If the comments on this week’s Private Property article regarding how the Consumer Protection Act affects landlords and tenants are anything to go by, there are far bigger fish to fry than the early cancellation of a lease.
Landlords have long bemoaned the fact that tenants seem to have more rights, while some tenants believe that the landlord sees them as some sort of cash cow and that the property owners are only in it for the money – eager to receive the monthly rental payments, but not as willing to spend money maintaining the property to a liveable standard.
If truth be told, both parties would be right to some degree. It does seem that tenants often have the upper hand and there are those who ‘work' the system to full advantage. On the other hand, there are landlords who appear hell bent on abusing tenants’ rights by, for example, refusing to return deposits and failing to maintain the property to a satisfactory standard.
Letting agents don't get off scot-free either, and are also often regarded as only being in the business to make a quick buck. Of course, letting agents themselves will tell you that the job entails an enormous amount of stress and is not for the faint hearted. They have to deal with difficult landlords, who expect the world, and defaulting tenants, who always seem to put in an appearance, regardless of how many credit and other checks are put in place.
One reader was pretty outspoken about the CPA and other legislation which, in his view, protects tenants. He commented, "The property market for investment has become a "no-no" in South Africa. All the rules and regulations are made just for the protection of tenants and (there is) no protection for owners. With this new rule, it will pay an owner to rather not sign a lease but to rent his/her property out on a month-to-month basis to keep it fair to everybody. What is the worth of an owner signing a lease if the tenant can cancel at any time?"
Has South Africa gone overboard in its determination to defend the rights of tenants or are we simply coming to terms with what needed to be corrected? Some may argue that far too many people - including tenants - have a false sense of entitlement. In many cases, landlords who demand promises that the property be well maintained and that the rent will be paid on time are deemed unreasonable by tenants who, in turn, believe that the owner is infringing on their rights. These types of tenants also tend to regard a rental deposit as a form of savings account, which they feel entitled to have refunded in full, regardless of the condition in which they leave a property.
Then there are municipal services. Someone, in some municipality somewhere, decided that it would be far easier to recover bad debt from the property owner instead of dealing with dodgy tenants who do not pay their accounts. An increasing number of municipalities are refusing to conclude contracts for services with tenants, but will only do so with the owner. This effectively means that the owner is liable for the services and has to recover the money from the tenant.
This initiative is being adopted by a growing number of municipalities across the country, and why not? Let's face facts; it is a pretty effective insurance policy. The landlord has to pay up as he will obviously not be able to lease out the premises until all outstanding accounts have been paid and services have been restored. But is this policy fair and, more importantly, could regulations as mentioned above and those contained in the CPA be deterring people who are considering entering the buy-to-let market?
There are of course many happy tenant/landlord relationships, but sadly, these seldom if ever make the news or become the subject of dinner table conversation.
Intervention by lawmakers, whether in the form of the CPA or not, often tips the scales in favour of owners or tenants, thus upsetting the natural legal order that comes into being over a period of time. We know what the CPA says, but its clauses will have to be tested in court by the most artful landlords and tenants and their respective legal council. Until that happens, it cannot be said with certainty that the balance is tipped in anyone's favour.