Rental Tenants

Stay on top of your rental property with a mid-term inspection

September 15, 2016 in Rental Tenants

Conducting an inspection of a rental property mid-way through the lease allows the landlord and tenant to identify any issues early on.

Although in going and outgoing property inspections are a legal obligation, not every landlord places that much importance on these. This of course leads to endless problems with regard to who damaged what and when the damage occurred. Unfortunately, it’s usually the tenant who loses out in the long run when the landlord deducts money from the deposit to cover any damages. And yes, while it is possible to lodge grievances with the Rental Housing Tribunal, getting the issue resolved is going to take time and will generally impact on the tenant’s ability to put down a deposit on another home.

So how can tenants and landlords avoid deposit issues? One of the easiest ways is for the landlord to keep close tabs on what is happening on his property by conducting a mid-term inspection. In other words, an inspection is conducted, before, during and at the end of the lease period.

“A quick mid-lease inspection not only serves as a means of reviewing the condition of listed inventory, but also allows one to assess what’s really happening on the property,” says David Hutchison, sales director Property Sprout. “Is it being looked after? Is there maintenance work that needs to be carried out? Landlords and agents who maintain their properties regularly have the benefit of spotting small problems before they turn into large ones, which results in cost savings and a more valuable asset in the long run.”

He adds that the cost of a mid-term inspection is a small price to pay for the protection of your most valuable asset.

“Handing the keys over to a new tenant is never easy, and despite rigorous reference checks, the risk of landing a bad tenant can be high. Reduce the risk by performing joint in going, outgoing and mid-term inspections with photographic evidence; this way, the landlord or rental agent can closely monitor the property, assess damage and negotiate replacement and/or repair costs with the tenant throughout the term of the lease. Likewise, this will also give the landlord the opportunity to put the tenant on terms should they find that any aspect of the lease agreement is being breached.”

Staying on top of things can also help prevent disasters before they happen. Issues such as mold or blocked drains can end up causing major (and costly) problems for landlords. Unfortunately, however, this sort of problem often goes unreported during the lease period because the effects don’t directly impact the tenant.

Another issue which often come to light during a lease is subletting. Hutchison says this is a common challenge for landlords because it not only increases the wear and tear on the property, but also renders the reference check null and void.

Animals are yet another aspect that can be hugely problematic if tenants are left to their own devices. While there are instances where tenants are allowed to have pets, landlords who are concerned about keeping the property in good condition will often limit the number of animals allowed on the premises. And remember, it’s not just the inside of a property that needs to be checked. Not all tenants are created equal and as such not all will take care of the garden and/or pool to a satisfactory degree.

Although it’s an aspect that’s often overlooked, forging a good relationship with a tenant is imperative and knowing where each party stands during the lease is key. “Conducting a mid-term inspection creates an open dialogue with the tenant and can highlight any issues to be resolved early on,” says Hutchison. “Good tenants can be hard to come by, so maintaining a healthy relationship with the good ones is a smart way of future-proofing your property and avoiding an unpleasant experience.”

Source: Private Property

Tenants and Landlords: How to Handle Renting With Pets

August 25, 2016 in Rental Tenants

One of the more delicate and contentious issues in leases in South Africa is the debate surrounding pets in a rental property and the restriction of keeping pets within a lease and how reasonable this is.

The debate is a sensitive one because many consider their pets as they would any other family member, and being restricted from keeping pets gets people rather heated and flustered.

The debate is a sensitive one because many consider their pets as they would any other family member, and being restricted from keeping pets gets people rather heated and flustered.

“As a Residential Rental Specialist, I deal with the matter almost monthly,” says Grant Rea at Remax Living. “Many landlords simply disallow pets entirely, eliminating a large percentage of people from their potential pool of tenants. This is a particular issue in Cape Town where many people are ardent pet owners.”

He adds often people argue that if a pet is not a nuisance or is not hindering the enjoyment of other residents, the permission cannot reasonably be withheld. While this argument has merit, the property owner still maintains the right to withhold this permission.

Where a lease is silent on the matter it becomes more complicated, especially if the tenant did not have a pet at the commencement of the lease but acquired one later, he says. “In my opinion, the landlord would have to demonstrate how the ownership of the pet may be prejudicial to either him or the property. However there is currently no law that covers any rights to pet ownership in the tenancy scenario. If the landlord agrees to the tenant keeping the pet, it would not be unreasonable for a landlord to ask for an addition to the lease pertaining to the behavior of the pet and potential damages. So naturally a clause regarding pet ownership is essential in the lease.”

From a landlord’s perspective, if and when they decide to allow pets, either in a ‘pet friendly’ sectional title unit or freestanding home, it is important to clearly highlight the conditions for such permission to the tenant. As a tenant, it is vital to not keep the pet a secret from the landlord and get clear written permission before moving into the property. Tenants should be upfront with their landlords and let them have as much information about the animal as possible. This information could include a picture, confirmation of sterilization and inoculation details, breed and temperament.

“Our standard rental agreements are clear on the pet owner/tenant’s responsibility in keeping the pet under control at all times. The tenant also needs to ensure their pet does not cause a nuisance or cause damage, failing which the tenancy may be terminated or the pet needs to be rehomed,” explains Rea.

He adds that many owners in sectional title developments are restricted from keeping any pets in terms of the Conduct Rules, however, this may on occasion be overturned with explicit permission from the trustees. “This is becoming less prevalent as developments are simply clamping down on pets being allowed in blocks at all. Often conflict arises when existing pets are seen in the complex and new tenants assume a precedent has been set, so decide to acquire a pet or rent a property without checking on house rules on pets beforehand,” says Rea.

He adds that if a tenant has pets, they need to consider whether the rental property is in fact suitable for their pet. Many smaller apartment spaces are simply inadequate for most dogs, but may be suitable for smaller caged animals or cats if they are house trained. “Ideally, as a tenant with a pet, simply avoid properties that are not advertised as being pet friendly,” advises Rea.

“Generally pets can result in much conflict at the end of leases, with dogs often the cause of damage to the gardens, wooden floors and the like. Flea infestations, the remnants of pet hair or foul smells and damage to carpets often crop up too. It is highly advised that landlords request and hold a larger deposit when pets are allowed,” says Rea.

Source: Property 24

I Can’t Pay My Rent – What Do I Do Now?

August 25, 2016 in Rental Tenants

Most South Africans are fairly adept at stretching a pay cheque when necessary, thanks to our unpredictable economy, high unemployment rate, and skyrocketing living expenses.

“In almost all cases, assuming you have a previously good payment history, it’s a safer and wiser choice for your landlord to find a way to let you to stay,” says Savage.

Of course, even the most frugal of households can only make their money go so far, so what happens when disaster strikes and your income takes an unexpected dip, leaving you with empty pockets when it’s time to pay rent?

“There’s no doubt that South African tenants are feeling the pinch at the moment,” says Jacqui Savage, National Rentals Business Development Manager at the Rawson Property Group.

“If you find yourself struggling to pay rent, you’re definitely not alone. In fact, only 67.27% of renters this year have been able to pay on time and in full – we’ve had the third-largest decline ever recorded in Tenants in Good Standing, according to TPN’s latest Residential Rental Monitor.”

Just because the situation isn’t unusual, however, it doesn’t mean that you can safely ignore it. In fact, Savage says denial could be your worst enemy if you hope to get through your financial troubles unscathed.

“Not being able to pay rent is an incredibly stressful position to be in, particularly if it’s because of something like a retrenchment or unexpected illness in the family,” she says.

“The last thing most people want to do under these circumstances is share the details of their struggle with their landlord or rental agent, but keeping silent is extremely counterproductive if you’re hoping to preserve a good landlord/tenant relationship.”

Savage says many landlords rely on rental income to cover a portion – or all – of their bond costs,” she says.

“If rent stops coming in, those repayments might become affordable for them, and they could face losing their property as a result. This is obviously not ideal for either the landlord or the tenant, which is why it’s in everyone’s best interests to work together in the event of a financial hiccup.”

While it might be counter-intuitive to admit financial distress to a landlord who relies on your rental income to support their property, Savage says honesty is, as the old cliché states, the best policy.

“In almost all cases, assuming you have a previously good payment history, it’s a safer and wiser choice for your landlord to find a way to let you to stay,” says Savage.

She says new tenants can be a far riskier prospect than helping an old, reliable tenant over a rough patch.

“By having an open and honest discussion, you have the opportunity to reach a compromise that benefits both of you.”

