Tenant Screening and Selection
How can I screen potential tenants effectively?
Screening tenants is critical to avoid potential issues. Follow these steps:
- Use a rental application form to collect key details (personal, financial, and employment information).
- Perform a credit check via agencies like TPN or Experian.
- Verify employment and income to ensure the tenant can afford rent.
- Contact previous landlords for references on payment habits and behavior.
- Look for red flags such as late payments, evictions, or inconsistencies.
What documents should I request from prospective tenants?
Request the following:
- Proof of ID: A valid South African ID, driver’s license, or passport.
- Proof of income: Recent salary slips or bank statements (3-6 months).
- Employment confirmation: A letter from their employer confirming their position and income.
- References: At least one reference from a previous landlord.
- Credit check authorization: Written consent to perform credit checks.
How do I verify a tenant’s employment and income?
- Call or email the tenant’s employer to confirm employment.
- Cross-check income with salary slips and bank statements.
- Ensure the income is stable, with rent not exceeding 30% of the tenant’s gross monthly income.
Lease Agreements
What must a legally binding lease agreement include in South Africa?
Under the Rental Housing Act, a lease must include:
- Landlord and tenant’s full names and contact details.
- Property address and description.
- Monthly rental amount and due date.
- Deposit amount and terms.
- Lease duration (fixed or periodic).
- Maintenance and repair obligations.
- Rules regarding subletting and pets.
- Termination and renewal conditions.
Can I create a month-to-month lease agreement?
Yes. If the lease term expires and neither party provides notice, it defaults to month-to-month. Ensure you formalize terms, including rental amount and notice requirements.
How do I make changes to an existing lease agreement?
- Any changes require written consent from both the landlord and the tenant.
- Draft a formal addendum outlining the changes.
- Both parties must sign the addendum for it to be valid.
Rental Deposits
What is the legal amount for a rental deposit in South Africa?
There is no legal limit, but the norm is one to two months’ rent. Ensure the deposit amount is agreed upon and documented in the lease.
How must the tenant’s deposit be handled?
- The landlord must place the deposit in an interest-bearing account.
- The interest accrued must be paid to the tenant when the lease ends, less any lawful deductions.
- Upon tenant request, provide proof of interest earned.
What deductions can I make from the deposit at the end of the tenancy?
- Unpaid rent or utilities.
- Repair costs for damages beyond fair wear and tear.
- Cleaning fees if the property is left dirty (must be included in the lease).
Note: A thorough exit inspection with documented evidence is key to justify deductions.
Rent Collection and Arrears
What is the best way to collect rent monthly?
- Use debit orders or EFTs for automated, traceable payments.
- Clearly specify payment dates in the lease.
- Provide tenants with banking details and payment references.
How do I deal with late or unpaid rent?
- Send a formal written reminder as soon as rent is overdue.
- If unresolved, issue a Letter of Demand giving the tenant at least 7 days to pay.
- For continued non-payment, you may start the eviction process (following the PIE Act).
Can I charge interest on late rental payments?
Yes, if specified in the lease agreement. The interest rate must comply with the National Credit Act, generally capped at 2% per month.
Tenant Eviction Process
What is the legal eviction process in South Africa?
The eviction process under the Prevention of Illegal Eviction Act (PIE) involves:
- Issuing a formal written notice for breach of contract.
- Filing for an eviction order in the Magistrate’s Court.
- The court serves notices to the tenant to respond.
- If justified, the court grants an eviction order, enforced by the sheriff.
When can I legally evict a tenant for non-payment?
Only after:
- Issuing a Letter of Demand with a reasonable grace period.
- Proving to the court that the tenant failed to remedy the breach.
How long does an eviction process take?
An uncontested eviction typically takes 3-6 months, but disputes can delay proceedings.
Property Maintenance and Repairs
Who is responsible for property maintenance?
- Landlord: Major repairs, structural issues, and maintaining facilities like plumbing and electricity.
- Tenant: Day-to-day maintenance, minor repairs, and keeping the property clean.
How do I handle repair disputes with tenants?
- Refer to the lease agreement’s maintenance clause.
- Use written communication to address disputes.
- If unresolved, escalate to the Rental Housing Tribunal.
Can I access the property for inspections or repairs?
Yes, but you must provide at least 24 hours’ written notice, and visits must be at a reasonable time.
Rental Increases
How much can I increase rent?
There is no legal cap, but increases must align with market rates. Excessive increases can be challenged at the Tribunal.
How often can I legally raise rent?
Once every 12 months for fixed leases. Month-to-month agreements require one month’s notice.
What notice period must I give for a rental increase?
One calendar month’s written notice is mandatory.
Termination of Tenancy
Under what conditions can I terminate a lease?
- Breach of lease terms (e.g., non-payment or property damage).
- Expiry of a fixed-term lease.
How much notice must I give to end a lease agreement?
One calendar month’s written notice, unless the lease specifies otherwise.
Property Inspection and Condition
When should I conduct property inspections?
- Entry inspection: Before tenant moves in.
- Periodic inspections: With proper notice.
- Exit inspection: When the lease ends.
Compliance with South African Laws
What laws govern residential rentals in South Africa?
- Rental Housing Act
- PIE Act (evictions)
- Consumer Protection Act (lease terms and notices)
Resolving Disputes with Tenants
What is the role of the Rental Housing Tribunal?
The Tribunal resolves rental disputes such as:
- Unreturned deposits
- Rent increases
- Maintenance disagreements
Taxes and Financial Concerns
Do I have to pay tax on rental income?
Yes. Declare rental income to SARS annually.
Click the blue link to join the South African Landlords Association (SALA).
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Disclaimer:
This post is for general use only and is not intended to offer legal, tax, or investment advice; it may be out of date, incorrect, or maybe a guest post. You are required to seek legal advice from a solicitor before acting on anything written hereinabove.