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How the law affects your rental property, in a nutshell

17 Jul 2019

Property News

Brought to you by Property24

Thinking of getting into the rental business, or already a landlord? Then you should know that the rental property landscape is becoming more complex by the day.

The rental property landscape is becoming more complex by the day, and landlords need to ensure they comply with all applicable legislation.

Knowledge and awareness are essential, whether you are the landlord or the tenant, says Natalie Muller, rentals manager for Seeff Atlantic Seaboard, Waterfront and City Bowl.

The latest addition to the legislative burden is the Rental Housing Amendment Act, which places more stringent obligations on landlords, with failure to meet these a criminal offence. These include providing your tenant with a written lease agreement, ensuring the property is fit, habitable and maintained, and that the landlord may not cut utilities (e.g. electricity) to the dwelling, nor may they lock the tenant out of the premises. There are also stricter guidelines with regard to deposits.

Additionally, there is actually a slew of legislation and regulations which impact rental property. Muller highlights a few important legalities:

1. Rental laws

The primary legislation that governs rental property is the Rental Housing Act 50 of 1999 and the Amended Rental Housing Act 35 of 2014, which regulate the behaviour of tenants and landlords, the property and handling of deposits. It also provides for the Rental Housing Tribunal to assist tenants and landlords with disputes, rather than having to go an expensive legal route.

2. Sectional title property

The Sectional Title Management Act 8 of 2011 (STMA) regulates this type of property, including rentals. Regulations include keeping the body corporate informed of incoming and outgoing tenants, ensuring your tenant has a copy of the conduct rules and that they keep within the rules of the complex. The Act also allows for a tenant to take their grievances about a building or unit owner to the Sectional Title Ombud, where previously they only had the Rental Housing Tribunal.

3. Evictions

The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 19 of 1998 (PIE Act) governs evictions. It is always a challenge for property owners when their tenants stop paying and they have to be evicted because strict procedures need to be followed. You cannot just throw people out of your property, nor can you change the locks. The process is onerous and potentially costly, making the vetting and ongoing tenant and property management process vital.

4. Lease agreements

The Law of Contract and Common Law provisions guide the contents of lease agreements, which must comply with many legalities affecting rental property, including how it must be signed and witnessed. These days, a lease can, for example, be signed electronically and be seen as binding in terms of the Electronic Communications and Transactions Act 25 of 2002. Ensuring a thorough lease that guides all aspects of the rental property and tenancy is always in the best interest of both landlord and tenant.

5. Capacity to enter into rental agreements

Several laws come into play when it comes to who and how rental contracts must be signed. These include the Matrimonial Property Act 88 of 1984 which regulates consent and capacity to contract in respect of marriages out of community of property and foreign marriages. In terms of the Immigration Act 13 of 2002, foreigners must have a valid visa from the Department of Home Affairs (e.g. study visa, work permit, refugee permit, temporary or permanent residence permit) to lease a property. Capacity to transact on behalf of a company is regulated by the Companies Act 61 of 1973, while trusts fall under the Trust Property Control Act 57 of 1988, specifically that since a trust is not a legal entity, it would be the trustees who will enter into the contract and be a party to any dispute.

6. Cancellation and rental deposits

Since renting of property is seen as a fixed-term agreement, the Consumer Protection Act 68 of 2009 (CPA) affords a tenant the right to terminate for no reason whatsoever, subject to agreed penalties, which should preferably be defined on the signing of the lease. Refunding of the rental deposit is regulated by the rental laws referred to above.

7. Financial aspects

Any VAT applicable will be regulated by the Value-added Tax Act 89 of 1991. Penalties fall under the Conventional Penalties Act 15 of 1962. A lease can contain a clause regarding penalties for breach, such as late payment and arrear rentals, and the tenant would be bound to pay interest if this is part of the written agreement. The Debt Collectors Act 114 of 1998 regulates how moneys owed by the tenant or landlord are to be collected.

8. Use of the property

In addition to the above, the municipal bylaws regulate how you can use the property, including aspects such as noise and encroachments, and regulates the relationship between neighbours. The lease agreement will also usually stipulate how the property is to be used, and what conduct would be unacceptable. In the case of a sectional title property especially, the landlord should ensure that a copy of the conduct rules is provided and that the tenant understands the conditions of occupancy.

9. Protection of private information

The Protection of Personal Information Act 4 of 2013 (POPI) is now on the cards, and once fully operational provides protection for the private information of tenants, regulating that personal information must be correctly stored and not shared for gain.

10. Choosing an agent

In terms of the Estate Agency Affairs Act 112 of 1976, all rental agents must be in possession of a valid Fidelity Fund Certificate. The Act also regulates the manner in which an agent conducts themselves and the handling of the deposit by the agent. Ensuring that you only work with a credible agent is vital, and Muller says you should never hand over money or pay deposits to anyone before verifying the legitimacy of the agent and property.

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