When it comes to the specifics of that compromise, she says the options vary depending on the nature and seriousness of the problem.

Savage says it is essential that the tenant and landlord are both on the same page from the very beginning.

“As soon as you realize you might have trouble meeting your rental obligations, make the call to your landlord or rental agent,” she says.

“That way everyone is prepared and can take the necessary steps to minimise the damage, while finding the quickest and easiest route back to a healthy financial relationship.”

Source: http://www.property24.com

Evictions: Balancing Landlord And Tenant Rights

August 25, 2016 in Rental Tenants

Although many tenants believe that the Prevention of Illegal Eviction and Unlawful Occupation of Land Act 19 of 1998 (PIE) will prevent a landlord from evicting them from a property once a lease has ended if they cannot find alternative accommodation, this is not necessarily the case.

The individual facts of each case will be given careful consideration before a decision is made on whether or not to evict.

The recent case of Pierre Coetzee vs Pipet Place Eiendomme CC provides some insight into what the courts will take into consideration.

Court finds in favour of landlord

This is a matter that went on appeal from the Empangeni Magistrate’s Court, where in essence, the magistrate found against the tenant and evicted him after his lease had ended.

Coetzee had signed a lease for a property belonging to Pipet Place Eiendomme. The lease ran for 17 months and there was no provision for renewal. However, the tenant refused to move out of the property once the lease had ended, despite the owner giving the required one calendar month’s notice.

The tenant initially cited three reasons for not vacating the home:
there was a dispute between the parties pending before the KwaZulu-Natal Rental Housing Tribunal; the owner had failed to comply with his duties as landlord in respect of maintaining the property and the tenant also noted he had a lien over the property insofar as improvements were concerned; and finally, he claimed that he didn’t have access to alternate accommodation.

On appeal the tenant abandoned the first two reasons for staying in the property and relied only on the fact that he couldn’t find alternate accommodation. The important factors here are that the tenant lived alone, there were no elderly people or children involved and he wasn’t destitute.

The tenants personal circumstances

The tenant argued that the magistrate had failed to take all his personal circumstances into account as required by PIE. However, the appeal court disagreed and found that “the learned magistrate was acutely aware” of the tenant’s personal circumstances and financial position. The fact that it was difficult, but not impossible, to find alternative accommodation counted against the tenant.

The appeal court held that there was no merit to the complaints raised by the tenant.

Interestingly, it appears that the reason the tenant was so reluctant to move was that he couldn’t find a similar property to lease for the relatively low sum of R3000 per month. And although he was employed, he believed that PIE would force the landlord to renew the lease.

What the judge said

However, the appeal judge found: “The evidence established that after the monthly tenancy was validly cancelled, the appellant managed to remain in unlawful occupation and rent-free for a period of about nine months. I further consider that the appellant cannot be said to be disadvantaged in any way, nor is he poverty-stricken. Far from it. He is self-employed and capable of generating an income for himself. I see no reason why he cannot find suitable alternative accommodation. It is time that he did. It follows that the appeal cannot succeed and must be dismissed.”

What type of landlord do you want to be?

April 26, 2016 in Rental Tenants

Most tenants automatically assume that their landlords are making a fortune out of them. However, it pays to remember that there are different types of landlords who focus on different aspects of the market and the income earned from investment properties depends greatly on the type of property investors buy.

There’s no ‘one size fits all’ approach with property and although as with all things property location is important, it’s not the only consideration that should be taken into account when buying a second or third home.

Student rentals

There are a number of advantages to investing in this sort of property. For starters it doesn’t have to be fancy and houses can be rented out on a per room basis. There is a downside though. Student tenants can be noisy and disruptive which may cause problems with the neighbours. You will probably have to maintain the property a lot more than you usually would – students aren’t known for their handyman skills and don’t necessarily take the best care of a property. The good news is you will never struggle to find tenants and if you insist the parents co-sign the lease, you won’t generally be at risk of defaulting payers.

Holiday home rentals

Renting out a second home can certainly add a little extra to the coffers, but there is some risk associated with leasing out a property that is far from the landlord’s primary residence. Although there may be an increase in demand over peak holiday periods, some holiday areas virtually die when the visitors go home. This can be tricky when it comes to determining a monthly rental and a landlord may be disappointed at what he can charge in off-peak seasons.

