deemed to include terms, enforceable in a competent court, to the effect that:

e-mail with a view to registering such defects or damage, as provided for in subsection (7).

(f) At the expiration of the lease the landlord and tenant must arrange a joint inspection of the dwelling at a mutually convenient time to take place within a period of three days prior to such expiration with a view to ascertaining if there was any damage caused to the dwelling during the tenant's occupation thereof.

(g) On the expiration of the lease, the landlord may apply such deposit and interest towards the payment of all amounts for which the tenant is liable under the said lease, including the reasonable cost of repairing damage to the dwelling during the lease period, and the cost of replacing lost keys, and the balance of the deposit and interest, if any, must then be refunded to the tenant by the landlord not later than 14 days after restoration of the dwelling to the landlord.

(h) The relevant receipts which indicate the costs which the landlord incurred, as contemplated in paragraph (g), must be available to the tenant for inspection as proof of such costs incurred by the landlord.

(i) Should no amounts be due and owing to the landlord in terms of the lease, the deposit, together with the accrued interest in respect thereof, must be refunded by the landlord to the tenant, without any deduction or set-off, within seven days of expiration of the lease. The landlord's right to use the deposit cannot be exercised, regardless of the impressively worded lease clauses, if he fails to inspect the dwelling with the tenant.

There can be no remedy for this failure, irrespective of who inspects the dwelling in the absence of the tenant. Section 5 (3) (j) makes this abundantly clear:

(j) Failure by the landlord to inspect the dwelling in the presence of the tenant as contemplated in paragraphs (e) or (f) is deemed to be an acknowledgement by the landlord that the dwelling is in good and proper state of repair, and the landlord will have no further claim against the tenant, who must then be refunded, in terms of this subsection, the full deposit plus interest by the landlord.

Last year, the Rental Housing Act formed the basis of an appeal before the Constitutional Court (Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd (CCT57/11) (CC) (2012) ZACC 2; 2012 (3) SA 531 (CC); 2012 (5) BCLR 449 (CC) (13 March 2012)).

The judgment confirmed the statutory requirements regulating tenant-landlord relationship, including the provisions relating to deposits.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK