Tag Archives: tenant

Poorly performing letting agents.

Posted on by

Scores of property investors own real estate outside of the city or town that they live in and struggle to manage the property themselves, they therefore look for a reputable letting agency that will find them a tenant, take care of admin work and keep an eye on things. This service is of course not free and the letting agents do a get a cut of the rent every month.

But what do you do when the company you have chosen does not perform?

A friend of mine owns a property in a nice area in Johannesburg and was looking for a new letting agent and tenant. The previous two tenants had vacated the property, apparently without notice, and on both occasions the letting agency did not inform my friend that the tenants had left until three months later. In this instance my friend had landlord insurance that covered the rent for a three month period and only when this ran out did the agents start looking for a new tenant. Talk about poor service!

My friend ended his relationship with the first letting agency and soon found a new company that has a reputation for excellent service across the country. The happiness was shortlived though as the new company took almost four months to find a tenant for the well priced apartment that is close to all amenities. The agency then proceeded to allow the tenant to move in before paying the first months rent and consented to let the tenant split the deposit over a two month period.

When my friend realised that the first months rent had yet to be paid they called the agency and asked what had happened, the agent was surprised to hear of the problem and contacted the tenant who said they had already paid the money over. My friend waited a few days and still no rent so they again called the agent who again contacted the tenant. The tenant then said that they would actually only be paying the rent in that day. At this stage my friends bond was in danger of going into arrears.

The tenant did eventually pay but turned out to be another tenant from hell and was eventually evicted after a long legal process.

This long story eventually leads me to question the ability of letting agents, even the supposedly reputable ones. Do they not check a tenants references or follow up with the owner of the property as to whether or not they are satisfied and have been paid? If they perform poorly by forcing the owner to become involved should they not be held accountable?

It seems some letting agents are happy to take your money and install the first tenant that says they can pay the first months rent and deposit. They should be held accountable when they perform poorly and put an investors credit record in jeopardy by selecting a bad tenant.

You as the property owner need to protect yourself by being informed, demand monthly statements if they do not offer to provide them, and do spot checks if you feel it necessary. You are paying for a service and should get your money’s worth. Looking at the current market there doesn’t seem to be shortage of people looking for quality rental accommodation and the majority of these people will be good tenants who pay on time and observe their contractual obligations regarding giving notice and so forth.

Some agencies just appear to be lazy.

What do you think? Should letting agencies be more accountable for their apparent poor judgement?

Let your tenant pay for his own electricity.

Posted on by

In previous years it was usually easy to absorb your tenants’ electricity bill as it was a small amount and often not worth the effort to separate.

However these days with the skyrocketing price of electricity and more price increases on the horizon many landlords may rethink the previously acceptable practice of including the tenants electricity in a predetermined rental price.

It becomes a problem because you cannot increase a fixed rental amount whenever you want and even upon renewal of their lease you can usually only increase it by a relatively small amount which you previously stipulated in your original lease agreement.

You need to take into account the electricity price increases that are likely to be implemented over the course of the year and the fact that people use far more electricity during the winter months in an effort to keep warm. It would be inadvisable to unthinkingly offer new tenants a lease agreement that includes their electricity.

Your best bet is to install a prepaid electricity meter in the rental property and have the tenants pay for their own electricity consumption, there are systems that allow them to purchase vouchers either directly from you or from the supplier. Where separation of accounts is not possible be aware that your bill is going to go up in the winter and you will have to take responsibility for it.

What do you think? Are prepaid electricity meters the best thing since sliced bread?

forfeiture

Posted on by

The loss of a property or something of value due to non-compliance with the law or breach of contract. In the case of a tenant being in breach of contract or performing an illegal activity on the leased premises the tenant will forfeit his lease and the landlord may evict them and take possession of the property. Every country has different policies regarding eviction, ensure you follow the legal route.

Landlord's frequently asked questions.(part 4)

Posted on by

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)

Posted on by

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 2)

Posted on by

Following up on yesterdays article  “Landlords’ frequently asked questions.(part 1)”   here are a few more popular questions landlords ask.

4. If I want to increase the rent may I do so at any time?

The short answer is NO.You have signed a contract that guarantees the amount of rent a tenant must pay for the full term of the lease. However you may include a clause in the contract that states that you can increase their rent if certain specific things take place, like if the rates go up.

5. May I increase the rent as much as I want to?

Again the answer is NO.You need to state in your lease agreement with the tenant how much you are going to increase the rent upon renewal of the lease.This needs to be a reasonable amount, usually only 10%.If you do not have this clause then you need to negotiate an increase that you and the tenant find acceptable.

6.My tenant says he has paid the rent, but i haven’t received anything yet.

It is of course the tenants responsibility to ensure that you are paid, therefore they must be able to provide some proof of payment. If they cannot you are entitled to give your tenant notice and have them legally evicted. Likewise if you know you have been paid you must be able to provide your tenant with a receipt.

Tell us how keeping records of any payments received/made has helped you in the past.

What will make you a bad landlord?

Posted on by

Many landlord’s find themselves in sticky situations when it comes to dealing with tenants. Often a tenant can take advantage of a landlord by not complying with their obligations as stated in the lease agreement or by deliberate damage to the rental property.

Many landlords will then consider underhanded tactics to rid themselves of the tenant or to force them to comply, many of these tactics leave landlords open to legal action against themselves.

Some of the things that landlords are not permitted to do are switching off the electricity supply to the rental property and having the property’s water turned off. Some landlords will even go so far as to remove the doors of the property or remove the tenants belongings without their permission.

A landlord may take possession of items the tenant brought onto the property but only after following the legal route with the sheriff’s office. If a landlord merely enters a tenants home and removes their furniture and other belongings this is considered theft and the landlord will be open to criminal prosecution.

While it is very tempting to deal with a bad tenant in this manner it will only be to your detriment and make you look like a bad landlord. Contact your local Rental Housing Tribunal, there should be one in every province, and have them advise you on how to proceed in the legal manner.

Another way to be a bad landlord is to neglect your property. If  you do not maintain the property you rent out to a good standard your investment will surely suffer. This really is like shooting yourself in the foot because you probably bought the property as an investment.

So always follow the legal route when dealing with a bad tenant and take care of your investment.

Landlords' frequently asked questions.(part 1)

Posted on by

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?

Posted on by

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.