Maintenance can be another problem. Anyone considering a long distance rental needs to become acquainted with local handymen, plumbers and electricians and only deal with trusted service providers. The same goes for an estate agent. It’s highly advisable to choose an agent who has a solid reputation within the area in which the property is situated. They should also have a valid Fidelity Fund certificate.

On the plus side, owning a second home in an idyllic spot is ideal for someone who has bought with the intention of retiring at the beach or in the mountains.

Upmarket homes

The idea of earning an exorbitant amount from a home rental is undoubtedly appealing, but once again, not everything is as it seems. Firstly, properties in this category need to be kept in pristine condition. Secondly, no one should assume that because someone wants to live in a palace they necessarily have the means to fund the lifestyle. A recent report released by FNB and TPN indicated that only 77.5 percent of those paying rent of R25 000 original more per month were regarded as being in good standing. While 22% (the percentage of tenants who defaulted on payments in this sector) may not seem like a big deal, it needs to be remembered that 88.4% of those who were paying between R7 000 and R12 000 were found to be in good standing.

It’s always recommended that anyone thinking of buying property conduct proper research before making a decision. The same applies to an investment property – never make assumptions about the rental value of a home. Do some investigating before you buy in order to ensure that the returns are going to live up to your expectations.

Source: www.privateproperty.co.za

Race, religion and landlords

March 31, 2016 in Rental Tenants

The Rental Housing Tribunal prohibits the rejection of tenants based on certain factors. At the heart of being a landlord is the drive to secure a quality tenant who takes care of your property and pays the rent. Realistically, these quality tenants come in all shapes and sizes. When it comes to mapping tenants, according to Stats SA, 76% are black, 8% are coloured, 3% are Indian and 13% are white. TPN Credit Bureau’s data also shows that 15% of tenants currently renting in South Africa are foreign nationals.

Given that there is an oversupply of tenants hunting for accommodation, landlords should be in the pound seat right now. In reality, however, quality tenants are scarce and finding one can often be as difficult as finding a needle in a haystack. It therefore stands to reason that any form of discrimination on the part of a landlord will only make the search that much harder.

Unfortunately, the reality is that there are still limited instances of discrimination by landlords against tenants. Fortunately, the Rental Housing Act prohibits the rejection of tenants on the basis of race, religion, nationality or sexual orientation. All estate agents and landlords (whether they have big rental portfolios or rent out only a single property) are obliged to comply with the provisions of the Rental Housing Act and any tenant who has been subjected to discrimination of any kind should lodge a complaint with the Rental Housing Tribunal.

Michelle Dickens, managing director of TPN Credit Bureau comments that, “age and gender play no role in determining the payment behaviour of the tenant. Higher risk indicators include self-employed tenants and tenants who refuse to provide any verifying documentation. Student accommodation also is riskier where the student alone signs the lease agreement, but TPN’s data shows that when a parent co-signs a lease agreement this significantly increases the timeous and full collection of rent.”

TPN’s data also shows that foreign tenants may be slightly more risky, but they should not be excluded purely because they are not South African citizens. One of TPN’s largest clients has a rental portfolio of over 4,500 tenants, of which 35% are foreign tenants. Currently, over 98% of this client’s tenants pay their rent on time, proving that if they check all of the correct boxes, foreign tenants may be just the quality tenant that the landlord is looking for.

What can a landlord take into account when approving or rejecting a potential tenant?

  • FICA requirements – an estate agent must, by law, obtain the potential tenant’s ID or passport documents, proof of address and proof of the income tax number of the potential tenant;
  • Immigration Act requirements – current documentation proving that the tenant is legally allowed to be in South Africa;
  • Credit profile history, bearing in mind that consent must be obtained before this information is accessed;
  • Verification of bank account information; and
  • Affordability assessment, by means of payslips and bank statements.

When a landlord or estate agent insists on the above information and documentation, tenants should not feel that their rights are being compromised in any way. Rather, they should understand that the landlord or estate agent is being diligent in ensuring that the tenant will actually be able to fulfil their obligations in terms of the lease. Making sure that everything is in order in the beginning will ultimately prevent problems arising down the line for both parties.

What things should the landlord not take into account when approving or rejecting a potential tenant?

  • Race;
  • Religion;
  • Sexual Orientation;
  • Nationality;
  • Marital Status;
  • Pregnancy;
  • Medical history; and
  • Political beliefs.

