When your tenant ‘does a duck’
Tips for landlords when their tenant does a disappearing act. Everyone who has let out property knows that sickening feeling when you find out that your tenant has disappeared. Most of the time there are signs usually unpaid or late paid rental. Some tenants plan to go without paying, while others just cannot pay. What should you do? Check on any municipal accounts, especially water and electricity accounts, if these are to be paid by the tenant. If the tenant does not pay, legally the landlord will have to. Also, check with the Body Corporate about their own accounts, because your tenant may owe them for services or (in some cases) for body corporate fines. Finally, don’t forget to check the building for any damage that your tenant is responsible for. Once you know how much is outstanding in total, you are in a position to decide how to proceed. If the amounts outstanding are small, it may cost more than you will recover, unless you go to the Small Claims Court. If the amounts are substantial, it will be worthwhile proceeding legally, provided that you are reasonably sure that your tenants have assets. First find out how much deposit is available, and deduct this off the outstanding amount. Next, have a look at the ten-ant’s application form. You will often find all sorts of helpful information, such as their previous address, relative’s address, work and home telephone numbers, etc. These will all help you to find your tenant. If you or your letting agent has access to ITC, you would also be able to do a check there, and this will give you further information. It is also possible to use tracing agents. An attorney can give you the details of one in your area. However, whether you find these tenants or not, it is important to have your attorney sue them for the outstanding amounts. If they have vacated your property, they are unlikely to defend the case. Once the amounts owing have been confirmed by the courts by way of a judgement, you have 30 years to collect this money if and when you find them in the future. If you don’t do this, then the amounts prescribe (lapse) within three years. To help prevent future lettings from ending in tears, it is important to know your tenant before you let to them. Do proper credit checks, take full deposits, and never allow tenants to pay off their deposits as this indicates that they are financially weak. Good credit control at the beginning of each month is important, and tenants must understand that if rent is not received by the owner / agent by the first day of the month, not only will there be a late payment penalty in terms of the lease, but that legal action will be taken immediately. For the most part, as soon as tenants realise that you are serious about them paying on time, they will give you little trouble. WRITTEN BY MIKE SPENCER Published in Personal Finance Issue 334 (November 2008). This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Landlords & tenants: Can a tenant cancel a lease?
When it comes to cancelling a lease early, both landlords and tenants must be aware of their responsibilities. It’s important to note that the Consumer Protection Act (CPA) has been put in place to protect consumers and it has changed the way that South Africans do business. The CPA also protects tenants in cases where they want to cancel a lease early. According to the CPA, if a tenant provides the landlord with 20 business days’ notice, the tenant has every right to cancel the lease early. However, this does not mean that a tenant can just pack his/her bags and leave the property without facing some sort of penalty or financial repercussion. These penalties and financial repercussions can include a fair cancellation fee, cost of advertising as the landlord would have to advertise to find a new tenant to take the place of the old tenant, and any other costs deemed reasonable in the case that a landlord cannot secure a tenant in such a short time period. It’s important to note, although a landlord can expect the abovementioned payments, a landlord cannot, under any circumstances, withhold a tenant’s deposit or expect the tenant to pay rent for the remainder of the lease. A landlord can also not charge a ridiculous and unreasonable cancellation fee. Additionally, a landlord may not withhold the deposit instead of charging a cancellation fee. Landlords tend to think that they can withhold deposits for almost any reason, and this is most certainly not the case. Unfortunately, there are landlords who ignore the CPA and insist that the tenant pay rent until the lease comes to an end when a tenant cancels the lease early. So, is there anything a tenant can do if the abovementioned is the case? Yes. A tenant can approach the National Consumer Tribunal for assistance or contact the Rental Housing Tribunal. Tenants need to ensure that they read the lease agreement very carefully before signing and to also make note of any provisions made in the lease agreement concerning the early cancellation of the lease as per the CPA. It is expected of landlords to be up to date and aware of the provisions laid out for early cancellation of the lease, but some are not, and this can cause immense problems for tenants. If your prospective landlord refuses to recognise the fact that you may cancel your lease early, consider renting another property. Also, consider renting a different property if the landlord insists on harsh repercussions in the case of early cancellation of the lease. This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)