What to do if landlord refuses to return deposit South Africa

Rental housing arrangements are prevalent, but occasionally, disagreements may emerge concerning the return of a security deposit. This in-depth guide delves into the steps that tenants can take to ensure a smooth resolution of deposit disputes while providing a detailed understanding of the Rental Housing Act, which plays a pivotal role in these interactions.

The Significance of the Rental Housing Act

At the core of tenant-landlord relationships lies the Rental Housing Act. This legal framework is instrumental in regulating the dynamics of rental agreements, particularly when it comes to security deposits. A crucial provision within the Act is Section 5(3), mandating landlords to invest tenants’ deposits in an interest-bearing account at a bank for the entire lease term. Moreover, the law stipulates that the interest accrued must be returned to the tenant along with the original deposit when they decide to move out.

Importantly, the Rental Housing Act prevails over any clauses or agreements in a lease. Even if the lease does not mention the Act’s provisions or if the landlord was unaware of these requirements, they are legally obligated to adhere to them.

Valid Grounds for Withholding a Deposit

Landlords have specific rights when it comes to withholding a tenant’s deposit. If the tenant is in arrears with the rent at the time of moving out, the landlord has the authority to retain the deposit. Furthermore, landlords can utilize the deposit to cover the costs of repairing actual damage to the property, provided that the damage surpasses the scope of regular wear and tear.

Documentation: Your Best Ally

Detailed documentation is the cornerstone of a smooth deposit refund process. It initiates with a comprehensive move-in inspection report. To establish a record of the property’s condition, both tenant and landlord should perform an inspection together at the commencement of the lease. Any pre-existing defects should be documented in writing. The document should be signed by both parties and attached to the lease agreement.

Similarly, upon move-out, another joint inspection is advisable. A side-by-side comparison of the property’s condition during move-in and move-out can help identify new issues. If there are damages to address, tenants may be given the choice to rectify them personally or delegate the task to the landlord. In the latter scenario, securing receipts for repair expenses paid from the deposit is essential.

The Deposit Refund Process

A clear process governs the return of the deposit and interest:

• In cases where repairs cost less than the deposit plus the accrued interest, landlords are obliged to reimburse the tenant the difference.
• In situations where no repairs are necessary, and the tenant is up to date on rent payments, the landlord must refund the full deposit, including the interest, within seven days of the tenant’s departure.
• Emphasizing joint inspections, the Rental Housing Act mandates both landlord and tenant to inspect the property together during move-in and move-out. Should the landlord fail to facilitate a joint inspection before the tenant’s departure, the law presumes their satisfaction with the property’s condition, necessitating the return of the deposit and interest to the tenant.

Dispute Resolution: Tribunal or Small Claims Court

If, despite adhering to the Rental Housing Act and other statutory obligations, landlords decline to refund deposits and interest, tenants have options for dispute resolution.

Rental Housing Tribunal: This avenue involves a step-by-step process:

1. Contact the Tribunal: Begin by contacting the Rental Housing Tribunal. They will initiate the process by reaching out to the landlord to hear their side of the story.
2. Mediation and Hearing: If an agreement cannot be reached, the Tribunal may facilitate a mediation process, followed by a hearing. During these proceedings, both parties have the opportunity to present their cases and provide evidence.
3. Tribunal Order: Subsequently, the Tribunal will issue a binding order, equivalent to a court judgment. Should the landlord fail to comply with the order within the specified timeframe, the sheriff of the court can be summoned to enforce the order and collect the owed funds.

Small Claims Court: For tenants who prefer this route, the process is detailed as follows:

• Step 1: Contact the Landlord: Attempt to settle the claim directly with the landlord.
• Step 2: Write a Letter of Demand: In cases where direct communication fails to yield a resolution, send a written demand. This letter should outline the facts supporting your claim and the specific amount sought.
• Step 3: Visit the Clerk of the Court: After a 14-day waiting period, report to the clerk of the court with proof of delivery and all relevant documents.
• Step 4: Summons Issuance: The clerk assists in drafting the summons, notifying the landlord of the legal proceedings.
• Step 5: The Hearing: Attend the court hearing in person, providing evidence and concisely stating your case.
• Step 6: After Judgment: If the judgment is in your favor, the landlord must make immediate payment. Alternatively, if they are unable to pay immediately, the court may investigate their financial position and establish a payment plan to settle the owed funds.

The Rental Housing Act is a valuable resource for tenants, ensuring fair treatment and deposit return procedures. Understanding your rights, documenting property conditions, and knowing the legal steps to follow in case of disputes can help you navigate the rental landscape with confidence.