Choose your property rental agent carefully

Choose your property rental agent carefully

Private Property South Africa
Michael Bauer

When choosing a letting­ agent to manage a property that is rented out, it is very important to check their credentials carefully to ensure proper management of the asset and funds, says Michael Bauer, managing director of IHPC.

The agent, while working in the landlord’s interest to get the maximum return from the property, should also assist in keeping the property properly maintained and the investment safe, he said.

Landlords should ask if the prospective agent has a Fidelity Fund Certificate, which is stipulated by South African law, to be able to work legally as an agent. Many who buy and sell homes would consider asking their agent if they have this certificate but it sometimes gets “missed” when choosing a rental agent. This is important as it protects the landlord in a case of negligence or fraud – the landlord then has recourse to claim any damages from the Fidelity Fund.


There are two types of mandates for rental agents, said Bauer, introduction or management contracts. In many cases the landlord would opt just for the introduction which includes a lease being signed with the tenant and the landlord is then left to collect the rental every month, manage the property and check on his tenant from time to time. The better option is a management contract, where the rental agent will collect the monthly rent, make the relevant payments on behalf of the landlord (such as rates and water) and arrange maintenance if it is needed. Some agents will also conduct an inspection of the property from time to time.

“The landlord and rental agent must agree beforehand which the best option is and what the landlord expects of the agent,” said Bauer.

Deposits and checks

It is sometimes asked who should hold the deposit put down by the tenant, and the answer is that either the landlord or the agent can hold the deposit, provided it is kept in an interest-bearing account and that the balance is kept track of, said Bauer. If the owner keeps the deposit the temptation is always there to use it in the meantime, which creates a problem for him when the time comes to refund the deposit. Likewise, when the agent holds the deposit, the landlord should check whether this money goes into an account which is monitored closely, he said.

Credit checks before signing a lease are very important as this gives the landlord an idea of whether the prospective tenant pays his accounts well and is a steady income earner, said Bauer. “This service must be offered by the rental agent as you need to have peace of mind that the rent will be paid on time every month.”

Communication is key

The last but not least important thing to expect from a rental agent is a clear line of communication, says Bauer.

“The agent should let you know upfront how he will communicate with you and what his preference is when it comes to the tenant needing to communicate with him or you. Often the tenant might find there is something broken in the unit but will end up reporting it to the wrong person, which could cause delays in passing the message on to the relevant person,” said Bauer.

Make a statement

The rental agent should send the landlord monthly statements of account and if he does not have all the facts and figures to hand when it is needed, the landlord should be questioning what is happening with the finances, he warned.

“As an investor in a property, it is your right to ensure the proper management of it, and the rental agent, who is earning a fee, should have all the necessary credentials to keep this asset as viable and profitable as possible,” said Bauer.

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