Landlords/agents and deposit held in trust

[AvatarS]

I have some questions around the deposit held in trust, and hoping someone here can answer. Relates specifically to a leasing arrangement where there is an agent involved, and the deposit is held in a s78(2A) trust account.

Is there meant to be both an Agent Fee and a Monthly Admin Fee, both deducted from the money held in the trust account?
Can there be any other deductions from the account, without authorisation/notice?
Is there a standard rate for these accounts?

 

[McSack]

From my experience ...

There is an upfront, once-off finders fee / placement fee / agents fee , (call it what you like) and thereafter, a discretionary monthly admin fee if you want them managing the rental .
All these fees are negotiable and should be included from the start in any contract you sign

 

[IzZzy]

I must be missing something here but how can someone make use of a 78(2A) [of the Attorney's Act] trust account if that person is not an admitted attorney?

There is a very special reason why attorneys distinguish between 78(2)(a) and 78(2A) accounts and, as far as I am aware, no joe soap can make use of these.

 

[Candystore]

I must be missing something here but how can someone make use of a 78(2A) [of the Attorney's Act] trust account if that person is not an admitted attorney?

There is a very special reason why attorneys distinguish between 78(2)(a) and 78(2A) accounts and, as far as I am aware, no joe soap can make use of these.

Maybe the agent = an attorney

 

[noxibox]

I have some questions around the deposit held in trust, and hoping someone here can answer. Relates specifically to a leasing arrangement where there is an agent involved, and the deposit is held in a s78(2A) trust account.

Is there meant to be both an Agent Fee and a Monthly Admin Fee, both deducted from the money held in the trust account?
Can there be any other deductions from the account, without authorisation/notice?
Is there a standard rate for these accounts?

You mean they're deducting money from a tenant's deposit?

 

[AvatarS]

From my experience ...

There is an upfront, once-off finders fee / placement fee / agents fee , (call it what you like) and thereafter, a discretionary monthly admin fee if you want them managing the rental .
All these fees are negotiable and should be included from the start in any contract you sign

Nothing in original agreement...
Nothing in the revised agreement they want me to sign now...

I must be missing something here but how can someone make use of a 78(2A) [of the Attorney's Act] trust account if that person is not an admitted attorney?

There is a very special reason why attorneys distinguish between 78(2)(a) and 78(2A) accounts and, as far as I am aware, no joe soap can make use of these.

Sorry - lack of clarity. They are making use of an attorneys' trust account for this.
I don't deal with that part of the law at all, but I do vaguely recall that they're supposed to have me sign something authorising them to deposit the money in the trust account, which I never have...

You mean they're deducting money from a tenant's deposit?

Yes, deductions on the deposit held in the trust account.

 

[ToxicBunny]

Yes, deductions on the deposit held in the trust account.

That bit as far as I know is not lawful.

They can deduct fees from the rents paid by the tenant, but not from the deposit.

 

[IzZzy]

AFAIK nothing can be deducted from the 78(2A) account (or a 78(2)(a) account) - not even bank fees.

If I charge fees, these are debited against the business account for the client. With client's permission I may transfer funds from his trust account to the business account in settlement of the fees so debited.

May I ask why it is held with an attorney? Trying to think of the reason why an attorney would be involved in this.

 

[AvatarS]

That bit as far as I know is not lawful.

They can deduct fees from the rents paid by the tenant, but not from the deposit.

Yeah, that's what I thought too, which is what I found odd about the statement.

AFAIK nothing can be deducted from the 78(2A) account (or a 78(2)(a) account) - not even bank fees.

If I charge fees, these are debited against the business account for the client. With client's permission I may transfer funds from his trust account to the business account in settlement of the fees so debited.

May I ask why it is held with an attorney? Trying to think of the reason why an attorney would be involved in this.

No idea either. I asked for a statement, and they sent me a Nedbank statement, with the address part showing
- attorney's name (the same that they used to draft the lease agreement I refused to sign last year because it was so ridiculously drafted)
- my name (well, Mr [surname])
- "Trust Acc ito Section 78(2A)"
- postal address (checked online that it's the attorney's address).

 

[ToxicBunny]

Regardless of the account type....

The only time deductions may be taken from the deposit, is at time of vacating the premises and having to fix items on the property.

 

[Nerfherder]

Yeah, that's what I thought too, which is what I found odd about the statement.



No idea either. I asked for a statement, and they sent me a Nedbank statement, with the address part showing
- attorney's name (the same that they used to draft the lease agreement I refused to sign last year because it was so ridiculously drafted)
- my name (well, Mr [surname])
- "Trust Acc ito Section 78(2A)"
- postal address (checked online that it's the attorney's address).

AFAIK nothing can be deducted from the 78(2A) account (or a 78(2)(a) account) - not even bank fees.

If I charge fees, these are debited against the business account for the client. With client's permission I may transfer funds from his trust account to the business account in settlement of the fees so debited.

May I ask why it is held with an attorney? Trying to think of the reason why an attorney would be involved in this.

That bit as far as I know is not lawful.

They can deduct fees from the rents paid by the tenant, but not from the deposit.

+1

They shouldn't charge you anything... they should be paying you interest on that deposit.

 

[IzZzy]

What I was aiming at is whether you might be opening up yourself to an interpleader e.g. money is held by third party and that third party has two competing claims e.g. you say to attorney release the money, and your landlord tells the attorney not to.

Whilst the chance of this may be slim, the attorney would side with his client - being the landlord.

Another aspect is that this is -your- money held in trust, but it seems like the attorney is holding the money in trust for his client, being the landlord, which isn't the case.

Sorry I digress, just find this situation weird so some alarm bells are ringing.

 

[AvatarS]

What I was aiming at is whether you might be opening up yourself to an interpleader e.g. money is held by third party and that third party has two competing claims e.g. you say to attorney release the money, and your landlord tells the attorney not to.

Whilst the chance of this may be slim, the attorney would side with his client - being the landlord.

Another aspect is that this is -your- money held in trust, but it seems like the attorney is holding the money in trust for his client, being the landlord, which isn't the case.

Sorry I digress, just find this situation weird so some alarm bells are ringing.

Good point. I've had no contact with the attorneys, so I'm just going to ignore that relationship. My contract is very specific as to the time period they have to release my money - how they go about it is not my concern, as long as they stick to it.

My entire relationship with them has been one weird situation after another. Why should this be any different?

Righto. So what I have from this thread is that I should question the deductions, as there shouldn't be any.
Too many fights and I haven't the energy. Maybe it really is time to move.

 

[noxibox]

Good point. I've had no contact with the attorneys, so I'm just going to ignore that relationship. My contract is very specific as to the time period they have to release my money - how they go about it is not my concern, as long as they stick to it.

My entire relationship with them has been one weird situation after another. Why should this be any different?

Righto. So what I have from this thread is that I should question the deductions, as there shouldn't be any.
Too many fights and I haven't the energy. Maybe it really is time to move.

Well the law is very specific about how long a deposit can be held after a tenant vacates. Withholding the money without good cause will get them into trouble. They definitely should not be deducting any fees and you should be getting interest.