MAIN IMAGE: Mike Spencer, principal of Platinum Global in Bloemfontein.
By Mike Spencer
Renting property used to be an easy exercise for the landlord and letting agent but things have changed because much of the controlling legislation is aimed at overprotection of tenants, and especially non-compliant agents.
The following are probably the five biggest headaches for rental agents:
Inability to pay rental
It is sometimes tempting to allow a marginal tenant to let a rental property rather than let the property stand empty. But this is a huge mistake and potentially a costly one. If a tenant cannot afford to pay the full deposit and first month’s rental when letting a property, they are likely to give problems later. Only let to tenants with a strong financial background who pay all the deposits, first month rental and application fees up front. Don’t be tempted to take on marginal tenants.
Landlords should not allow more than two tenants per bedroom. Your lease should clearly limit the number of people staying in the property. Overcrowding is a serious breach of the lease and those tenants with too many people should be given immediate notice. It may also be a breach of the rules of the homeowners’ association (HOA) or body corporate. The rules of the HOA or body corporate override any agreement you have made in your lease. A copy of the “house rules” must be attached to the lease agreement.
It can happen that a tenant will allow illegal people to stay in your property. This could mean having more than the number of people allowed or having illegal immigrants staying there. Your lease should note the names and ID numbers of the people who may stay in the unit. If the tenant breaches this rule, it allows you to give the problem tenant notice to vacate.
Unpaid water and electricity accounts
Most properties now have pre-paid meters that suspend the service if the money in the meter runs out. Do be aware that the new Rental Housing Act says that these meters must not switch off the service. It is best not to allow accounts to escalate. Give immediate notice to non-payers.
The ‘party people’
Late night noise that disturbs other tenants can be a major problem. It must clearly be covered in the lease agreement. Usually a lease will prescribe that there is a warning on the first occasion and that after that immediate notice will be given. Provision in the lease should be made for the tenant to pay any fine levied by the body corporate or HOA.
A good lease agreement is precise and easy to understand. It should clearly cover all the necessary rules of letting, including important body corporate/HOA rules and avoid being vague or flowery. Victorian English is not appropriate in modern South Africa.
Quality tenants are essential, and it is preferable to have a property stand empty rather than let it to a problem tenant. All breaches of the rules should be dealt with in a professional manner immediately, typically by first issuing a warning letter followed by a notice to vacate for a second offence. A copy of the “house rules” of the body corporate or HOA must be attached to any lease agreement.
About the author: Mike Spencer is the principal of Platinum Global in Bloemfontein and has been in real estate since 1975. He is a professional associated valuer and acts as consultant to developers and body corporates.
You are welcome to send any questions you may have on rental management to firstname.lastname@example.org.