Rejecting a potential tenant based on the above criteria will amount to discrimination. This is clearly reflected in all current legislation in South Africa relating to rentals, including the Rental Housing Act and the National Credit Act.

Dickens sums it up succinctly, “unfortunately, there is still some discrimination in the rental industry when it comes to race, religion, nationality, sexual orientation and other factors that should never come into play when considering a potential tenant . What is apparent though is that the majority of landlords and estate agents are moving in the right direction and realising that the rejection of potential tenants must be based on objective criteria and not on subjective bias.”

Source: www.privateproperty.co.za

Understanding VAT rules on residential properties

December 22, 2015 in Rental Tenants

The value-added tax (VAT) rules on the building, buying, letting and selling of residential properties are not simple and it is worthwhile recapping some of the general principles that apply.

Lease of dwelling

The term ‘dwelling’ is defined in the Value-Added Tax Act, No 89 of 1991 (VAT Act), essentially, as immovable property together with fixtures and fittings which is used, or which is intended to be used mainly as a place of residence of a natural person.

The lease of a ‘dwelling’ (without related goods or services) is an exempt supply. In other words, the landlord must not raise VAT on rental charged to the tenant. The landlord is also not entitled to claim VAT on amounts it paid to its suppliers, for example, on commission of rental agents. Notably, a landlord is not entitled to claim VAT on the price paid on the purchase of a dwelling.

A person who has let a dwelling must also not charge VAT on the sale of the property. Instead, the buyer must pay transfer duty.

Supply of commercial accommodation

The VAT Act distinguishes the concept of ‘commercial accommodation’ from that of a ‘dwelling’.

‘Commercial accommodation’ means:

  1. lodging, or board and lodging in a building or other structure;
  2. together with ‘domestic goods and services’;
  3. which is regularly or systematically supplied;
  4. where the total annual receipts exceed (or are expected to exceed) R60,000 in a 12 month period; and
  5. which is not a dwelling supplied under a lease.

(The term also includes lodging, and board and lodging in, for example, a house for the aged and a hospice.)

The term ‘domestic goods and services’ is defined in the VAT Act as goods and services provided in an enterprise that supplies commercial accommodation. The term includes things like cleaning, maintenance, electricity, air conditioning, television, meals and a laundry service.

The supply of accommodation, goods and services in a residential property used as a guest house is an example of ‘commercial accommodation’. Another example is a person who lets apartments to students, and who also provides the students with meals and a cleaning and laundry service.

A person who supplies commercial accommodation must account for VAT in two ways:

  1. If the person provides the accommodation, goods and services for a period up to 28 days for an all-inclusive charge, then the person must charge VAT on the charge at the standard rate (14%).
  2. If the person provides the accommodation, goods and services for a period exceeding 28 days for an all-inclusive charge, then the person must charge VAT at the standard rate (14%) on 60% of the charge only.

Note in particular that, to be ‘commercial accommodation’, lodging must be supplied together with the goods and services. So, if one person supplies accommodation to, say, a student and another person supplies goods and services to that student, then the first person must charge no VAT on the rental for the supply of the accommodation (it is an exempt supply of a dwelling) while the second person must charge VAT at the standard rate (14%) on the goods and services supplied. Note further that the special VAT rules on the supply of commercial accommodation only apply if the person making the supply raises an all-inclusive charge for the supply. In other words, if a person raises one invoice for accommodation and another invoice for the goods and services, then the person must (1) raise no VAT on the rental charged for the accommodation (it is an exempt supply of a dwelling), and (2) must raise VAT at the standard rate (14%) on the supply of the goods and services.

A person who supplies commercial accommodation may be able to claim VAT charged to it by its suppliers to the extent that it charges VAT on the supply of accommodation, goods and services. A person who buys property to supply commercial accommodation may also be able to claim VAT on the price paid for the property.

Developers

Developers who build residential units must charge VAT at the standard rate (14%) when selling the units. The developers are entitled to claim VAT on the cost of supplies made to them, for example, building materials.

However, in some cases developers are not able to sell the units they have built immediately. In those cases, the developers often let the property to individuals until they are able to find buyers.

