Property investors in South Africa beware

Property investors who rent out their properties should beware of non-paying tenants, since evicting them is a longer and more complicated process than many may realise.

Tactics to get a non-paying tenant to leave, like changing the locks or cutting off their electricity supply, could also land landlords in hot water.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, explained that the tenant and the landlord must respect their rental agreement.

Goslett said that it is, first and foremost, crucial to abide by the contractual agreements as laid out in the rental agreement between the tenant.

If one of the parties fails to abide by the agreement, you can proceed with the required legal process. “It is only when people deviate from this that issues start to occur.”

Tenants are protected by two pieces of legislation. Firstly, the Prevention of Illegal Eviction from Unlawful Occupation of Land Act, No. 19 of 1998 (PIE Act) sets out the process for evicting tenants.

The second, the Rental Housing Act of 1999, makes it a criminal offence for a landlord to simply cut the supply of electricity or water, change the locks, confiscate tenants’ belongings, or stop a tenant from accessing the property.

“It is vital to always play by the rules,” Goslett said. Some landlords may think they can get a non-paying tenant out quicker if they change the locks or resort to other intimidation tactics.

“The truth is that this will most likely only provide the tenant with ammunition to use against you in the court proceedings. This will only drag things out further and cause more unnecessary complications and delays,” he said.

The odd late payment from a tenant might be forgivable, especially if it’s a bank or financial system-related problem. However, a landlord cannot be so lenient if their tenant gets into the habit of paying their rent late.

The legal process

“Because the monthly payment date forms part of the rental agreement, which must also comply with the Consumer Protection Act, when a tenant doesn’t pay on time, they are technically in breach of contract.”

“Legally, this means that a landlord should send the tenant a formal letter explaining that they have 20 business days to make the payment, and if they don’t pay their rent in that time, their lease will be cancelled.”

If the tenant fails to pay what is due by the stipulated timeframe, the landlord can legally terminate the lease and ask them to leave. If they refuse, the landlord can then take out a court order to evict the tenant for breach of contract.

“This process can take up to six months, during which your tenant can stay in your property and will probably still not pay rent.”

“Once the eviction is granted, the tenant is usually given at least another 14 days to find new accommodation before the eviction order is executed.”

Since the eviction process can be so lengthy, Goslett suggested taking steps as soon as possible to prevent too great a loss of income.

“The longer you take to act on a late or missed payment, the longer it will be before you can legally evict a tenant who continues to miss payments.”

To guard against this, he encouraged landlords to work through a professional rental agency that can thoroughly screen potential tenants and minimise the risk of late or missed payments.

“It can be tempting to go it alone in the mistaken belief that handling the property rental yourself will save you money. Also, when we’ve found the perfect tenant, it’s impossible to think that something might go wrong – until it does.”

“It is better to rather get expert help right from the very beginning than to try and navigate these challenges on your own.”

According to the Department of Human Settlements, a Rental Housing Tribunal has the authority to deal with disputes, complaints or problems between tenants and landlords in rental housing dwellings:

• Non-payment of rentals
• Failure to refund the deposit
• Invasion of tenant’s privacy, including family members and visitors
• Unlawful seizure of tenant’s goods
• Discrimination by landlord against prospective tenants
• The changing of locks
• Lack of maintenance and repairs
• Illegal evictions
• Illegal lockout or illegal disconnection of services
• Damage to property
• Demolition and conversion
• Forced entry
• House rules
• Intimidation
• Issuing of receipts
• Municipal services
• Nuisance
• Overcrowding and health matters

In terms of section 13(13) of the Rental Housing Act 50 of 1999, a ruling of the Tribunal is deemed to be an order of a Magistrate’s Court in terms of the Magistrate’s Court Act, 1994.