The rules for handling rental deposits are very clearly outlined in the Rental Housing Act, and yet certain misconceptions still abound amongst landlords and tenants, says Rawson Property Group.<\/p>\n
The group’s Jacquie Savage shed some light on a few of the most common questions people have about deposits, during and after the conclusion of their lease.<\/p>\n
Who is responsible for managing the deposit?<\/strong><\/p>\n \u201cA tenant\u2019s deposit is typically held by the person or company managing the rental relationship. This could be a managing agent, or it could be the landlord,\u201d said Savage.<\/p>\n \u201cIt\u2019s normally quite easy to tell who is responsible, since they\u2019ll be the ones collecting your rent.\u201d<\/p>\n It can, however, get confusing when an agent is used to facilitate a lease agreement, but does not take over the management of the contract thereafter. This is known as an ‘unmanaged lease’, and places full responsibility for the running of the rental process \u2013 and the deposit \u2013 in the landlord\u2019s hands.<\/p>\n \u201cIn these cases, tenants often see an agent\u2019s logo on their lease agreement and assume that\u2019s the person holding their deposit,\u201d said Savage. \u201cIn reality, if that agent isn\u2019t managing the rental property, they have absolutely no control over \u2013 or access to \u2013 the deposit funds.\u201d<\/p>\n Why are there separate deposits for damages and services?<\/strong><\/p>\n Many tenants these days will be faced with two deposits when signing a lease: one for damages and one for services.<\/p>\n Contrary to popular belief, this has nothing to do with landlords \u201cdouble dipping\u201d and everything to do with making it faster for tenants to get their money back when they move out.<\/p>\n \u201cMunicipal services bills are notoriously slow to arrive,\u201d said Savage, \u201cwhich means it often takes weeks to finalise what a tenant owes for their last month\u2019s water and electricity. To avoid having to hold back the entire deposit \u2013 which is usually two whole months\u2019 rental \u2013 we prefer to keep a small services deposit aside to the value of a few hundred rand. This lets us refund tenants their much larger damages deposit while we wait for the municipal bill.\u201d<\/p>\n How quickly must the damages deposit be returned?<\/strong><\/p>\n In a perfect world, the refunding of deposits would be instantaneous, but reality involves a little more admin when it comes to tying up loose ends.<\/p>\n If there are no damages<\/strong><\/p>\n \u201cIf there are no damages found during the outgoing inspection, the deposit must be refunded, in full, within seven days,\u201d said Savage. \u201cThis isn\u2019t because landlords or agents are slow or lazy \u2013 it can literally take days to complete the processes required to transfer these funds.\u201d<\/p>\n If there are damages<\/strong><\/p>\n If damages are found during the outgoing inspection, the landlord (or their representative) has fourteen days in which to fix these and return the remainder of the deposit to the tenant.<\/p>\n \u201cThe tenant has the right to see two comparative quotes, and all the receipts for the finished work,\u201d said Savage, \u201cbut may not nominate their own contractors or quibble about the price.\u201d<\/p>\n If no outgoing inspection takes place<\/strong><\/p>\n If the landlord or their representative doesn\u2019t conduct an outgoing inspection, they forfeit the right to deduct any damages from the tenant\u2019s deposit, and must refund the tenant within seven days.<\/p>\n If, on the other hand, the tenant fails to attend the inspection, they forfeit the right to contest any damages the landlord may claim. The landlord then has seven days to inspect the property, and an additional 14 days to implement repairs, giving them a total of 21 days within which to refund the balance of the deposit to the tenant.<\/p>\n \u201cKeep in mind, tenants can always insist on seeing the receipts for repairs paid for out of their deposit,\u201d said Savage, \u201cso landlords can\u2019t deduct money they didn\u2019t spend, even if the tenant misses the outgoing inspection.\u201d<\/p>\n Can the deposit be used during the lease?<\/strong><\/p>\n \u201cAs a rule, deposits shouldn\u2019t be touched until the lease is concluded,\u201d said Savage. \u201cThey are certainly not a convenient fund for repairs, maintenance or improvements. If a tenant suspects deductions are being made from their deposit for any reason, they have the right to request a current statement for the account, at any time. Any unexplained transactions can be taken to the Rental Housing Tribunal.\u201d<\/p>\n Landlords may be tempted to allow tenants to use their deposit in lieu of rent in tough times, but Savage describes this as extremely dangerous, as it doesn\u2019t contribute to proof of breach of contract if non-payment continues.<\/p>\n Deposits are occasionally used to cover the last month\u2019s rental, but Savage advises against this as well, as the remainder may not be enough to cover any unexpected damages, Rawson said.<\/p>\n
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