Category Archives: Letting agents

Landlord's frequently asked questions.(part 4)

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This is the fourth and final instalment of  “Landlord’s frequently asked questions” . We try and answer these questions to the best of our abilities but in the event of any dispute between yourself and your tenant contact your local Rental Housing Tribunal. They will be able to instruct you on the legal route to follow when dealing with your tenants.

10.What can I as the landlord do if the neighbours complain about my tenant?

All tenants must comply to the house rules of the complex or area they stay in, if they are in violation of these house rules you should be able to implement the cancellation clause in your contract and give your tenant notice. As always it is best to keep a record of your correspondence with the tenant regarding complaints against them and the actions you intend to take.

11.What can I do if I suspect my tenant is doing something illegal on my property?

Immediately report your suspicions to the police,  you can also include a clause in your lease agreement allowing you to cancel the lease immediately if the tenant is found to be committing an illegal act on the premises.

12. Can I use my tenants deposit to repair damage they have done to the property?

Excluding reasonable wear and tear, you may use your tenants deposit to repair damage that they have done to the property. You need to be able to provide the tenant with receipts that reflect the cost of the repairs and you have to return any leftover monies to the tenant. Always inspect the property together with the tenant when they move in and out, you can then compare the two lists and see if they have damaged the property.

As I said above if you encounter any problems with your tenant contact the Rental Housing Tribunal in your province. You can also refer to the Rental Housing Act of 1999, this is easily found and downloaded from the Internet.

Landlord's frequently asked questions.(part 3)

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This is the third instalment of  “Landlord’s frequently asked questions” , you can find the previous instalments in the sites article archives. We try and answer the questions to the best of our abilities but it is always a good idea to seek out professional legal advice, for example by calling the Rental Housing Tribunal in your province. They offer advice regarding landlord/tenant relations.

7.If my tenant’s lease expired a few months ago and they are still paying for and living in the property may I give them notice to vacate the property immediately?

NO, the first thing you should do is check your lease agreement for a clause specifically for this event and follow what it says. If there is no such clause then you and your tenant have effectively renewed the original lease and all it’s terms including it’s length and period of notice clause. If you still wish to evict the tenant before the end of his newly renewed lease you need to follow the terms set out in the cancellation clause of your lease agreement, if you have such a clause.

8.Can I evict my tenant myself, if not, how do I do it?

Unfortunately no matter how tempting it is you may NEVER evict a tenant yourself. Check what your contract says and if the tenant is in breach follow the legal route and call your local Rental Housing Tribunal. They should be able to advise you on how to obtain a court order to evict the tenant.

9. May I change the locks on the property and lock my tenant out?

NO, this is illegal. It is considered an illegal eviction and you as the landlord could get in serious legal trouble for doing it. If you need to change the locks on the property you must give the tenant a spare key so that they may also access the property.

Let us know how you successfully evicted a problem tenant the legal way.

Landlords' frequently asked questions.(part 1)

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In a series of articles we will be answering a couple of the most frequently asked questions to the best of our ability, when in doubt always get advice from a qualified professional.

1.Do I have to sign a lease agreement with my tenant?

This is always best as a written agreement should state all the terms agreed upon by the landlord and the tenant so it will be easier to settle any disputes in the future. However a verbal agreement is just as binding, but you as a landlord have to be able to supply a written contract if the tenant requests one.

2.What information should the lease require?

Both the landlord and the tenant’s name.

Both the landlord and the tenant’s postal address.

The address of the property the tenant has agreed to lease.

The obligations of each party, usually the tenant pays for the water and lights and the landlord pays the rates.

The amount of rent the tenant will be paying and by how much the rent will increase upon renewal of the lease agreement.

In what kind of instalments will the rent be paid eg; monthly.

Any other reasons why the rent would increase, for instance a rates increase.

The amount of deposit the tenant has paid.

The terms by which either party must give notice to vacate the property or cancel the lease.

A list of defects the property may have and the rules which the tenant has to abide by regarding pets; etc.

3.May I ask for a deposit?

