The Rental Housing Tribunal prohibits the rejection of tenants based on certain factors.
At the heart of being a landlord is the drive to secure a quality tenant who takes care of your property and pays the rent. Realistically, these quality tenants come in all shapes and sizes. When it comes to mapping tenants, according to Stats SA, 76% are black, 8% are coloured, 3% are Indian and 13% are white. TPN Credit Bureau’s data also shows that 15% of tenants currently renting in South Africa are foreign nationals.
Given that there is an oversupply of tenants hunting for accommodation, landlords should be in the pound seat right now. In reality, however, quality tenants are scarce and finding one can often be as difficult as finding a needle in a haystack. It therefore stands to reason that any form of discrimination on the part of a landlord will only make the search that much harder.
Unfortunately, the reality is that there are still limited instances of discrimination by landlords against tenants. Fortunately, the Rental Housing Act prohibits the rejection of tenants on the basis of race, religion, nationality or sexual orientation. All estate agents and landlords (whether they have big rental portfolios or rent out only a single property) are obliged to comply with the provisions of the Rental Housing Act and any tenant who has been subjected to discrimination of any kind should lodge a complaint with the Rental Housing Tribunal.
Michelle Dickens, managing director of TPN Credit Bureau comments that, “age and gender play no role in determining the payment behaviour of the tenant. Higher risk indicators include self-employed tenants and tenants who refuse to provide any verifying documentation. Student accommodation also is riskier where the student alone signs the lease agreement, but TPN’s data shows that when a parent co-signs a lease agreement this significantly increases the timeous and full collection of rent.”
TPN’s data also shows that foreign tenants may be slightly more risky, but they should not be excluded purely because they are not South African citizens. One of TPN’s largest clients has a rental portfolio of over 4,500 tenants, of which 35% are foreign tenants. Currently, over 98% of this client’s tenants pay their rent on time, proving that if they check all of the correct boxes, foreign tenants may be just the quality tenant that the landlord is looking for.
What can a landlord take into account when approving or rejecting a potential tenant?
- FICA requirements – an estate agent must, by law, obtain the potential tenant’s ID or passport documents, proof of address and proof of the income tax number of the potential tenant;
- Immigration Act requirements - current documentation proving that the tenant is legally allowed to be in South Africa;
- Credit profile history, bearing in mind that consent must be obtained before this information is accessed;
- Verification of bank account information; and
- Affordability assessment, by means of payslips and bank statements.
When a landlord or estate agent insists on the above information and documentation, tenants should not feel that their rights are being compromised in any way. Rather, they should understand that the landlord or estate agent is being diligent in ensuring that the tenant will actually be able to fulfil their obligations in terms of the lease. Making sure that everything is in order in the beginning will ultimately prevent problems arising down the line for both parties.
What things should the landlord not take into account when approving or rejecting a potential tenant?
- Sexual Orientation;
- Marital Status;
- Medical history; and
- Political beliefs.
Rejecting a potential tenant based on the above criteria will amount to discrimination. This is clearly reflected in all current legislation in South Africa relating to rentals, including the Rental Housing Act and the National Credit Act.
Dickens sums it up succinctly, “unfortunately, there is still some discrimination in the rental industry when it comes to race, religion, nationality, sexual orientation and other factors that should never come into play when considering a potential tenant . What is apparent though is that the majority of landlords and estate agents are moving in the right direction and realising that the rejection of potential tenants must be based on objective criteria and not on subjective bias.”