Rental Housing Act and draft regulations under spotlight

Rental Housing Act and draft regulations under spotlight

MAIN IMAGE: Cilna Steyn of SSLR Incorporated

Staff Writer

On 18 March 2022, the Minister of Human Settlements published draft regulations in terms of the Rental Housing Act for public comment.

These draft regulations aim to produce a national set of regulations which will be applicable to all residential landlord- and tenant relationships throughout the country.

The benefits of standardising the rental industry on a national level are plain to see, but to establish a set of regulations which would be applicable, enforceable, and fair in respect of all different aspects of the rental industry is to say the very least, extremely challenging.

It is important to consider the broad spectrum of properties, scenarios and relationships which would be governed, with rentals on the one end there are properties with monthly rental in the excess of R 65 000.00 per month, and on the other end of the spectrum, where the tenant rents a portion of a room for R 250.00 per week.

The Legislature must consider both these scenarios and everything in between. The NPPC, with the legal support of Cilna Steyn of SSLR Incorporated, provided commentary on behalf of and representing the property industry to the Department of Human Settlements.

The draft regulations do not contain anything completely foreign to the rental industry, but primarily bring clarity and certainty to a decade long contention regarding the application of certain aspects of the Consumer Protection Act (CPA) to lease agreements. This application of the CPA, and consumer protection is essential to the rental industry. This is now confirmed in terms of the regulations. However, repetition of legislation creates an interpretational risk.

In addition to the above, the regulations govern the functioning of the Rental Housing Tribunal, procedures and appeal procedures which is in essence, like the current functioning of the Tribunal.

Amongst the most relevant aspects of the regulations are those regulating the relationship between landlord and tenant. For instance, the regulations introduce a maximum deposit of two months’ rent but allows for parties to agree to a higher amount.

Additional examples of these practical aspects provided for in the regulations include:

  • how items left on the premises after the tenant vacates should be dealt with
  • the landlord’s ability to charge actual disbursements incurred in the process of compiling the lease agreement, and
  • the prohibition of overdue payment penalties.

As comprehensive as they are, there are a few extremely helpful provisions found in the 2008 draft regulations which are not contained in these draft regulations including those dealing with:

  • the situation and effect of a lease agreement where a landlord or a tenant does not sign and deliver the lease agreement to the other party,
  • the specific maintenance rights and obligations of both parties,
  • the regulation of the required inspections and the use of a third-party inspector.

All the above omissions are addressed, and proposed regulations drafted, as part of the commentary.

A significant aspect of the regulations is the envisioned standard lease agreement, as contemplated in the unpromulgated Rental Housing Amendment Act, 35 of 2014. This standard lease agreement forms part of the draft regulations but is not addressed in the above-mentioned commentary for the simple reason that most members of the NPPC typically use lease agreements which already comply with the provisions of the standard lease agreement.

For instance, the breach- and many other clauses follow the form and content of the widest used lease agreement in South Africa, being the TPN Residential LeasePack lease agreement. This illustrates the intension of the Legislature not to unsettle, but rather standardise the residential rental industry. The regulations do not compel the use of the lease agreement but requires substantive compliance with its content.

The commentary is contained in a 52-page document and cannot be repeated herein. It is however relevant to know that these comments were made in consultation with the rental industry and, if incorporated into the final regulations would be beneficial to the landlord, tenant, property practitioner and industry as a whole.

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