TALKING BUSINESS: Protection skewed when it comes to property
There seems to be an assumption by government that the buyer needs protection while the seller does not.
Regardless of the economy and the rising interest rate, property remains one of the best ways for the average South African to accrue wealth. But there’s a problem – when it comes to selling or leasing, the law favours the buyer and tenant.
The Consumer Protection Act (CPA) and the Rental Act both offer substantial protection to tenants. For example, a tenant (who is a private individual and not a corporation or trust) may cancel any fixed term lease by giving 20 business days’ notice in writing. Previously a calendar month was required.
When entering into a contract with a tenant, a landlord hands over access to the property – something that is quite difficult to revoke. The tenant however could decide not to pay the lease for example. And while not all landlords perform in terms of the agreement; it is more often the tenant that defaults. Removing a tenant in breach of contract is also a time-consuming and costly exercise.
Due to the fact that it is so difficult to deal with non-compliant tenants, many property owners are hesitant to become landlords, not caring for the risk of financial loss and legal costs. Our rental market could thus be in a healthier situation if landlords were given more protection against tenants that don’t pay on time.
Most landlords do not have the time to ‘manage’ their property and tenant, and are often blinded by offers of cash up front and the like. However, the best way for landlords to safeguard their investment is to ensure that they select the right tenant and maintain a firm handle on what’s happening on their property. Often this means working through a qualified and experienced rental agent who has access to resources that a private landlord doesn’t.
While tenants do enjoy more protection than landlords, renting out property can still be very rewarding as long as the landlord does their homework when it comes to appointing a rental managing agent and selecting a tenant.
Content provided by Leap Frog Property Group.
