What to expect when renting out a property on an estate.

Private Property South Africa
Private Property Reporter

Michelle Dickens, Managing Director of TPN Credit Bureau, chats about what to expect when it comes to renting out a property on an estate.

Presenter: It's good to have you back with us on Win a Home on Afternoon Express exclusively on SABC3. Last week, I had a conversation about what it takes to go and buy a property to rent out and what are the pros and cons of that. And if you missed the episode, go and check it out on the Private Property website, www.privateproperty.co.za. And they've partnered with us at Win a Home on Afternoon Express to provide you with advice on the different aspects of property on estates. Now, after seeing some of the amazing estates on the show, I'm pretty sure that many of you would be interested in renting a property on an estate. So today, we are once again with Michelle Dickens, Managing Director of TPN Credit Bureau, back in the loft with us today to chat about what it takes to-- and what you should expect, rather, when it comes to renting out a property on an estate. Michelle, welcome back.

Michelle Dickens: Afternoon, Dan.

Presenter: So last week we spoke about what it takes to buy and then rent those out. Let's focus on the-- is the lessee?

Michelle Dickens: The tenant's side--

Presenter: The tenant's side of things. Because it's something that we're not really sure of what our rights and responsibilities are because the market is really slim, and you're always looking for places to go. We don't want to limit our opportunities.

Q: I mean, what are the rights and responsibilities then of a tenant who's looking to rent on an estate?

Michelle Dickens: So the tenant, obviously, wants from an estate perspective, the lifestyle, the security, the amenities, access to all the fun stuff that the estate has to offer but not having to pay the premium price that the buyer's going to pay. Also, the tenant's not going to be in for things like the levies. And as we know, estate levies can be quite pricey as well. So it's about having the fun of the estate without having all the additional costs associated.

Presenter: But do I, however, have the same rights and responsibilities as an owner on that estate has?

Q: Do I abide by the same rules? Can I use all the amenities like everyone else would?

Michelle Dickens: Absolutely. You have access to all the use of the estate. You're going to have your gate access control. You're going to have access to the facilities like the golf course, running tracks, the cycling tracks in some of them, the equestrian side. And you're going to have to abide by exactly the same rules. And in fact, most landlords would request that you sign those body corporate rules or homeowner's rules as part of your lease agreement. Quite important because if you don't abide by the rules, then they're going to be looking for you for the fines that are going to follow.

Presenter: Let's ask the hard questions because I think this is something that I'm fascinated by. I mean, if I choose to rent a property, I want to know what happens.

Q: What are the owner's rights over me? So if I choose not to pay my rent or perhaps I break one of the rules of the estate, what am I liable for?

Michelle Dickens: Tenant landlord disputes, such a fun topic. So tenants are liable to pay the rent in accordance with the lease agreements. Now, generally in an estate, a lease of this nature, you're going to have a written lease agreement that determines the amount of rent that's going to be paid and the date that it needs to be paid. And the tenant needs to ensure that he complies with that part of the lease agreement. The body corporate rules or homeowner association rules are going be part of the lease agreement. So he's going to know what he can and can't do. Speeding is an example. And if there's a fine attached to that rental statement on a monthly basis, he's going to need to pay that.

The landlord has a right to collect the rent in terms of the lease agreement. Now, if the tenant doesn't pay because, for example, he feels the property's not being maintained or he doesn't feel that he was speeding and therefore he's not going to pay the speeding fine, there are places that tenants and landlords go to mediate the dispute without just simply withholding rent in terms of, "I'm not paying my rent because it's not being maintained." Really, the right of the tenant is to go to somewhere like the rental housing tribunal and get the dispute mediated. In terms of the landlords for non-payments of rent, the rental housing tribunal is not the place we go. There we go to directly to the Maj or the High Court in terms of how do I ensure my tenant pays up?

Presenter: Okay.

Q: So I may not just remove amenities and cut off the water if the person's not paid for a couple of months?

Michelle Dickens: No. Some fun stuff that we've had High Court rulings are where landlords have denied access into the estate through the access control. That would be spoliation. No, you can't to that. It is a criminal offense to disconnect the utilities, the water, the lights, the electricity, lock out the tenant.

Presenter: okay so,

Q: You may not take the law into your own hands?

Michelle Dickens: Absolutely.

Presenter: So you're responsible to abide by the law but let the courts and the law take action and not yourself as a private individual?

Michelle Dickens: Correct.

Presenter: Fascinating. So it makes sense to rent on an estate if you're looking for the lifestyle, the amenities, to look after your safety, your family, if it's close to all the amenities you're looking for.

Q: And so, is renting itself always a good way to go if you cannot afford to buy at this stage?

Michelle Dickens: Well, it's not always if you cannot afford to buy. Some people look at renting to say, "Well, I can get into a rental accommodation, but I'm going to take the difference of what I would be paying for home ownership versus what I'm renting and put that into some sort of savings or investment where I can then at later date get into this home ownership in an estate that I desire."

Presenter: Lovely. So it is really good, but do all your research.

Michelle Dickens: Absolutely.

Presenter: Michelle, thank you, thank you, thank you for coming to join us.

Michelle Dickens: Thanks, Dan.

Presenter: All right. So there you guys have it. You could be enjoying the estate lifestyle as a renter, but should always be aware of the pros and the cons before signing any lease agreement.

So don't forget to enter the Win a Home competition on Private Property to stand a chance of winning a multi-million rand home on the Eye of Africa Estate. No need to rent.

It's your choice of one of the three being decorated by our design duos. All you have to do is log onto www.privateproperty.co.za and answer an easy question and vote for your favorite design duo. It's as simple as that.

Now, after the break on this show, the judges finally arrive to decide which of the master bedrooms tick all the right boxes. Don't go anywhere.

Click here to enter the Win a Home competition

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