Bad Tenants can Cost you Money

Private Property South Africa
Lea Jacobs

Although in monetary terms leasing out property can be a profitable exercise, the situation can become precarious if you own a property in a sectional title scheme and your tenant does not play ball with other homeowners in the complex. Tenants may have rights, but so do body corporate members and if those leasing a unit do not abide by the sectional title management and conduct rules, the landlord could end up footing the bill.

Although these will differ from complex to complex, tenants have to abide by the rules, regardless of what they are. They are in place for a reason and the trustees who represent the owner’s interest set these rules in terms of what they deem acceptable and non-acceptable behaviour within the scheme. Some rules are not going to suit some people and for that reason, it is always a good idea to ensure that your tenant understands these rules before moving into the property.

If a complex is situated in an area with a large retired community for example, loud music may be taboo. In other complexes, unruly children who play on the common property may become an issue if the rules stipulate that children must be supervised. Working on and washing vehicles, parking on common property and bringing pets onto the property may also cause problems if proscribed by the regulations.

Very often it is the smaller things which cause the most aggravation and what may not appear to be important to some, can often impact heavily on others. Regardless of how petty certain rules may appear, they have to be obeyed, whether the person residing on the property is an owner or not. Unfortunately, if the rules are continually flouted by the tenant, penalties may be imposed.

"If, after a warning," says Ulrik Strandvik, a Gunstons Attorneys director, "the tenant continues to upset his neighbours, the body corporate may be entitled to impose a fine, and this can be onerous, often over R1 000. The snag here is that this fine is payable by the owner. What is more, the interest on the fine, if not paid, can be charged at compound rates - and the legal fees, if an attorney is hired, are also for the owner’s account."

Although it has always been vital for landlords to double-check their tenants’ credit credentials, this aspect highlights the need to speak to the owners of previous properties in which the tenant has resided to confirm that the person who wants to lease the property is of good standing. Using a letting agent may not always safeguard the owner against letting the property to an undesirable person.

"Rental agents will all too often not be as thorough in this process as they should because they are under pressure from the landlord and their seniors to fill the premises. We have known cases where a previous landlord testified that the tenant was reliable when this was not the case - he simply wanted to get rid of him. Had the agent checked with two or more previous landlords, he would have discovered this."

Strandvik says that an additional danger is that the rental agent may try to hide the facts from the landlord, in the hope that he can put matters right. However, experience has shown that the type of tenant who incurs these penalties is also the type who ignores debt claims and is constantly in financial hot water. It is probable, therefore, that the landlord and his attorneys will be unable to extract the cash from the tenant.

Protecting your asset and your pocket go hand in hand and anyone who is renting out a sectional title unit should form a close relationship with the body corporate trustees in order to keep tabs on their tenant’s behaviour. Very often, these situations can be nipped in the bud and if not, an erring tenant can be given notice to vacate.

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