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Security deposits – They’re there for a reason

security-depositAn increasing number of South Africans are choosing to rent properties as the high debt-to-disposable income ratio makes it difficult for them to get on to the first rung of the property ownership ladder.

The owner of a rental property takes a risk in allowing a tenant to live in his property. Apart from the obvious one of paying the rent regularly, they may also be concerned that the tenant should look after and respect the property while they live there. The security deposit is a mechanism that allows him to prepare or restore the premises for a new tenant.

The owner will want to clean carpets, possibly repaint and generally present the property in a way that the new tenant can feel comfortable and clean in their new environment. The security deposit from the previous tenant is used to effect any repairs and to restore the property to the state it was when they first moved in, fair wear and tear excepted. And for these reasons, it is unusual for a tenant to receive their entire deposit back after they leave a rented property.

The landlord is bound by law to keep his tenant’s security deposit in an interest-bearing account. If there is a managing agent involved, then it has to be deposited in a trust account for the duration of the lease.

If there are no repairs or maintenance issues when the tenant vacates the premises, then they are entitled to the refund of their entire deposit, plus interest, within seven days of the lease expiring. However, if some of the money had to be used for repairs, then they are entitled to get the balance of their money plus interest within 14 days of the work being completed. The landlord also has to provide the relevant receipts of the work done for the tenant’s inspection. If either the landlord or tenant wants to resolve a dispute they have been unable to settle, then they can turn to the EAAB or the Rental Housing Tribunal (0860 106 166) for assistance.
For many renters paying the deposit is a nuisance and an inconvenience – but it is unreasonable to expect the landlord to have to pay for repairs or maintenance the tenant was responsible for. The deposit ensures that there are resources available for the landlord to use after the tenant leaves.

Tenants treating the property they rent with respect and care, as though it was their own, will ensure that they will get their deposit back very quickly; it will also ensure a good relationship with the landlord.

Contact us at IGrow Wealth Investments – my team and I will help you on the road to achieving the success you deserve.

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