Monday, January 10, 2011

Refunding the tenant's deposit

2 of my partners, having enjoyed separate holidays in Cape Town, had the unfortunate experience of not having their deposit returned by their rental agent. I wonder how many other holiday makers endured a similar experience.

A holiday let is no different to any residential lease agreement, as regulated by the Rental Housing Act. A quick reminder of the rules of the game:

1. The landlord and tenant must perform a joint incoming inspection

2. The landlord and tenant must perform a joint outgoing inspection

3. Failure by the landlord to perform both the incoming and outgoing inspection is deemed to be an acknowledgement by the landlord that the property is in good and proper repair

4. If there are no damages, the deposit must be refunded within 7 days

5. If there are damages, the deposit must be refunded within 14 days of restoration of the property

6.Should the tenant fail to meet the landlord at the outgoing inspection – the deposit must be refunded within 21 days of expiry of the lease

Note:

The landlord cannot contract out of the above obligations. In other words, he cannot rely on his lease agreement to provide that “it is the tenant’s responsibility to complete and submit a defects list” and therefore not perform the joint incoming inspection. Nor can the landlord contract in the lease agreement that the deposit will only be refunded in 30 days.

If the landlord engages the services of a rental agent – then the rental agent must fulfil the landlord’s obligation in the points above.

When determining the damages caused by the tenant, the landlord compares the incoming and outgoing inspection and obtains quotes for the reasonable cost of making the repairs. The deposit is not the landlord’s bonus coffers to upgrade or perform maintenance he is responsible for. Further, the landlord may only deduct repairs from the deposit once the repairs have been performed and an invoice supplied. The tenant has the right to copies of all the invoices for the repairs performed.

Thankfully tenants and landlords have access to the Rental Housing Tribunal to mediate and adjudicate any disputes which may arise.

I encourage landlords and their rental agents to learn the rules and then play by the rules.

4 comments:

  1. Hi Michelle
    I moved out after my lease expired and the landlord refused to pay back my deposit. There was no ingoing inspection and only a verbal outgoing inspection. I went to the Rental Housing Tribunal and thought they would help me but after the landlord lied through his teeth about how we wrecked the flat, they decided in his favour and I was left without my deposit. He claimed he had to replace all tiles and all carpets and repaint the whole place with my money but I never got any proof that it was actually done. I really feel done in by him and the tribunal because I tried my best to keep the flat clean and not to break anything. Do I still have a case?

    ReplyDelete
  2. Thank you, thats very interesting information. I need to share with my friends.
    Eviction Defense

    ReplyDelete
  3. Thank you Michelle, just came across your blog, this is very interesting and informative.

    ReplyDelete
  4. Hi Michelle,

    Is it correct that the Landlord is supposed to keep the tenants deposit in an interest earning account, so when the deposit is eventually repaid, the amount has not depreciated.

    ReplyDelete