Expert Tips to Get Your Rental Deposit Back

Expert Tips to Get Your Rental Deposit Back

Expert Tips to Get Your Rental Deposit Back

 

Because of the economic fallout caused by the Covid-19 induced lockdowns, many tenants are being forced to move to cheaper homes, and are looking to free up their full deposits in order to secure their next lease. Apart from unpaid rent and damage to the property, are there any other valid reasons for a landlord or agent to make deductions off a tenant’s security deposit? Ben Shaw, CEO of digital rental specialist HouseME, delves into circumstances that could affect the return of your full deposit, and what to do if your landlord refuses to refund you.

Many tenants are unaware that interest on their security deposit is due to them, and that the landlord or agent is obliged by law to hold their deposit in a separate interest-bearing trust account. If there are no claims on the deposit, the full deposit plus interest must be returned to you within seven days of the lease expiring.

If there are claims, the landlord must return the balance (if any) of the deposit within 14 days of the lease expiring, and these claims can generally be grouped as money still owed to the landlord in terms of the lease, or damages to the property that goes beyond normal wear and tear.

Fees and arrears

Have you paid your rent and utilities in full and on time?

If the answer is no, then your landlord or rental agent can charge you for missing payments on rent or utilities and deduct this from your security deposit. These charges can include banking fees from failed debit orders, or the cost of issuing a letter of demand where applicable. Your lease is likely to explicitly state what these are, so there shouldn’t be any surprises.

Have you cancelled your lease agreement early?

One thing this pandemic has taught all of us is that a lot can change in 12 months. You may have signed a fixed-term lease and now need to cancel it. However, when a tenant cancels early, this cancellation is subject to a reasonable cancellation fee which is usually the equivalent of one or two full months’ rent.

Does your lease agreement mention a deposit administration fee?

Some lease agreements specify a deposit administration fee. This is a fee agents can charge to hold your security deposit. The deposit administration fee can be in the form of a monthly or once-off fee which becomes deductible from your security deposit. However, it is seldom higher than the interest earned.

Damages

If after the mutual outgoing inspection, your landlord wishes to claim for damages, he or she is required to present invoices for the monies held back. Claims regarding damages are often where landlords and tenants don’t see eye to eye.  If your landlord refuses to refund your deposit, these tips may help you get it back:

Have a look at the clause in your lease agreement regarding your security deposit.

This clause should specify permissible deductions, so familiarise yourself with these and be prepared ahead of negotiations.

Attend your outgoing inspection.

This is a great opportunity for the landlord to point out any damages that you’re liable for, and for you to negotiate if that’s not reasonable. Compare those damages to the ingoing snag list if you are disputing any claims.

Have an honest and open discussion.

If you’ve had a great relationship with your landlord for the duration of your lease, sometimes an open and honest conversation about any invoices and deductions that you are not in agreement with can help you reach an amicable settlement.

 

As a final recourse, approach The Rental Housing Tribunal 

The tribunal provides a free service to tenants and landlords in South Africa, and its main function is to settle disputes between tenants and landlords.

And finally, some advice on how to minimise your chances of being in the same position again:

When formalising your next lease, consider signing up for HouseME’s DepositFREE product. Now especially, many tenants do not have two months’ security deposit at the ready. DepositFREE allows tenants to pay a little extra on their rent each month, in exchange for not needing to put down a deposit at all. 

Document the condition of your new home in detail at the time of occupation. Your ingoing inspection is just as important as your outgoing inspection. It is essential that both landlord and tenant agree on the condition of the property at the date of occupation. Note every fault in writing, no matter how trivial it may seem. Back this up with photographs or a video of the damages or problem areas, and supply the landlord or agent with a copy of the snag list as well as the photographic evidence. Now is also a good time to check with the landlord or agent that your deposit will be held in an interest-bearing trust account.

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Resolving Disputes in Sectional Titles

Resolving Disputes in Sectional Titles

Resolving Disputes in Sectional Titles

A fallout with the body corporate, a neighbour, or trustee over issues pertaining to your sectional title property needn’t be a stressful, highly-charged, drawn-out, or costly affair when most disputes can be settled internally or via the community schemes Ombudsman. Sectional Title schemes fall within the jurisdiction of this Ombud and any person who is either a party to or materially affected by a dispute concerning a community scheme may submit an application for adjudication.  

The entire process is designed to be approachable and as streamlined as possible in order to settle disputes between parties in a user-friendly yet effective format similar to other statutory adjudication bodies like the CCMA and the Rental Housing Tribunal.

The Sectional Titles Schemes Management Act 8 of 2011 provides for set categories that the rules of each scheme are required to regulate; however, it does leave room for specific non-prescribed regulations. The rules that fall outside of these parameters are not as absolute as applicable legislative provisions or other forms of legal policies; however, if one wishes to avoid settling disputes inside of a courtroom, the sensible thing would be to do your research prior to purchasing a unit and make sure that you are aware of the extent of your levy contributions as well as what you may or may not do with your property.

Developments in the form of a new bill have been proposed which aim to amend the Sectional Title Act, and if approved by parliament will:

  • Afford improved protection toward homeowners;
  • Enhance accountability of developers of schemes;
  • Alter the manner and the documents required in consideration for the extension of the scheme;
  • Extend the definition of exclusive-use areas;
  • Allow for holders of rights to a unit to be able to benefit from alienation and lease of common property.

Charles De Meillon, Candidate Attorney at boutique law firm Gillan & Veldhuizen Inc., says that having an understanding of the underlying principles of how Sectional Title schemes work – the rules, regulations, and conflict resolution platforms available – is vital. 

The body corporate, consisting of all the owners, and the developer in specific circumstances, is a juristic entity which is managed by the trustees of the body corporate and acts through resolutions voted on by its members; as a result of this nature, the body corporate has a statutory duty of care and skill when performing its functions.  “The size of your property sets out the proportional allocation of ownership, the voting power of each section’s owner as well as the extent of your liability for the scheme’s upkeep, based on the rules of the body corporate,” De Meillon explains.  

If you (as an owner) find yourself in a situation where you believe that your sectional-title is being mismanaged or that there is a breach of the agreed-upon standards and rules, or if you have an internal dispute with another resident, trustees/members of the body corporate and other administrative issues,  then you can file a complaint with the Community Schemes Ombud Service (CSOS). This statutory dispute-resolution service was established in October 2016, and provides a platform for settling disputes that cannot be resolved internally.

There are specific details that need to be included when lodging a dispute with CSOS, such as:

  • The nature of the relief sought; 
  • Names and addresses of all affected parties;
  • Submissions surrounding fees and costs of the application as well as the overall grounds upon which the relief is based.

An application must further prove that the desired relief can be interpreted to be within the scope of adjudication of CSOSA.  These grounds are extensive and cover areas of relief such as financial or monetary awards, behavioral or specific performance-based claims, alterations to internal rules or governance, and other general issues that may be experienced.

It is imperative to learn about the common rules and acceptable norms within the community that each scheme creates so as to navigate the management guidelines and keep disputes amicable, and only consider litigation only as a last resort.

READ MORE Rules for changing the rules of your sectional title scheme

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