Author: Peter Mennen – Head of Legal at TPN
Chris Renecle – MD of Renprop
26 February 2021
I paid my rental deposit but want to cancel, what do I do?
A Property24 reader wants to know what her rights are when it comes to a deposit paid, despite not having signed a lease agreement.
“If we have applied to lease a property and have paid a month’s deposit and water deposit and TPN – but have not signed a lease yet can we cancel the agreement? How much of our money would we lose?” she asks.
Peter Mennen, Head of Legal at TPN says since the lease agreement has not been signed or concluded the reader is not yet bound to the terms of the lease.
“At this point, there is merely a hope of an agreement being entered into and thus, you can request that the deposits be returned to you without any cancellation penalty. There is no cancellation as there is no lease and no leasing relationship,” says Mennen.
In addition to this, nobody should ever pay a deposit beforehand, without vetting the validity of both the property for rent and the landlord- this is a good way to ensure tenants avoid any risk of falling victim to online scams.
While renting a property doesn’t require as much commitment financially and for as long term as buying a home does, tenants should remember that a lease is a legally binding document, which means they should be sure they understand all the points they are agreeing to upon signature thereof.
Chris Renecle, MD of Renprop, who says tenants often come unstuck when they take the signing of a lease lightly and don’t familiarise themselves with all the terms and conditions contained therein. A proper lease agreement, Renecle explains, will ensure both parties’ rights are protected.
Renecle advises tenants to ensure that the points discussed with the landlord or rental agent are, in fact, included in the lease instead of just assuming they are.
1. The costs
The monthly rental amount must be clearly noted in a lease agreement. The lease should also clearly detail and explain any deposits that need to be paid, such as a rental deposit and the lights and water deposit, as well as the terms and conditions surrounding the refund of deposits.
All other variable usage expenses that the tenant will be liable for such as water and electricity should also be clearly noted. The rental agreement should also clearly indicate how and when any rental increases will be put into effect, as well as payment terms and conditions.
2. The rules
Renecle says if a rental property is situated in a sectional title complex or apartment building or within an estate, there will be certain complex or estate rules and regulations that tenants will be obliged to adhere to.
“One of the most common ones is around pets, which has become a big issue recently as more and more complexes and housing estates are banning pets. No matter whether it is a standalone home or within a complex or estate, the lease agreement should clearly state the landlord’s policy around pets, including how many pets will be allowed on the property and detailing size limitations.”
Properties within sectional title or other housing estates are governed by communal rules and regulations, he says the lease agreement’s pet policy needs to be in line with the communal rules surrounding pets.
He says rules around tenant behaviour should also be clearly stipulated in the lease, and it is important for tenants to understand and agree to any clauses in the rental agreement outlining specific behaviour that is prohibited. In the case of the property being situated in an estate or complex, the tenant needs to be made aware of the complex rules, which need to be obeyed. A copy of the rules should therefore be attached as an addendum to the lease agreement.
3. The duration
The duration of the lease should be clearly indicated with specific dates included where applicable to avoid confusion around exactly when tenants can move in or should move out.
4. The termination clauses
There should also be a clear outline of the renewal process should the tenant and landlord wish to extend the lease. There should also be clear terms and conditions for the termination of the lease at the end of the lease period, as well as early termination clauses.
“Tenants need to be sure of renewal and notice clauses as some leases may require a certain notice period, even if the tenant plans to vacate the property after the initial lease has expired. Failure to comply with the stipulated clauses could result in additional costs,” says Renecle.
“Tenants should also be clear on what the process and requirements are should they or the landlord need to terminate the lease early. These clauses should clearly note the amount of notice required, as well as what happens to the deposit should the lease be terminated early.”
5. Rights and responsibilities
Renecle says a sound lease agreement will always include clauses outlining both the landlord and tenant rights and responsibilities. These include clauses that specify who may legally live on the property, including any limitations around subletting. The circumstances in which the landlord can enter the unit should also be clearly outlined, as is regulated the Rental Housing Act.
“Considering that both the landlord and the tenant are responsible for maintaining the property, the obligations of each party need to be clearly spelled out in the lease agreement. This clause should also indicate how the tenant should report any problems that require repairs and outline the process that should take place when repairs are required.”
With any legal document, Renecle says tenants should be very sure of the lease agreement contents and that they understand all the clauses, terms and conditions and are satisfied with them before signing in order to avoid any surprises later on.
The original article can be viewed here: