Written for Property Poser

Another reader who is unhappy with his letting agent has approached the Property Poser experts for assistance.

The reader writes that he is not able to maintain direct control over a number of his rental properties and therefore makes use of the agent’s services.

He explains that he has a signed contract with the agent but does not elaborate on the type of remedies they have agreed upon therein.

The reader has several concerns regarding the manner in which the agent has conducted himself in his dealings with a number of tenants.

One of the instructions the landlord appears to have given the agent was to sign only year-to-year leases with his tenants as he is concerned that the deposit, lodged at the inception of the lease, does not grow at a rate equivalent to the annual rental increase.

It should be noted that, firstly, the deposit must be held in a bank account for the benefit of the tenant, says Schalk van der Merwe from Rawson Properties in Somerset West, Cape Town.

“The Rental Housing Act provides that this account should accrue interest at a rate no lower than that of a savings account.”

There is, accordingly, a measure of growth to a deposit that is held in this manner, says Van der Merwe.

“The purpose of the deposit is to provide the landlord with an amount from which to draw at the termination of the lease should it be necessary.”

Van der Merwe says the Act provides that the deposit, together with any accrued interest, may be applied to any amounts owed by the tenant to the landlord under the lease.

“The reader has also taken issue with the fact that, if the agent does something in his representative capacity which turns out to be incorrect or unlawful and the tenant challenges such an action, the landlord remains liable for those actions.”

The landlord feels that, at this stage of the relationship, cancellation becomes tricky, as the agent has already been paid a considerable fee – equal to one month’s rental – for having sourced and placed the tenants, says Van der Merwe.

According to Grant Hill of Miller Bosman Le Roux Attorneys in Somerset West, several aspects require some consideration in this regard.

“We haven’t seen the content of the contract between our reader and the agent but, if prepared by the agent, it may well be biased in his favour.”

Hill says it seems that the landlord is aware of his right to cancel the contract but is concerned that he will lose out financially as a result.

“The agent’s mandate and scope of authority should be considered. One should ask whether he has discretion, within the bounds of the law, to do such things as he may deem appropriate and necessary, or whether his terms are set out in more detail.”

If the agent has breached the contract, the reader could seek to reclaim certain monies as part of the damages he has suffered, says Hill.

“The Code of Conduct of the Estate Agency Affairs Board states that an agent is obliged to protect the interests of his client, with due regard to other persons concerned.”

Hill says the Board oversees the complaints made against agents and deals with the sanctioning of such agents, which may include a compensatory award.

“Instead of pursuing legal action in terms of the contract, our reader may wish to lodge a complaint against the agent concerned in terms of the Estate Agency Affairs Act.”

Under the Act, the Regulations Regarding Conduct Deserving of Action allow the landlord to lodge such a complaint on the basis of his feeling aggrieved by the actions, or omissions, of the agent, says Hill.

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