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SA Property Investor : 2008/11/11
The pitfalls of tenant living are numerous, tenuous relationships with landlords and co-lease agreements gone bad often leads tenants down the path of being blacklisted, a very difficult one to get off.
For many South Africans the rising cost of living has left renting as the only option open to them. Often those seeking property to rent are forced to consider co-lease agreements to save money or to have a higher standard of living.
Siphokazi Ngxatu was recently blacklisted because of a co-lease agreement gone bad. "I had co-signed a lease with a childhood friend. There was trust in our relationship and I thought she was a responsible adult like myself. However I did not take care to read the fine print and because of three months rent she lapsed without my knowledge, I was blacklisted along with her. We were kicked out and I had to get legal representation to revoke my black listed status of 'non payment'. I also never received my deposit back which meant I had to take out a bank loan to finance my move to a new home.
Follow up:
"This whole experience has cost me my credit reputation, friendship and heavy expenses in my efforts to reinstate my credit status.
"My experience has taught me that I need to have a transparent relationship with my landlord and agent. Had I had done this I would have known about my friend's lapse in payment and would have more clearly understood the situation and avoided the repercussions her actions had on my credit profile," says Ngxatu.
Michelle Dickens, Managing Director of TPN comments: "Common law states that tenants have to meet the following obligations: To pay the rent in the right amount at the agreed place and time, to take care of the property and not use it for purposes outside of the agreement and on termination of the lease to ensure the property is in the same order and condition it was when it was received, but reasonable fair wear and tear accepted."
"As a registered credit bureau monitored by the National Credit Act and Credit Regulator, one of TPN's key objectives is to maintain the accuracy of the tenants' credit profile. Our business sees many disputes between co-renters and landlords. Often landlords are quick to draw a hard line with tenants and tenants fight back often using tactics that are damaging to their credit profile."
Most lease agreements state that rent plus additional costs such as electricity and water are payable by the tenant on, or before, the first of the month. This agreement by both tenant and landlord makes non-payment of the full amount by the first of the month a breach of contract. There is no common law right which provides for payment of rent up until the seventh of the month.
Another bone of contention is that if the tenant is dissatisfied with the condition of the property they will withhold rent to force the landlord to make certain repairs. Also tenants worry that they will not be paid their deposit and won't pay the last month's rental payment which is a mistake.
Dickens says, "This type of behaviour is damaging to tenants because many do not realise these tactics reflect negatively on their personal credit profile and could lead to a blacklisting. At the end of the day this makes applying for assisted finance (bonds, bank loans, vehicle finance) very difficult in the future."
By common law the landlord's responsibility is to make sure that the property is in a condition reasonably fit for living. This does not mean that missing internal door keys make for unfit living conditions, (unless specifically mentioned to be provided in the lease agreement). However if the bathroom is uninhabitable this prevents the property from being fit for the purposes for which it was let.
"The right way to handle maintenance issues is for the tenant to inform the landlord of the defect. If the problem is not repaired the tenant can claim breach of contract and demand repair within the required number of days specified in the lease agreement. If the landlord still does not comply the tenant can cancel the agreement and vacate the property without a damages claim against them. Withholding the rent will result in a secondary breach of contract by the tenant with possible negative credit profile repercussions," she adds.
"The Rental Housing Act provides for circumstances around refunding the tenant's deposit. Tenants need to understand the deposit is held by the landlord in case of damages or for any other liable amounts. The tenant and the landlord should jointly inspect the property within 3 days of the expiry of the lease. If there are no damages or arrears the landlord should pay the deposit back to the tenant within 7 days of expiry of the lease."