fear and loathing
04 June 2008

Question:
I am thinking of returning to the UK and renting out my house in South Africa either furnished or unfurnished. I am worried by what appears to be the legal support of a tenant over a landlord in cases of proposed eviction for non-payment of rent. Your views would be appreciated.

Answer:
Your concerns are justified. In my experience a tenant appears to have all the rights. If they do not pay the onus is on you to seek legal recourse and it can take from eight months to a year to resolve a dispute.  Added to the stress of receiving no rental income is the high cost of an eviction order. You can bank on at least R50 000 of legal fees if they dig their heels in.

The best way to protect yourself is to get a high quality tenant. Check their employment, check previous references and do not compromise on the deposit. If they balk on the deposit and try to negotiate a better deal look for someone else. You can ask for two months deposit and the first month’s rental up front if the property is furnished. Ask them why they are renting. Do they plan to buy one day? The more you know about them the better.

Get them to sign a debit order for the first day of every month. This gives you a lot more control and if they run into difficulty it will be easier for them to default on another bill. Act immediately if they skip a payment or the debit order is unpaid. Ask them when they expect to get the money. If they fall into arrears by one month the chances are they will continue to be in arrears and at the end of the lease you will have no option but to keep the deposit.
Serve them notice and start looking for another tenant immediately if they fall behind by a full month. If you keep cutting a non paying tenant slack they will usually take advantage of the situation.

Trust your instincts. It’s not a bad idea to go and visit them in their current home arrange to meet them there to sign a lease. A glimpse of how they are living now will give you some insights. You could also use the services of a rental agent who will manage the process for you. However, of late I have become very disenchanted with rental agents as they are generally out to make a fast buck and are not really interested in finding a quality tenant.

A recent case that was brought to my attention underscores this. An agent with a very reputable company marketed a client's property without the use of garages and appropriated them for herself as she lived in the same complex as her client. This meant that the client got way below market price for the rental and a non-paying tenant to add to the insult. As far as I know there is now a court case pending.

So, don’t assume that a rental agent is going to serve your best interests. If you go this route deal with the most senior person in the company and get everything in writing.

I know I sound negative, but there are good tenants out there. You just have to be picky and stick to your guns. Give yourself enough time to find the right one.

Iona Minton, http://personalfinance.iafrica.com