Caution urged when paying a rental security deposit

THERE is a critical shortage of ownership and rental housing despite the government’s relentless efforts to tackle the backlog. The government, in fact, sold much of its rental stock over the past two decades, whittling away the existing inadequate rental stock.

Given that rentals are determined by market forces, housing and consequently tenants are mere commodities. Prospective tenants are usually desperate since rental stock is market related. In other words, supply and demand determines who is able to pay the price (rental) on a take-it-or-leave it basis.

Insufficient supply means higher rentals because of the demand by prospective tenants. They are often forced by market forces and their own distressed circumstances to agree to harsh lease conditions and unexpected developments.

A prospective tenant must guard against making an emotional or rash decision, like paying the security deposit several months in advance to secure a dwelling. The offer to rent can be appealing if the landlord proposes that after payment of the security deposit and the first month’s rental in advance, the tenant does not have to pay for six months. During this rentfree period the tenant must carry out repairs at his or her own cost.

What does the tenant do if the landlord later changes his or her mind or is unable to refund the money? What if the landlord is not the owner of the dwelling and cannot be found?

It does not matter if the landlord hands over the keys to the dwelling, because the locks can be changed by fraudsters. The legal costs would prevent most prospective tenants from pursuing the monetary claim and suing for breach of contract.

Then there is the matter of finding out about the problems that were not obvious when the dwelling was viewed. The lease states that the tenant cannot deduct from the rental or set off against it any amount for repairs.

Our law allows a tenant on an oral lease, or in the absence of a written clause prohibiting deductions, to deduct the cost of repairs from the month’s rental; or if the amount exceeds the month’s rental, then to set off the cost of repairs against the rentals.

The deduction is conditional upon the tenant placing the landlord on 14 days written notice to attend to the repairs, failing which, the tenant can deduct the cost incurred.

In Lester Investments (Pty) Ltd v

Narshi 1951 (2) SA 464 (C) at 468, acting judge Van Winsen held that the courts recognised the right of the tenant under certain conditions to deduct the amount spent on repairs from the rent.

“These conditions are that the work done must be in the nature of repairs properly so-called, that there must have been prior demand and notice to the landlord, and the latter must have failed or refused to effect the repairs himself. See Poynton v Cran, 1910 AD 205 at p 227.”

In the Poynton case, the tenant signed a lease that stated that he would not be able to deduct from the rent at all, and that he would be responsible for the internal and external repairs and maintenance of the premises (a hotel).

In spite of these conditions in the lease, the landlady was under duty to ensure the property was repaired at the outset of the lease, and handed over in a tenantable condition. The tenant did not accept the premises with the defects; if he had, then he would have had no claim because this would have been a waiver.

Lord De Villiers, CJ, said that he did not think that the clause in the lease providing for the payment of rent on a certain day “without any deduction whatever” had that result. “That provision cannot relieve the landlady of her obligation to place the leased property in repair, or deprive the tenant of the remedy which the law gives him in respect of her initial default.”

It is important to get legal advice before carrying out repairs and to be cautious about paying the security deposit and rental in advance when not intending to take immediate occupation.

• Tenants in need of advice can contact the office on 031 304 6451 or Whatsapp Pretty Gumede on 071 346 5595 or pretty@ocr.org.za, Loshni Moodley on loshni@ocr.org.za or Whatsapp 071 444 5671.

Dr Sayed Iqbal Mohamed is the chairperson, Organisation of Civic Rights.