Cancelling Lease and Deposit Refund?

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28 Feb 2013

A Property24 reader asks:

A reader says he was unexpectedly transferred and had to cancel a lease after 3 weeks, but now is are battling to get the deposit back. What can he do?

We rented, stayed for 3 weeks and then unexpectedly had to move to East London for work reasons. 

There is a clause in our agreement saying we will only get our deposit back once the flat is let out again. 

It is now 5 weeks later and the estate agent is avoiding us. 

Please advise what action I can take if any? Also, the estate agent never mentioned interest on my deposit, plus I am still paying a cancellation fee. 

Michael Bauer, general manager of IHFM, a property management company with offices in Cape Town and Gauteng, advises:

The Consumer Protection Act states that 20 days' notice can be given to the landlord to cancel a lease, but there is a penalty fee to cancel a lease.  

The cancellation amount is not stipulated by law but it says a “reasonable” penalty can be charged to cancel the lease.  

In my opinion four to six weeks rent to find another tenant is reasonable. If an advert is placed immediately, a new tenant will usually be found fairly quickly. 

The deposit refund (less the amount to advertise the property again and less damages) must be paid to the tenant within seven days of the property being vacated. 

Usually it takes 14 to 21 days to sort out amounts owed if there are damages to the property because the agent or landlord would have to get quotes for repairs; or the tenant can offer to do repairs himself or arrange for the repair work to be done himself.  

All interest accrued on the deposit is due to the tenant, according to the Rental Housing Act, so the tenant must check that this amount (however small it might be) is added to the refund. 

If there are problems it might be necessary to go to the Rental Housing Tribunal and in most cases of landlord/agent and tenant disputes this is the way to sort it out.   

One point to remember though, just because the agent is managing the property doesn’t mean the landlord is not responsible for money owed to the tenant. The relationship is between the landlord and the tenant and the landlord is ultimately responsible for what happens to that property and the money to be refunded to the tenant. 

Readers may submit questions to Property24’s Guest Expert panel and/or comment below. We may not be able to answer all questions received, but all will be considered. 

About the Author
Michael Bauer

Michael Bauer

Michael Bauer is general manager of IHFM, a sectional title management company with offices in Cape Town and Gauteng, and also contributes regularly to www.sectionaltitlesa.co.za and www.lessor.co.za. For further information on IHFM go to www.ihfm.co.za.

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