Unpacking the nitty-gritty of tenant deposits

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BUSINESS NEWS - One of the most contentious stages of a lease period is when the lease is terminated, and discussions around the return of the deposit begin.

Paul Stevens, CEO of Just Property, offers insight into how the process is regulated, and what tenants and landlords can do to avoid disappointment, stress and anger.

The Rental Housing Act governs how deposits and interest earned are handled.

The Act states that landlords may require tenants to pay a deposit before moving into a dwelling and that such a deposit may not be greater than the deposit amount agreed between the landlord and the tenant.

In other words, this amount is a point of negotiation and agreement; it may be led by market norms, the landlord’s appetite for risk, the type of property, the tenant’s credit history and other factors.

The Rental Housing Act also dictates that deposits

Must be invested by the landlord in an interest-bearing account with a financial institution. Best practice is to hold the deposit in a dedicated Trust account, independent of the business/ landlord’s operating account
That “the interest rate applicable to such account may not be less than the rate applicable to a savings account with that financial institution” and

Tenants can request written proof of how much interest was earned on the deposit while it was in the account, and the landlord needs to show the tenant proof if requested.

The process and timelines for paying back deposits is addressed in the Rental Housing Act too. It states that deposits must be “repaid to the tenant together with any interest accrued to such account on the expiration of the lease. This can be achieved within 7 days of the end of the lease if certain conditions are met.

THE JOYS OF SMALL LIVING SPACES
Are you thinking about down-scaling and moving to a smaller home? Just Property has some helpful tips.

“Small living spaces are great as they offer more affordability,” says Graham Ross of Just Property Blouberg. “You save on utilities and home maintenance. And it will be easier to make the capital investments that will save you even more in the long run, like a solar system. Going small will allow you to buy in a better area. And if you are downscaling, you’ll have more for little luxuries like travelling, and to put towards other investments.”

Ana Roberts of Just Property Upper Highway agrees. “Another great benefit is that small spaces require less furniture - a few great statement pieces allow for simple, minimalist decor and a beautiful, welcoming home at a fraction of the cost of furnishing a big house. And the cleaning is a breeze!”

Less clutter equals less stress, and isn’t that what we are all looking for now?

Ana and Graham’s tips for cosy-home hunting

Location, location, location. You want to remain close to your family and friends, and have ease of access to stores and other amenities such as doctors, hospitals etc. Narrow your search to areas that tick these boxes...

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