The problem then is that there is a change of use for VAT purposes: the developer who held the units to sell as stock (and raising VAT at the standard rate) now starts using the units to supply a ‘dwelling’ (and raising no VAT, as the supply is exempt from VAT). The effect of that change of use is that the developer must account for VAT on the value of the units as if it had sold the units. Naturally, this has adverse cash flow consequences for the developer, as it must fund the VAT out of its pocket.

Fortunately, under s18B of the VAT Act, a developer in that position may let the unit for a period of 36 months after concluding the lease without triggering the VAT on the change of use. If the developer sells the unit during the 36-month period, the developer must account for VAT on the sale at the standard rate. If, however, the developer is not able to sell the unit within 36 months then, at the end of that period, there will be a change of use and the developer will have to account for VAT on the value of the unit, as if it had sold the unit.

Conclusion

It is apparent that the way in which residential property is applied can have a fundamental impact on the incidence of VAT. Investors should obtain advice when buying, selling or letting residential property.

Source: www.bizcommunity.com

Good Rents Increasingly Attracting Investors – But Beware the Pitfalls

May 21, 2015 in Rental Tenants

The two fundamental aims when investing in property are still, as in any asset purchase, to achieve capital growth and to create an income stream.  Although property investors should, however, clarify in their minds as to which of these is their primary aim and which is their secondary aim. These days even though looking for capital growth they may well find it possible to achieve good rentals from day one.

Assuming that the investor puts down a 10 or 15% deposit and in a sense writes this off on his accounts, it is today sometimes quite easy to achieve a positive flow, i.e. one that covers the bond payments from the start. When this is not possible there have been cases where this type of parity is reached within 12 to 24 months.

We have often been told that finding the data on which to work and identify the areas giving the best returns is difficult.  In practice, five or six telephone calls to the agents in the area in which the investor is interested and a careful perusal of the data banks, such as Lightstone (who use Deeds Office statistics), will give a clear picture and there can be little excuse for making a bad decision.

Property holding costs in South Africa today, are generally in the 7 to 9% bracket, but there are many properties which will give better returns.

New investors are warned that there is dangers lying in wait for the less experienced.

Sometimes a property will give a very high rental in relation to its holding costs.  The reason for this however is not that it is in a high demand area but that the cost of the unit has fallen because demand is, in fact, very low – and there as the area is not performing.  Such areas should be avoided because once a downward trend begins it tends to carry on for several years.  Furthermore, in such areas it may be difficult to find tenants and if one does they are more likely to be unreliable payers.

Sometimes, an already tenanted property will be put on the market with a ‘guaranteed’ rent for a specified period.  Such guarantees are however fallible because they are based on the tenant’s lease. Should the tenant, as quite happens, run into financial trouble, he or she may be forced to break the ‘watertight’ agreement and if the property is in a low demand area, it may be difficult to find a new tenant.

At the moment the best returns – often giving a positive cash flow from the outset – are to be found in those suburbs conveniently sited in relation to the CBD.  These are now throughout South Africa, often zoned for high density and they have therefore been able to attract developers who by and large create the affordable multi-unit stock which has proved a particularly good investment of late.

However those investors who take matters really seriously seldom confine themselves to these obvious high demand areas.  They tend to find opportunities in areas not yet experiencing a boom and not yet recognized as likely to be up and coming.  These may very often be in outlying areas.

The future success of such areas will possibly be due to a steady but noticeable upsurge in tourism or to the initiation of a new industrial area or by the advent of a well-priced development like the Sitari project near Somerset West which is already influencing all prices in its vicinity.

Many outlying towns, for example Riebeek Kasteel also in the Western Cape, were very hard hit by the recession because a high percentage of the property owners there were investing in second homes.  However, such areas are very often now experiencing a comeback and in three or four years’ time will be recognized as having been an extremely good investment for those buying now.

 

SOURCE: www.propertytribe.co.za

How to Get Your Rental Deposit Back

April 14, 2015 in Rental Tenants

depositPrivate Property has over the years received hundreds, if not thousands, of queries regarding landlords’ refusal to refund a tenant’s deposit. While there are of course usually two sides to every story, it stands to reason that there are some landlords who do withhold deposits without solid reasons for doing so.

Tenants need to protect their interests and make every effort to document the condition of the home at the time of occupation. Inspecting the home with either the landlord or his agent is imperative and care should be taken to note every fault in writing. It’s always a good idea to back this up with photographs or a video of the damages or problem areas and to supply the relevant person with a copy of the snag list as well as the photographic evidence.

