A reader has approached the Property Poser experts with a few problems, including the manner in which her landlord has dealt with her deposit.
The tenant writes that she has been renting a residential property for the past two years. In terms of her original lease agreement, she had to pay a deposit of R3 700 along with a key deposit of R200 and would not receive interest upon refund of the deposit.
At some stage the original landlord merged into another company, which simultaneously increased the monthly rental due. The reader states that when she did not agree to this increase, she received a letter of demand for the outstanding amount.
The new landlord also insisted that she sign a new lease agreement, which she never did. When she requested a statement of account of how her deposit had been invested, the lessee was told that no interest had accrued, since it was not agreed upon in the original lease agreement.
Having had enough, the reader has given the landlord two months’ notice to terminate the lease.
The company has indicated that she will be refunded her deposit only, less the amount claimed in the letter of demand. The reader has also been denied her key deposit and told to approach the previous landlord regarding a refund of this and any interest earned.
According to Grant Berndt from Abdo & Abdo Attorneys in East London, the Rental Housing Act states that “the landlord may require a tenant, before moving into the dwelling, to pay a deposit which, at the time, may not exceed an amount equivalent to an amount specified in the agreement or otherwise agreed to between the parties”.
As far as interest on the deposit is concerned, Berndt says the Act determines that the landlord must invest the deposit in an interest-bearing account with a financial institution.
“The landlord must pay the tenant interest at a rate that may not be less than the rate applicable to a savings account with a bank.”
In this regard, the provisions of the Act will override the contract, as the former stipulates that the provision may not be waived by the landlord or tenant, says Berndt.
“Furthermore, the Act states that when the lease expires, the landlord may apply the deposit and interest towards the payment of all amounts for which the tenant is liable.”
Berndt says this includes the reasonable cost of repairing damage to the dwelling and the cost of replacing lost keys.
The landlord must then refund the balance of the deposit and interest, if any, to the tenant not later than 14 days after restoration of the dwelling to the landlord, says Brian Kinnear, principal of Fresh Lifestyle Properties in East London.
“If the reader disputes the landlord’s demand for the increased rental on the basis that it was not imposed by following the correct procedure, then the remedy provided for in the Act is for the lessee to approach the Rental Housing Tribunal.”
Kinnear says it is intriguing to consider whether the remedy for the interest lies against the original landlord, whose company may no longer exist, or the current one.
“The new landlord appears to have stepped into the shoes of the old landlord.”
If this is the case, Kinnear says the current landlord not only has the benefits of this arrangement, such as receiving the rental, but also the negative implications thereof.
“This would include being held responsible for the actions of the previous landlord.”
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