South African ten­ants main­tain dis­ci­pline

Weekend Argus (Saturday Edition) - - PROPERTY -

THE PAY­MENT be­hav­iour of res­i­den­tial ten­ants in the third quar­ter of 2010 is rel­a­tively un­changed com­pared to the sec­ond quar­ter, which is pos­si­bly a sign that em­bat­tled con­sumers have set­tled down to the dis­ci­pline of kee ping house­hold ex­penses un­der con­trol.

Ac­cord­ing to the lat­est TPN rental pay­ment pro­file ten­ants in the paid on time cat­e­gory in­creased marginally for the sec­ond con­sec­u­tive quar­ter to 68 per­cent, but those who paid late de­clined to 13 per­cent. The com­bi­na­tion of paid on time and paid late cat­e­gories are viewed to­gether as ten­ants in good stand­ing, which has de­clined slightly from 82 per­cent for the sec­ond quar­ter, to 81 per­cent dur­ing the third quar­ter.

The group of ten­ants who made par­tial pay­ments to­ward their rents rose from eight per­cent to nine per­cent, in­di­cat­ing in­creases in addi- tional charges such as the higher cost of elec­tric­ity are plac­ing strain on ten­ants, which in many cases trans­lates to the non-pay­ment of util­i­ties.

Ten­ants in the did not pay cat­e­gory re­mained un­changed at 10 per­cent, says Michelle Dick­ens, man­ag­ing di­rec­tor of TPN.

“Anal­y­sis con­tin­ues to sug­gest that in most house­holds the un­der­ly­ing rea­son for non-pay­ment re­mains a mat­ter of in­suf­fi­cient funds, usu­ally due to loss of in­come or very tight bud­gets that have made no pro­vi­sion for sav­ings to cope with ex­tra­or­di­nary ex­penses.”

Com­par­a­tively good pay­ment per­for­mance by ten­ants in the cat­e­gories from R3 000 to R7 000 and R7 000 to R12 000 con­tin­ues to show slight im­prove­ment. Un­for­tu­nately, those in the brack­ets be­low R3 000 and above R12 000 re­main weak. Most sig­nif­i­cant, only 55 per­cent of the ten­ants in the R12 000 plus rent group are in the paid on time cat­e­gory, with 23 per­cent paid late.

This late pay­ment trend places an ad­di­tional bur­den on prop­erty in­vestors who still need to meet monthly mort­gage bond com­mit­ments.

The Western Cape and East­ern Cape con­tinue to out­shine KwaZu­luNatal and Gaut­eng. Most sig­nif­i­cant for KZN is the num­ber of ten­ants in the “did not pay” cat­e­gory at 16 per­cent – which is 60 per­cent above the na­tional av­er­age. Seen in per­spec­tive, ten­ants in the did not pay group for the Western Cape are at six per­cent, East­ern Cape seven per­cent and Gaut­eng 12 per­cent re­spec­tively.

“Many delin­quent ten­ants are choos­ing to rent di­rectly through land­lords, many of whom are not land­lords by choice. A large num­ber are un­able to sell their prop­erty, so they choose to rent them out as a sec­ond source of in­come. Un­for­tu­nately these un­sus­pect­ing land­lords don’t have the tools (such as TPN in­quiries) to as­sist them in iden­ti­fy­ing qual­ity ten­ants,” says Dick­ens.

The re­port found non-main­te­nance of prop­er­ties is lead­ing to more ten­ant dis­putes. This gives ten­ants ex­cuses for non-pay­ment of rent – in some cases be­cause of ma­te­rial non-main­te­nance. In most cases ten­ants are look­ing for any ex­cuse not to pay. Main­te­nance is­sues need to be dealt with swiftly to avoid giv­ing ten­ants any open­ing to withhold rent.

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