Asking for a deposit is well within your rights and is to be returned to the tenant upon expiry of the lease, if the tenant has damaged the property beyond reasonable wear and tear the deposit is to be used to cover the cost of repairs.Remember the deposit must be put into an interest bearing account and that you as the landlord must be able to provide receipts for any repairs done that were paid for with the deposit.

Tell us how having a signed lease agreement and deposit has helped you in the past.

Does a tenant receive his deposit back including the accrued interest?

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I have been trying to figure out the answer to this question for a couple of days now. Does a tenant receive, upon expiration of their lease, the deposit they paid including the interest accrued.

The Rental Housing act of 1999 clearly states that you as a landlord must invest the deposit in an interest bearing account and the tenant is entitled to that interest upon the expiration of their lease. The tenant is also allowed to request written proof from the landlord of the interest being accrued upon request at any time during the term of the lease.

However if you are a tenant renting from a registered estate agent it would appear you are not entitled to the interest accrued, unless otherwise stated in your lease agreement. Regulations regarding this are contained in the Estate Agency Affairs Act, 1976. But this conclusion is apparently also open to interpretation and others maintain that it does allow for the tenant to receive the interest accrued just as they would from a normal landlord.

The deposit and any interest accrued are of course still there to be used by the landlord to be used to repair any damage that the tenant is responsible for. Any monies remaining of the deposit must be paid to the tenant not later than 14 days after returning the premises to the landlord.

If the tenant is not responsible for any damage the landlord must then pay back the full deposit and interest within 7 days of the expiration of the lease.

The Rental Housing Act of 1999 is easily accessible online in pdf form and was the source of my information. Remember to get any legal advice from qualified people.

*Any readers out there who wish to comment on the apparent confusion regarding estate agents and the interest accrued on a deposit please feel free to offer your insights.

Checking out a prospective tenant.

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Another great way to check a prospective tenants background is to utilise the services of the Tenant Profile Network, tpn.co.za. They are a credit bureau that specialize in tenants’ payment histories.

They can offer you information on how reliably the tenant has paid their rent in the past. This is very useful information when considering a new tenant.

They can also give very specific information about things like under what circumstances the tenant vacated the property. For instance whether it was due to them being evicted for non-payment or another breach of contract.

But it is not there to only show your tenant in a negative light. The service will also enable you to determine how well a tenant has paid in the past so that you can enter into a lease agreement with them confidently.

You can also provide other landlords with information regarding a previous “bad” tenant by having them blacklisted on TPN.

It is unfortunately a reality that we have to investigate a tenants ability to make payment but it is your investment and you have to educate yourself or possibly suffer the consequences.

Go to  tpn.co.za and get their contact details if you are in need of their services.

Try a different kind of tenant.

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Some investors are having no difficulty whatsoever in finding tenants for their rental properties, but some are losing tenants occasionally due to the credit crunch or simply not finding tenants willing to pay the rent they require.

Property investors in that situation should perhaps consider renting out their property in different ways.There is the option to specifically target businesses or business men who need self-catering accommodation when they travel.This method will have stresses unique to it and you will have to be very hands on.There will be a high turnover of people in your rental and you need to clean up, check them out ;etc, each time someone new arrives.You do however have the possibility of making a bit more money as daily rates are usually quite a bit higher than monthly rates.Keep in mind though you will probably need to advertise your property on a regular basis and build up an emergency fund for the months that are slow.

Another option open to certain investors, depending on the location of their property, is to rent out to students.It would be best if the property were then close to a university or other higher learning institution.Again you are likely to have a higher than normal tenant turnover but you also stand to make a little more money out of it.There are usually two or more students sharing a property and this usually allows them to pay more than a single tenant.In alot of cases their parents will be paying their bills and this is probably slightly more reliable than having the students themselves pay the bills as they can usually only manage part-time jobs on top of their studies.

Most people who rent out to students have one complaint in common though, they receive frequent noise complaints about those properties.Many will remember their students days as being rowdy and partying quite alot, so you know what I am talking about. Another common complaint is alcohol abuse and students letting the property get dirty.This will not always be the case though and if you feel you are up for what might become a challenge then go for it.

So consider alternative forms of letting your property but consult people with some experience in the matter.Find out about all the positive and negative aspects of what you choose to follow.Maybe you get lucky and have a neat,non-drinker for a a student tenant.

