The New Rental Housing Amendment Act

Changes to the rental housing environment have been proposed with the Rental Housing Amendment Act. Although at first glance, the proposed changes may not seem overly dramatic in nature, a closer study does reveal implications both for landlords and tenants. Any person that contravenes the Act can be held liable and face criminal charges, but landlords specifically are a focus of the proposed legislation.

To start with, tenants may now ask for written receipts for all payments made, which include dates, a description of the property to which they relate and details of the purpose for which payments were made eg. rental payments, arrears, deposits etc, as well as for which period the payments were made. This can help a tenant with proper recordkeeping of payments made and serve as proof against allegations of non-payment.

The landlord can also not unreasonably withhold consent for the subletting of the property. What is meant with “unreasonable” will have to be established by the Provincial Rental Housing Tribunal (“Tribunal”) or a court of law.

Landlords must also invest the deposits they receive from tenants in an interest bearing account at any financial institution, for which interest accrued may not be less than from a savings account. The tenant may also request the landlord during the period of the lease to provide him with written proof of the interest accrued on the deposit and the landlord must provide such proof. Granted, the investing of the deposit received from the tenant is not a new regulation – but the legislator intends making it tougher not to comply with as the landlord can face up to two years in jail or a fine if contravened.

In addition the responsibility now falls to the landlord to arrange for a joint inspection with the tenant at the termination of the lease on a date and time that suits both parties. Importantly, this is not a joint responsibility but a responsibility of the landlord. If not done by the landlord it is assumed that the property was returned in good order and the landlord cannot withhold the deposit for repairs or maintenance.

Furthermore tenants must be provided with fit and suitable accommodation to live in. If a tenant’s health or safety is compromised, the landlord can be held liable. How onerous this right will be in reality only time will tell, and would in our view have to incorporate some measurement of reasonableness in any evaluation.

An interesting inclusion is the requirement that all lease agreements must now be in writing, and that the Minister of Human Settlements will create a standard lease agreement to be used in all official eleven languages. Making written lease agreements compulsory will make the evidence of lease terms easier and help protect tenants against unscrupulous landlords, and landlords in turn against tenants that refuse to pay rent claiming no agreement exists. That said, formalising a written contract for something as basic as a R500 rental for a few months could be excessive. Other questions arise, such as what happens if the lease is not in writing – is it void from the beginning or voidable? Can parties sign different language versions of the rental agreement, and what will happen if there is a discrepancy in interpretation? These scenarios will have to be addressed to avoid more rather than less confusion.

Despite certain question marks regarding the practicalities of the proposed amendments, the intent of the legislature is positive in seeking to reduce uncertainty and abuse in the rental environment. Once implemented landlords in particular, given the criminalisation of transgressions, will need to review their current rental processes and agreements and ensure compliance with the new amendments.

November 21, 2014

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