Landlords!  Protect your investments!

22 May 2009

Landlords are urged to protect their investments by being fully aware of the conditions contained in the Rental Housing Act which governs residential rentals.  Statistics show that 48% of tenants nationally are not paying their rent coupled with the fact that many are fully aware that it takes at least three months to obtain an eviction order before they have to move.

This means that residential property owners can be prejudiced without rent income for at least three months.

An effective Agreement of Lease with clauses stipulating the process which will to be taken if a tenant does not pay rent or services is essential.  It is recommended that a landlord takes immediate steps to recover any outstanding monies due by his tenant and thus mitigate his losses.  It is essential that these steps are taken prior to applying to the courts or a Rental Tribunal for an eviction or attachment order.

In the current economic climate many tenants are either losing their jobs or agreeing to a reduction in salary, and this affects their capacity to pay rent and their other obligations.  These tenants have to make major decisions about moving because to remain in a property that they cannot afford may lead to their becoming black listed and which will have a permanent bearing on their credit history.

Most landlords are unaware that they are obliged to pay interest on deposits held on behalf of the tenant even if their leases do not state this.  The Act takes precedence in all cases even if there is a clause in the lease saying that there will be no interest paid.  It is important to note that payment of interest is always demanded by the courts because it is a tenant’s right to be paid interest on his money.

Landlords should also be aware when hey deduct any amounts from the damages deposits held that only certain expenses may be deducted and that these should be stated in the Agreement of Lease.  The Act expects that a joint incoming inspection must be conducted before the tenant moves into the property, and that a joint outgoing inspection will take place as the tenant moves out.

The comparison between the who dictate the damages that may have taken place and the reasonable cost of their repair may be deducted from the deposit.  Once again if these inspections have not taken place and a tenant approaches a court or the Rental Tribunal for non refund of his deposit, the chances are that his deposit plus interest will have to be refunded.

Landlords currently feel most unhappy about what they believe to be an unfair Rental Housing Act, but in the main most landlords are unfamiliar with its workings and fall short with regard to their processes when applying the act.  A tenant can be evicted, an attachment order can be issued, and damages can be deducted, but only in terms of the act.  A landlord may not take the law into his own hands and do as he pleases without approaching a court of law or Rental Tribunal after the necessary punitive measures have been put into place.