01 Aug 2013
Letting and managing a property requires a lot of time and commitment, therefore it is of critical importance that a landlord selects a rental agent who is fully compliant with the vetting process.
The objective of the vetting process is to empower the rental agent to make an informed decision on behalf of the landlord as to the calibre of the prospective tenant, to be certain of the ability of the tenant to pay their rental to the landlord and for the rental agent to establish a good relationship with the landlord.
Marlon Shevelew, director of Marlon Shevelew and Associates Inc, a firm specialising in Landlord and Tenant Law and Contractual and Consumer Law, says that incoming and outgoing inspections are essential and compulsory actions that allow for the deposit, upon expiration of the lease period, to be used to fix any damages to the property caused during the lease.
"The deposit itself is an amount which is held by either the agent or landlord as security that the premises will be restored to the landlord in the same condition as at commencement of the lease, except for fair wear and tear.”
A recent survey by Rentshield highlights the challenges faced by landlords and rental agents in managing rental properties. The majority of agents’ time is taken up by administration, leaving them little time to grow their property portfolios, market their businesses or better service their existing clients. Incoming and outgoing inspections account for 72 percent of this admin, followed by maintenance (62 percent), vetting of potential tenants (40 percent), lease renewals (34 percent), legal procedures (31 percent), evictions (29 percent), and deposit disputes (24 percent). Underlining the above statistics, 3 percent of respondents say the rental deposit always covers damages to property.
It’s important to note that, according to the Rental Housing Tribunal, if the landlord does not do the outgoing inspection in the presence of the tenant, it is deemed an acknowledgement that the property is in a proper state of repair, and the landlord will be responsible for refunding the tenant’s deposit in full, plus any interest.
However, if a rental agent places a tenant in a property and the tenant has not been vetted thoroughly, itcould be seen as a dereliction of duty on behalf of the agent. In these circumstances the landlord, in terms of section 54 of the Consumer Protection Act (CPA), would have the option of asking the rental agent to make good on its breach or to refund a portion of the commission for their inability to attend to services correctly.
Rentshield, a new 'zero deposit' solution launched by Torus Capital, offers landlords holistic coverage when things go wrong. It provides landlords and estate agents with a comprehensive online tenant vetting facility, and they take care of all incoming and outgoing inspections at no expense to the landlord or estate agent. The solution protects landlords against the stresses associated with residential letting, including non-payment by the tenant (for up to three months) and repair of the property (up to the value of one month’s rent). Rentshield will also take care of the eviction, ensuring that all legal processes are followed efficiently and to the letter of the law, covering the landlord’s legal expenses up to the value of R50 000.
Martin Goodman, director of Torus Capital, says the solution will save the rental agent time and money and assist them in paying attention to their bottom line which is to grow and market their business.
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