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Golden rules for tenants, landlords

What they can and cannot do.

Tenants

The dynamic of the tenant / landlord relationship is often fraught with frustration but following these steps will help to ensure the tenant understands his rights as well as his obligations. Moreover, following this advice could prove particularly valuable where it counts most, money saved and maintaining a good credit profile.

Firstly, there are processes for tenants to follow to ensure that they are protected against unscrupulous landlords and enjoy a hassle free renting experience. Know your agent or landlord. Never hand over cash, rather make an EFT. Always see a copy of the estate agent’s fidelity fund certificate.

Tenants should read through the lease agreement before they sign anything, taking note of details such as the date the rent is due and the extra costs they are liable for, such as water, electricity, refuse and sewerage. The lease agreement is also the appropriate place to record any maintenance issues which the landlord or his agent has promised to attend to. Non-maintenance by the landlord is one of the most common reasons which lead to tenant frustration and often the withholding of rent. Unfortunately, withholding rent is an act of breach by the tenant which will negatively impact the tenant’s credit profile.

It’s important to put a budget together. Tenants need to calculate the rent that they’re able to afford on a monthly basis and ensure that they include extra costs such as electricity in the calculation. The cost of electricity has spiralled significantly over the last few years with further hefty increases in the years to come.

An incoming inspection in the presence of the landlord is a must to make a record of pre-existing defects. While the landlord is not required to repair the defects, he will not to hold the tenant liable for them at the end of the lease. The same goes for reporting maintenance issues immediately. The sooner they are repaired, the less costly it is.

It is equally important to perform an outgoing inspection with the landlord. If no damage is found, the deposit must be returned within seven days. In the event of damages, what remains of the deposit will be returned 14 days after the damage has been repaired. The best way for tenants to avoid being held liable for damages is to treat the property as though it is their own.

In order to maintain a sound credit profile, tenants must pay rent and electricity at the right place and time. Remember there is no seven-day grace period. Rent must be paid in full on the date stipulated in the lease agreement, usually the first. Communication with the landlord is important: tenants should notify the landlord in advance if there is going to be a problem with paying the rent in full so that a payment plan can be devised, which the tenant must stick to. The landlord does not have to accept the proposed payment plan, but most landlords are open amicable resolution so long as this is not an on-going pattern of behaviour or abuse.

Finally, tenants may not withhold the last month’s rent and request that the agent use the deposit for this purpose. This is a breach of contract and will result in a default on the tenant’s credit profile.

Landlords

From the outset, it’s vital to ensure that the tenant you choose will not default on the rent or electricity, cause damage to the property or result in costly legal fees. A simple credit check will enable landlords to view the credit history of all tenants and co-tenants.

While leases can be written or verbal, a written lease provides the best protection. It is unwise to take the property off the market until the tenant has signed the lease agreement and paid the deposit. The same applies for handing over the keys of the property, which should only be done once the agreement is signed and the first month’s rent has been paid in full and cleared.

If you want to attract the right type of tenant, make sure that the property is maintained to its full advantage. In this way, you’re also able to avoid the risk of the tenant withholding rent for maintenance. A well-maintained property will provide rental income and capital growth – don’t lose value on the property due to non-maintenance.

Landlords are advised to send monthly invoices to tenants. This should be done before the 26th of the month to ensure that rent is collected timeously. Act quickly – if the rent is in default by the second of the month, you are within your rights to send a letter of demand. Both the National Credit Act (NCA) and the Consumer Protection Act (CPA) allow for 20 days once the letter of demand has been served, after which the landlord can load a default on the credit bureau, cancel the lease and demand that the tenant vacate the premises.

Ultimately, a landlord should know his rights, particularly when it comes to non-payment of rent. Tenants must pay the full month’s rent and other costs monthly on the first of the month at the right time and place. If not, the tenant is in breach of contract.

*Michelle Dickens is managing director of TPN

Image source: “Real Estate Sale” from Bigstock

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