OPINION: Law protects rights of landlords and tenants equally
Some dishonest tenants exploit the landowner’s death by refusing to pay rentals to the executor of deceased estate. This gets complicated if the executor dies before the estate is wound up because family members do not have the right to collect rentals.
Factor in an eviction proceeding and recovery of arrear rentals initiated by the executor who dies before the matter is settled by the court, the dishonest tenant will continue to occupy, rent-free.
Most tenants are not dishonest, they pay their rentals and perform their contractual obligations. According to statistics compiled by the tenant profile network (TPN), in the third quarter of 2013, majority of tenants (86%) paid their rentals; 71% paid on the due date and in full; 4% were able to pay within the extended period granted while 11% paid after the due date (tenants “in good standing”).
In the second quarter of 2019, the best-performing tenants were in the R70 00-R12 000 rental category, representing 86.93% of tenants in good standing and only 4.19% of tenants did not pay. In the R12 000-R25 000 rental category, 84.45% of tenants were in good standing. At the lower end, tenants paying R3 000 or less, non-paying tenants were the highest (14.82%), followed by the high end of the rental market of above R25 000, where non-payment was 6.66%.
Overall, the majority of the tenants paid their rentals on time: 56.65% of the tenants paying rentals of R3 000 and less, 66.64% in the R3 000-R7 000 rental category, 73.78% tenants in the R7 000-R12 000 rental category, 69.27% in the R12 000-R25 000 rental category and 57% were tenants who paid rentals above R25 000.
Landowners use their real estate as income generating investments and rentals offer the best opportunity.
They have the option to access a wealth of information and the choice of many experienced letting agents to select good tenants and to grow the rental income. Tenants on the other hand need adequate habitable rental space and must seek out affordable rentals.
This in a hostile market due to very high occupancy demands and one of the highest rental demands in Africa due to almost two thirds of its population being urbanised.
Rental stock falls short by several decades of government’s failure to address investments and implement policy frameworks in the face of rapid urbanisation and refuge-immigrant population. The scarcity of rental accommodation is further worsened by municipalities whittling away their rental stock, mainly relying on social housing institutions to provide for the rental sector.
The private sector used the myth of rent control as the reason for not investing in rental housing. Nineteen years after the abolition of rent control, the private sector needs to construct another fiction to explain its underinvestment or apathy.
Given the dismal situation of rental accommodation, most tenants have no choice but to accept leases without ever having the option to negotiate, either the rentals or the lease terms and conditions. They are also required to pay security or damage deposit before taking occupation.
While deposits are paid up front, it is refundable seven days after the accommodation is vacated in terms of the Rental Housing Act 50 of 1999.
This delay often creates difficulties for the poor and middle-income tenants who need their deposits for the following landlords. Tenants are further burdened with lease and inspection costs. They pay lease costs for contracts that are generally computer-generated standard documents or ones obtained from certain stationery stores. Concluding a lease by landlords or their representatives such as attorneys and lettings agents is merely a perfunctory chore of inserting the parties’ details and minimal information.
Letting agents levy a charge for inspecting the property with the tenants. The joint incoming inspection provides an inventory list, including any defect, to establish the condition of the property and any content (e.g. if it is let furnished or party furnished) at the inception of the lease.
This has a direct bearing on the right and duties of the parties and on the security deposit providing a vital source of evidentiary document.
There are other factors that burden tenants, but what is clear is that the law, skewed in some instances as it may be, certainly does not favour tenants. The Rental Housing Act protects the rights of landlords and tenants, and provides for a dispute resolution when parties fail to fulfil their obligations.
Dr Sayed Iqbal Mohamed is the chairperson, Organisation of Civic Rights and deputy chairperson of the KZN Rental Housing Tribunal. He writes in his personal capacity. For advice, contact Pretty Gumede or Loshni Naidoo on 031 304 6451 / [email protected] or [email protected]