Landlord refuses to repay your deposit-what now?

Our firm has been inundated with requests for help by tenants whose lease has come to an end and now their landlord either refuses to repay the deposit, or repays only a portion of the amount.

 

What are a tenant’s rights?

The Rental Housing Act regulates the relationship between landlords and tenants for residential leases. The requirements of the Act will overrule whatever the lease says, so let’s say your lease doesn’t require the landlord to pay interest on your deposit- the Act nevertheless says so, so interest is due to the tenant even though the lease says nothing (or even states that no interest will be payable).

The Act says you can’t waive (give up) any of your rights as a tenant- so any admissions / promises you may have made to the landlord, even if those are in writing, won’t detract from your legal rights.

Section 5(3) of the Act deals with deposits: it requires the landlord and tenant to jointly inspect the property before the lease starts, and that inspection must be recorded in a written inspection report (which may contain photos). This report records the state of the property as at the start of the lease.

 

Deposit:

The Rental Housing Act overrides the terms of any lease which are inconsistent with the requirements of the Act. It requires that at the end of the lease period, the landlord and tenant arrange a joint inspection of the property for the purposes of checking whether any damage was caused to the property during the lease period.

However, if the landlord doesn’t inspect the property in the presence of the tenant, the Act says that this is regarded as an acknowledgement by the landlord that the property is in a “good and proper state of repair, and the landlord will have no further claim against the tenant, who must then be refunded .. the full deposit plus interest by the landlord”. So, if your landlord didn’t conduct an outgoing inspection with you, the tenant can insist on getting his or her full deposit plus interest back.

 

Interest:

The Rental Housing Act requires every landlord to invest the tenant’s deposit in an interest-bearing account. Even if it wasn’t in fact done, the landlord is liable to the tenant for all the interest the deposit would have earned if it was properly invested in an interest-bearing account. If the landlord can’t provide you with a statement showing the accrued interest, you can work it out yourself- an interest rate of 4.5% per year is reasonable / average as at the time of writing this blog post. You can compound the interest for each year of your tenancy.

 

What if there was an outgoing inspection:

The Act makes it clear that the landlord is only entitled to deduct the “reasonable cost” of repairing damage caused during the lease period to the property, as well as the cost of replacing any lost keys. The relevant receipts which provide evidence of the landlord’s repair costs for those items must be made available to the tenant for inspection. If your landlord doesn’t provide you with receipts for the repairs / replacement of items, then he is not entitled to deduct that cost from the deposit.

The landlord cannot charge the tenant for maintenance e.g. when wear and tear causes the geyser to burst or a pipe to leak. If the tenant damages a fitting or furnishing which has a limited lifespan, the tenant isn’t liable for the full replacement value unless the times is brand new. So for example, if the tenant stains a carpet which then has to be replaced, but the carpet was already halfway through its lifespan, the landlord can only claim 50% of the reasonable replacement cost of the carpet from the tenant.

The landlord may also deduct any unpaid rental (e.g. if you stay after the lease ends). The last day of your tenancy is the day on which you removed the last of your possessions (including pets) from the rental property. Calculate the amount as follows: pro rate the amount by dividing the monthly rental by the number of days in the month and multiplying by the days up to the last day of your tenancy. The landlord can also deduct any outstanding contribution to electricity and water from the deposit.

The balance of the deposit plus interest must be refunded to the tenant not later than 21 days after the lease ended.

 

What if the landlord doesn’t pay back your deposit or short-pays you:

I strongly recommend that the tenant lodge a complaint at the Rental Housing Tribunal in their province. It is a free service and the Tribunal staff will assist the tenant with the process. Google Rental Housing Tribunal Western Cape, for example, and you will find a website containing the complaint forms to complete and submit.

If you need to lodge a complaint with the Western Cape Rental Housing Tribunal:

Other tips for tenants:

  • Insist on an ingoing inspection which is put in writing and signed by both the landlord and tenant when you move in. Take date-stamped photos of every part of the property before you move in and keep them safe.
  • Record offers and undertakings by the landlord (like “we are gutting the place when you move out, so we’re not holding you liable for any damage”) in writing, e.g. by repeating what was said and when in an email to the landlord while it is still fresh in your memory.
  • If you are unhappy with the invoices the landlord sends you for repair costs, get two or three of your own (lower) quotes, and offer to pay the landlord the lower amount.

 

 

 

 

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