We often have clients that insist on doing their own leases and deal with the deposits of the tenants as they please. Please note however that it is not a good idea, nor are we as registered agents that collected the deposit allowed to transfer the tenants deposit to the Landlord.
The purpose of a deposit and what should be done with it at the expiration of a lease is regulated primarily by the Rental Housing Act (“Rental Act”). The Rental Act provides that a landlord may require a deposit at the beginning of the lease and the deposit must be invested in an interest-bearing account with a financial institution, which interest rate may not be less than the rate applicable to a savings account with that financial institution.
The Rental Act also provides that a tenant may request written proof in respect of interest accrued from the landlord, and on receipt of this request, a landlord must provide such proof to the tenant.
The landlord may apply the deposit and interest earned thereon for the reasonable costs of repairing damage caused to the property at the termination of the lease. The balance of the deposit, together with the interest amount must be refunded to the tenant by the landlord no later than 14 days from the restoration of the property to the landlord. Where no amounts are due and owed to the landlord the deposit and interest accrued thereon must be fully refunded to the tenant by the landlord within 7 days of the expiration of a lease agreement.
It is also VERY important to note that if the landlord does not inspect the property with the tenant, he is deemed to acknowledge that the property is in a good and proper state of repair, and the landlord will have no further claim against the tenant who must then be refunded, the full deposit plus interest by the landlord.
It may be noted that where the landlord is a registered estate agent in terms of the Estate Agency Affairs Act the deposit and the interest accrued thereon is dealt with in accordance with that Act.
SO, if you are a private Landlord and not an estate agent make sure you know your rights and obligations as a Landlord ito the Rental Act, or better yet, contact PERFECT PROPERTY SOLUTIONS to deal with all your property issues.
Contact us for a discussion or quotation TODAY on 021 762 0092
(Adapted : 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.)