Some landlords are prone to brushing off the complaints and usually give some vague, verbal promise to fix the faults at a later stage. Tenants should view this type of landlord with caution and insist that everything is reduced to writing at the time of the inspection.

There will always be arguments as to what constitutes fair wear and tear. However, it stands to reason that the landlord cannot expect a tenant to pay for a complete new paint job when that person has lived on the premises for years. Property needs to be maintained, regardless of who lives there, and for this reason landlords may not hold a tenant liable for things that have worn out or that have weathered over time.

When a tenant moves out, he must insist on an outgoing inspection with either the landlord or his agent. Again, tenants should not allow a landlord to fob off this request and agree to the inspection being conducted at a later stage, or without him being present. Tenants should request that the original snag list as well as other evidence be brought to the inspection and that any additional faults incurred during the lease period be recorded and, if necessary, photographed.

Tenants who are intent on having their deposits refunded in full should view the property with a critical eye before moving out. The home should be thoroughly cleaned, the walls washed and any holes caused by nails or hooks should be patched. Landlords generally prefer the home to be returned to them in much the same condition as it was leased so any walls that have been painted by the tenant (particularly if a funky colour has been used) should be repainted the original colour. Fixtures such as light fittings and ceiling fans should be replaced if broken. The oven should be clean, with all the shelves in place.

While you may well find that your landlord tries to pull a fast one by attempting to claim for damages that weren’t incurred by you, having a well-documented paper trail that includes before and after pictures is going to help you build a strong case should the matter end in arbitration at the Rental Housing Tribunal.

 

SOURCE: www.privateproperty.co.za

Beware the Existing Tenant

April 14, 2015 in Rental Tenants

existing tenantBuyers who purchase a property that houses a tenant need to understand that the lease agreement that the previous owner has in place will remain in place until that lease expires – even if the property is sold on to another person. It’s also worth noting that any costs associated with having an illegal tenant removed will be for the new owner’s account.

People sell their leased investment properties all the time and most sales go through without any hitches. The current tenant simply pays his rent to the new owner and moves out once the lease has expired if the new owner wants to take possession of the property for his own use.

However, problems can arise if the existing tenant refuses to move once the lease is over. A recent article in the Cape Argus highlights the costs and stresses involved when a new owner is unable to take occupation because the person who is currently residing on the property decides he doesn’t want to move.

A Cape Town couple bought a home in Parklands and were due to move into the property on 1 November last year. There was an existing tenant, but this didn’t affect the new owner’s plans as that lease expired on 31 October. This is all pretty standard and things were going along nicely, until the tenant refused to move out.

According to the report, the tenant has continued to pay rent, but this, unfortunately isn’t the issue. The couple has had to fork out R33 000 in bond, legal and storage fees and have had to move in with friends until the issue is resolved. The new owners have tried everything to get the illegal tenant out of the home, even going as far as attempting to find the tenant alternative accommodation. Despite this, the tenant continues to refuse to move out. An eviction order has been granted and the tenant has been ordered to vacate the premises by 13 February.

Anyone who has ever bought a home will understand the excitement surrounding the entire home-buying exercise – particularly when, as was the situation in this case, it’s for the first time. It’s hard to imagine what these owners went through in terms of emotional torture given that they had nowhere else to go and had to resort to living with friends while the issue is being resolved.

While this case is exceptional because the tenant simply refused to move once his lease had expired, it does highlight the dangers associated with buying a property that houses anyone other than the previous owner. Think about it, you will be dealing with an unknown tenant. After all, you didn’t vet this person, you haven’t built up a relationship with him/her and as such have little or no idea as to what sort of person he or she is. The new owner may also not approve of how the existing tenant is looking after the property, however, generally speaking, there is very little that can be done, providing that the tenant pays his rent and abides by the other terms and conditions before the lease expires.

Taking legal action is always going to be a costly exercise and it imperative to do a little homework before signing the sales agreement. Issues such as how long the lease still has to run need to be ascertained and must be documented in the sales agreement. Under no circumstances should a buyer take a seller’s word and just assume that the tenant will move out when the property is sold. Tenants have rights that need to be adhered to and assuming that as a new owner you have every right to boot a tenant out of the property is going to end in tears.

 

SOURCE: www.privateproperty.co.za