MAIN IMAGE: Maryna Botha – STBB executive consultant, Thato Ramaili – PPRA CEO, Jan-Otto van Eck – Chas Everitt International
Kerry Dimmer
Charging prospective tenants to view a rental property is raising eyebrows in Cape Town’s tight rental market. Following concerns highlighted on Cape Talk, questions are now being raised about whether rental agents are legally allowed to charge tenants, often non-refundable viewing fees, to see a property before applying.
The answer, however, is not straightforward.
Neither the Rental Housing Act, the Consumer Protection Act, nor the Property Practitioners Act explicitly addresses viewing fees, leaving the issue in a legal grey area.
Understanding whether the practice is permissible, therefore, requires interpreting the intent behind relevant provisions in these laws and considering how they might apply if a complaint were lodged.
Maryna Botha, executive consultant at legal firm STBB, says the practice can have both positive and negative implications.
“The practice has elements that may give rise to or allow for abuse, but it can also serve positive purposes such as reducing ‘no shows’,” she says. “Assuming the agent holds a valid FFC, it could also be an opportunity to assist the prospective tenant in properly vetting the condition of the premises, which may enhance the inspection required before the commencement of the lease.”
Rental Housing Act: Inspection requirements and tenant protections
Botha points to section 5(3)(e) of the RHA, which requires the landlord and tenant to jointly inspect the property before occupation.
This inspection is intended to identify any defects or damage in the dwelling, determine responsibility for repairs, or record the property’s condition prior to the lease commencing.
While the Act does not address viewing fees directly, the requirement emphasises the importance of proper property inspections before tenants move in.
Consumer Protection Act: Transparency and fair pricing
Two sections of the CPA may also be relevant, namely sections 23 and 48.
These provisions require that the price of goods or services must be clearly displayed and that contract terms must not be unreasonable or excessive.
“Should section 23 apply to this scenario, it will not be contravened if the price of the ‘viewing assistance’ is made known to the consumer beforehand and is reasonable,” says Botha, “Similarly, section 48 will not be contravened if the price is disclosed in advance and is not unreasonable or exorbitant.”
Property Practitioners Act: When a fee may be challenged
Consumers could potentially challenge viewing fees under section 63(2) of the PPA if they can show the practice harms consumers or damages the reputation of property practitioners.
This includes conduct that may:
- damage relations between property practitioners and the public
- unreasonably prejudice or deceive consumers
- unfairly affect any consumer or category of consumers
However, Botha notes that this would likely require a formal complaint to the Property Practitioners Regulatory Authority (PPRA) to have the practice declared undesirable. That possibility concerns Thato Ramaili, CEO of the PPRA. “There may be no provisions in the PPA, regulations or Code of Conduct that explicitly prohibit this specific practice,” she says.
However, regulation 34.2.1.1 of the Code of Conduct requires property practitioners to refrain from conduct that could undermine the integrity of the profession.
“This provision is very broad and may be interpreted as prohibiting the charging of viewing fees that are unethical because there is no reasonable justification for it”, Ramaili warns that such fees could open the door to consumer exploitation and restrict access to rental properties.
“It may be discriminatory against those who cannot or are unwilling to pay the viewing fee and provide an unfair advantage to those who can pay,” she says, “In our view, this conduct should be declared an undesirable business practice in terms of section 63 of the PPA.”
Industry perspective: Why some agents charge these fees
Jan-Otto van Eck of Chas Everitt International, who manages a rental portfolio across the City Bowl, Atlantic Seaboard and northern suburbs of Cape Town, says there may be confusion about the different types of fees being charged.
According to him, some agencies require an upfront fee to pre-qualify prospective tenants before allowing them to view a property. These fees may be non-refundable if the applicant is not approved.
One client of his was asked to pay a R1000 non-refundable application fee to view a property being rented on a first-come, first-served basis.
The client felt the fee resembled a money-making scheme.
“Given the shortage of long-term rental properties in Cape Town and the large number of responses to well-priced listings, prospective tenants could be asked to pay such fees several times with different agencies if this practice becomes widespread,” he says.
A second type of fee may apply after a viewing, when tenants submit an application. These fees can cover the cost of credit checks, screening and other administrative processes.
“This can be a much fairer procedure,” says van Eck, particularly if the tenant is added to a vetted waiting list and offered priority access to suitable future listings.
However, he acknowledges the risk that agencies could charge such fees even when applicants have little realistic chance of securing the property.
Van Eck adds that rising operational costs may be driving the trend. Rental agencies face rising costs from property portals, credit bureaux, payment platforms, and proptech systems used to screen tenants.
Given the shortage of rental stock, some agencies may be seeking additional revenue streams. “The risk remains that agencies may be tempted to use viewing fees to recover costs unrelated to the screening process or to increase profitability regardless of the impact on the consumer.”
Is the short-term revenue worth the long-term risk?
While current legislation does not explicitly prohibit rental viewing fees, the ethical implications are difficult to ignore.
Agents who impose such fees could face scrutiny under both consumer protection principles and professional conduct rules.
The question facing the industry is whether the potential short-term revenue is worth the longer-term reputational and regulatory risk.
