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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.


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