Check your letting agency out carefully.

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We recently published an article about landlords taking out insurance to cover themselves in the event of tenants defaulting on their payments.Certain letting agencies provide this service and it covers the landlords rental income for a maximum of three months.It was initiated because of the difficulty landlords have trying to evict unsuitable non-paying tenants or when a tenant decides to leave suddenly leaving the landlord without income.

While this is certainly a good thing to have don’t always assume others have your best interests at heart.Some landlords I know have told me that they paid for the cover but were not informed when the tenant left or when the cover started paying out.

As our readers can imagine this is potentially disastrous to any property investor.The letting agency only informed the owner when the three months of cover was finished and there was no still replacement tenant.The agency had stipulated that the owner would be informed at all times of any developments that might affect them, this is apparently not what they did.

One landlord reported that it had happened to him with two tenants in succession.They had both packed up and left without giving notice and the letting agency only informed the landlord three months later,once again they still had not found a replacement tenant.

Investors use letting agencies for a variety a of reasons,one of which is the distance they live from their investment property.If an investor lives in Nelspruit and has a rental property in Durban it is usually easier to entrust the daily running of the property to a letting agency.It is therefore imperative that one chooses ones letting agency with great care.If yours is the only property they have in a certain area they may find it inconvenient to travel there to check on your investment.Try and find a reputable agency that has a history of servicing your specific area well and maintains contact with you in the ways they have promised.

If you find yourself calling them when they should be calling you make this very clear to them and make sure they understand that they work for you, remember this is your money, your credit record and your livelihood.You cannot afford to take chances simply because of bad communication.

It is of course also the owners responsibility to follow up and ensure that the people they have working for them are doing their jobs.It is an unfortunate fact that while property investors are worried about saving money so are all the other businesses and they may be cutting corners that will affect you.

Misuse of landlord insurance.

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I would like to tell you a story about how a letting agency misused my landlord insurance.

The letting agency sold me an awesome product, landlord insurance. If my tenant does not pay the insurance pays up to 3 months GREAT, or so I thought…

The first time I got suspicious was when I was notified that my property did not have a tenant and that the insurance had already paid out 3 months rent. I was furious, why was I not notified? The excuse I got was that the assigned agent was not very reliable and has been fired and that this would never happen again.

About 6 months after the incident I received an email from the new agent. He informed me that the property did not have a tenant and that the insurance had paid out 3 months rent. He can not help me any more and urged me to find a new letting agent. AGAIN!!! Why was I not informed.

My suspicion is that this company used this insurance to make money out of me. If they informed me earlier I could have done something about it, but no, they waited until the 3 months had past and then only informed me of their plans.

So the wrap up, always insist on financial documentation, on a monthly basis, that indicates that your property still has a tenant. Believe me, it will save you stress and money.

Try and avoid a bad tenant.

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There are so many things to think of when purchasing a property for investment purposes and the work doesn’t end when you take transfer and the property is finally yours.After all the excitement of closing the deal you will probably now need to find a tenant.This can be tricky and you should take as much time as possible before signing anything and make sure you are comfortable with your choice.

The reason a good tenant is so important is obvious,if they don’t pay you will probably end up in a sticky financial situation.They can also just not care about the property and things they are responsible for can easily be ignored and your property may suffer.

When screening possible tenants be thorough,check their references,make sure there aren’t any holes in their information.Take the time to have a conversation with the applicant and really listen to what they are saying,are they happy in their job or relationship.These factors contribute greatly to where a tenant decides to stay and if they will stay if their situation changes.

You should also research the area you have bought the real estate in and the tenants that rent there.The average income of the area will give you a good idea of many things,like how much rent you can charge.

Once you do have a tenant try and avoid future problems by getting all communications in writing or by confirming any conversations via email.This really will save you alot of stress and confusion.Then you should definitely familiarize yourself with the legal side of being a landlord.From the basics,such as who is responsible for maintaining what, and the more serious aspects like tenant eviction.

Tenant eviction is not a simple process and most laws are in favour of the tenant.So take responsibility,do your research and be happy with your tenant from the begining.Nothing is foolproof but at least you will know you tried your best to get a good tenant.