Rental Deposits and how they should be handled
Deposits and repayment thereof can sometimes be a point of contention between Landlords and Lessees and it is thus crucial to observe basic legislative requirements and ensure correct processes are followed.
The Rental Housing Act allows a landlord to request payment of a deposit prior to tenant taking occupation of the property.
This deposit should be clearly indicated in the lease agreement and the Landlord or his representative is then obliged to invest this deposit in an interest bearing account with a financial institution.
The tenant has a right to request a statement of interest received over the duration of the lease and this interest together with initial deposit amount MINUS any reasonable damage deductions and/or outstanding utility bills etc (written receipts/invoices to be provided) should be paid back to the tenant within 7 days should the property be handed over in a good state and up to 14 days should items need to be replaced and/or any maintenance work required.
We find it best practice to explain all of this upfront to both landlords and tenants to ensure no issues down the line.
In order to further ensure no disputes, a check in inspection (with date stamped photos of condition of the property) prior to handover must be completed and then a check out inspection at least 7 days prior to exit in order to verify condition on exit is the same as on entry.
If you have any questions regarding long term rentals and/or management thereof, please contact Cesar on cesar@kinesisproperty.co.za or call/whatsapp on +27 829316166
