South African landlords are not a heartless bunch of Shylocks demanding rental payments at all times, regardless of the trying and difficult circumstances facing tenants according to Michael Bauer, general manager of property management group IHFM.
Many landlords have to deal with tenants who default on rental payments, while worrying about how to pay their bond on the property.
“Most professional property management companies tend to keep rental defaults below about 4% and this is a tribute to the professionalism of many companies. However, I have come across many instances where compassionate landlords have been strung along for six months before resorting to eviction procedures,” he says.
Bauer claims that tenants often have excellent and innovative excuses for defaulting on rental payments and the landlords are sympathetic to the personal circumstances of the tenant.
“This occurs most frequently when the landlord chooses to manage a property rather than use an estate agent or property management specialist to do so.
“Private landlords seem to think that property management is simple and easy and instead of appointing a third party to act on their behalf, they buy a standard lease document and use that as their lease,” he says.
Bauer advises landlords to arrange to pay the mortgage bond on a property on either the 7th or the 15thof the month so that if the rental payment is late, the landlord is not affected.
“By paying the bond on either of those two dates, the landlord has time to chase the tenant for payment and to get the money in before the bond amount is debited to the landowner’s account,” he says.
Another issue is that when a tenant has given notice to the landlord the last month’s rental is often not paid because the tenant believes that the deposit amount will be used to cover that final payment.
“It’s essential for landlords to point out to the tenant that in terms of the law, the deposit cannot be used in lieu of a rental payment,” he says. “The deposit is a separate amount that must be held in trust and must be repaid within 14 days after any costs for remedial work have been deducted from it,” Bauer says.
Bauer points out that while many landlords are sympathetic to the circumstances facing tenants, the reality is that they should act swiftly and immediately against any defaulter.
“It is a costly and time-consuming process to evict a tenant so the ideal situation is to resolve the issue with the tenant as quickly as possible. As soon as the threat of legal action is used against a tenant, the relationship between the landlord and the tenant collapses,” he says.
“This, in turn, often results in the tenant refusing to make any further payments and invariably leads to a costly court process, which should be avoided because of the costs and the length of time it takes to successfully get an eviction order from the courts,” he adds.
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Speaking as former landlord’s ourselves we were very sympathetic, so much so that it got us into great financial difficulty resulting in us having to sell the property we were renting out at further great loss but to try and recoup something and break even, we had no other choice. But we found that the rental agents were even more sympathetic to point that they just didn’t even bother to let us know that we were not going to get our rent month after month and just let the tenants failure to pay slide under the carpet but boy did they demand their management fee every month. - Jonathan & Mandy
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