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Regardless of which region you live in, the prognosis for the rental market is the same: flat. Local agents had some advice for landlords while they wait for the (inevitable) upswing. “Landlords need to be aware that there’s plenty competition in the rental market and therefore their pricing needs to be realistic and market-related,” says Hayley Bird, Complete Coast Properties.
John Birkett, Rawson Rentals Cape Metro Classic Rentals, agrees. “The rental market in 2019 has seen lower-than-usual rental incomes. Many landlords have had to be negotiable on the rent and the annual increases, as creditworthy tenants who look after the property and pay on time are increasingly hard to come by.”
“Traditionally the winter period is always quieter and demand normally picks up towards the end of the year. Landlords are having to seriously consider reducing monthly rental amounts – lower price rentals remain active,” says Caron Leslie, RE/MAX Property Associates. “My advice to landlords is to provide an excellent product and even better service. Opt for steady, long-term relationships rather than quick gains,” says Russell Fisher, Russell Fisher Properties.
Herschel Jawitz, CEO, Jawitz properties says, “The rental market is relatively flat at the moment due to the large number of properties available for rent, especially in the sectional title market and because of the current economy. Lessees are currently price-sensitive and spoilt for choice. As a result, many lessors are accepting below-inflation escalations to keep a good tenant and may have to accept a lower rental to find a new tenant.”
It’s the law
It’s crucial that landlords and tenants know their rights according to the law.
The Rental Housing Amendment Act 35 of 2014 is the latest amendment to the Rental Housing Act 50 of 1999.
It increases the rights of tenants and obligations of landlords and aims at firming up the rules regarding inspections, deposits, the condition of a property and what should be included in the lease.
Glenda Taylor, principal, Greeff Rentals, says, “While the Amendment Act is yet to be gazetted, both landlords and tenants are required to comply with the provisions of the Act immediately for all new lease agreements, while existing lease agreements are to be updated within six months of the Act coming into effect.”
The new legislation requires that landlords provide a written lease agreement as verbal agreements will no longer be binding. The landlord must ensure that the property is structurally sound, suitable for habitation, has adequate space, and provides basic services such as water and electricity. All these items should be addressed in the lease agreement.
It also addresses the fact that the landlord must place the tenant’s deposit in an interest-bearing account – the interest accruing for the benefit of the tenant. The deposit interest accrued should be refunded as soon as possible (usually seven days) after termination of the lease agreement.
The deposit may be applied towards the payment of any outstanding amounts for which the tenant is liable under the lease agreement, including outstanding accounts for water and electricity and the reasonable cost of any repairs caused by the tenant to the premises.
The Act also protects landlords from tenants who cause malicious damage to a property. The onus is on the landlord to inspect the property with the tenant at the start of the lease. Any defects or damages must be noted but not necessarily rectified by the landlord and must be listed and attached to the lease agreement for later comparison.
On exit, if a joint inspection doesn’t take place, the property is assumed to be in good condition and the landlord may not withhold the deposit for repairs or damages.
The landlord cannot cut off utilities and services due to non-payment – this can only be done by the municipality – or lock a tenant out of the property without a court order, and is required to follow correct legal procedures even if the tenant is in breach. Tenants are entitled to privacy but landlords can inspect the property from time to time. Unannounced inspections, however, are not permissible.
Tenants are often in the dark with regard to their rights and responsibilities when renting a property. PG van der Linde, rentals manager, Seeff PTA East, answers four commonly asked questions.
Q: May tenants make changes to a rental property?
A: Once the lease has been approved and the tenant has moved in, they’re not allowed to make any structural additions or install fixtures without written consent from the owner. If the owner does give consent, tenants aren’t entitled to compensation for convenient changes and fixtures when the lease expires. Tenants may also not remove these alterations and fixtures from the premises. Tenants may, however – in some instances – be entitled to reimbursement where necessary improvements and maintenance were undertaken.
Q: How can tenants be sure to get their deposit back?
A: Hand the property back in the same condition as it was received, with the exclusion of fair wear and tear, which is something the tenant should not be penalised for. Wear and tear is scuff marks on a wall or chipped paint. A hole in the wall is considered damage and you’ll be penalised.
Q: Can tenants back out of their rental lease?
A: You’re allowed to give 20 business days’ notice to cancel a lease agreement. If the landlord or agent makes an effort to procure a new tenant by marketing the property at market-related prices after receiving notice but fail to find a new tenant, the tenant who gave notice can be held liable for a reasonable cancellation penalty. A reasonable cancellation penalty may require that the tenant pays the rental for the remainder of the lease should a new tenant not be sourced.
Q: What if I can’t resolve issues with my landlord?
A: Tenants and landlords can turn to the Rental Housing Tribunal who will listen to both parties and establish a fair settlement or will assist in mediation.
The rent trap
This describes a situation where people are continuously renting property instead of buying their own – and it gets harder and harder to break out of that as you get older. “The first step in avoiding the rent trap is making the choice to rent a property in a lower price bracket and save up towards a deposit on a property to buy,” says Just Property CEO Paul Stevens.
He says it’s easy to fall into the rent trap by assuming that your income will increase as you get older. “But that’s not always the case. Responsibilities increase, as does rent and already we’re seeing data showing long-standing tenants battling to keep up with escalations.”