Written for Property Poser

A reader who has made use of a letting agent to administer the renting out of his property has approached our Property Poser panel.

One of his issues deals with the repayment of the full deposit by the agent notwithstanding the fact that municipal accounts were in arrears and that there was damage to the property.

Jacques Ehlers from Du Toit Strömbeck Attorneys in Port Elizabeth says the reader does not specify the terms and conditions of his contract with the agent and therefore one has to assume that, as per usual, the agent acted on his behalf in all respects.

In terms of the deposit, Ehlers says the Rental Housing Act of 1999 provides that a landlord and tenant must arrange for a joint inspection of the property within a period of three days prior to the expiration of a leasing period. “This is to ascertain whether any damage has occurred while the tenant occupied the property.”

According to Ehlers, the landlord may then apply such portion of the deposit held for all amounts which the tenant is liable for in terms of the lease agreement, including repairs and the cost of replacing keys, but must repay the balance plus interest within 14 days after being placed in possession of the property again. “This period is reduced to seven days should there be no need for repairs or deductions from the deposit.”

If the tenant ignores a request by the landlord for an inspection, the latter must inspect the property within seven days after the contract has expired and refund the deposit and interest minus valid deductions within 21 days of it lapsing, says Ehlers.

Charlotte Vermaak from Chas Everitt in PE says the parties may agree to a different time period in the lease agreement, which was the case with the reader. “The parties agreed that the deposit must be repaid within 30 days of the tenant vacating the property.”

Vermaak says the contractual relationship between the reader and the agent is of importance. “In acting on behalf of the landlord, the agent would’ve been bound to the provisions of the Rental Housing Act or the contract, as the case may be, and would’ve been obliged to repay the deposit within the required time.”

Vermaak says the landlord may have recourse against the agent should the latter have failed in his contractual obligation towards the landlord and if he suffered a loss accordingly. “According to the reader, the agent was aware of the arrear accounts that needed settling as well as the damage that needed repairing.”

If the agent then repays the deposit without setting off these amounts, the reader may look to the agent for compensation based on breach of his contractual duties as set out in the terms of their agreement, according to Vermaak.

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