WHY THE URGENCY IN REFUNDING A TENANT'S DEPOSIT?
Category Advice
The tenant/landlord relationship need not be an acrimonious one if both parties act reasonably and within the stipulations of the lease agreement. Such lease agreement must, of course, be aligned to the Rental Housing Act no. 50 of 1999 (as amended in 2014) (RHA) and the more recently enacted Consumer Protection Act of 2008. As experienced property managers in the residential and commercial letting arena Steer & Co have identified the deposit refund process as causing the majority of tenant/landlord disputes. This article explains the cause for confusion sometimes experienced by both tenants and landlords when dealing with the deposit refund process.
In identifying the deposit refund process as the cause of most tenant/landlord disputes, we align with the findings of the Rental Housing Tribunal who are party to thousands of complaints lodged by both tenants (vast majority) and landlords. They confirm that the time taken in refunding a tenant's deposit, the quantum of damages deducted from a tenant's deposit and the basis upon which the liability for damages is determined, are the biggest causes of disputes. What does the legislation say about the refunding of deposits?
What is the determination of damages based on?
Damages to the leased premises and outstanding payments due in terms of the lease, are the main cause for deductions from a tenant's deposit. The damages for which a tenant is liable are determined by comparing the joint {RHA clause5 (3)(e)} ingoing inspection to the joint {RHA clause 5 (3)(f)} outgoing inspection, where the condition of the premises at the commencement of the lease and at the termination of the lease is measured against each other. The premises should be in the same condition as when the tenant took occupation, with an allowance for fair wear and tear. Common damages for which a tenant is held liable for is the cleaning of carpets, sanding of wooden floors that have been scratched, repainting where walls have been marked, replacement of broken light fittings etc.
When do inspections take place?
The ingoing inspection should {RHA clause 5 (3)(e)} ideally take place before the tenant moves into the dwelling. The outgoing inspection should {RHA clause 5 (3)(f)} take place within a period of three days prior to the expiration of the lease, but from a practical point of view ideally needs to take place when the outgoing tenant has removed their belongings from the leased premises so that potential damages are visible. Given the logistics associated with 'moving day' it isn't always possible to align the schedules of tenants and landlords (or their representatives) so that inspections are done when the dwelling is free of furniture. Where this isn't possible, care must be taken by both parties, to check for possible damages.
What costs can be deducted from the deposit?
The RHA clause 5(3)(g) specifies that all amounts for which the tenant is liable under the lease agreement, "including the reasonable cost of repairing damage to the dwelling during the lease period and the cost of replacing lost keys" may be deducted from the deposit and accrued interest.
When should a tenant expect their deposit to be refunded?
Where there are no amounts due or owing by the tenant to the landlord in terms of the lease, the deposit and all interest accrued thereon should be refunded to the tenant within 7 days of expiration of the lease as contained in the RHA clause 5 (3)(i).
Where there are deductions from the deposit for damages by the tenant, the remainder of the deposit must be refunded to the tenant by not later than 14 days of restoration of the dwelling to the landlord per clause 5 (3)(g) of the RHA.
Where a tenant fails to respond to the landlord's request to attend a joint outgoing inspection, the landlord is to conduct an inspection within 7 days of the lease expiry and refund the balance of the deposit and interest, following deductions for any damages/lost keys, within 21 days after the expiration of the lease per clause 5 (3)(m) of the RHA.
The RHA {Clause 5 (3)(h)} also highlights the right of a tenant to request copies of the landlord's receipts showing the costs associated with remedying any damages for which the tenant is liable.
We experience that these deadlines can sometimes be a challenge when trying to obtain quotations and then invoices from contractors who repair the damages to dwellings. Effective communication with tenants becomes vital when incurring such delays, so that they can understand the background to any delays in receiving their deposit back. In most cases, tenants are understanding of this, especially when notified in advance.
Author: Nina Vass