Tenants deposit, and claim on interest accrued during the lease.

[BloodBurner9000]

According the the rental housing act of 1999 (available on http://www.info.gov.za/view/DownloadFileAction?id=70618 ) the deposit held by the landlord must be held in an interest bearing account, and the interest must be paid to the tenant when he gets his deposit back.

So my question is, must this explicitly be stated in the letting contract in order for the tenant to have any claim like this?

It is my understanding that certain rights and obligations are underlined in the acts released by government, and unless waived is still binding to both the tenant and landlord. Is this correct? When is it not the case?

 

[Other Pineapple Smurf]

Don't screw over your tenant, Zuma kills a unicorn every time you do.

 

[BloodBurner9000]

Don't screw over your tenant, Zuma kills a unicorn every time you do.

I don't have a tenant (yet), and I am in fact a tenant presently, but my contract said nothing about interest rates on deposits, even if there is a requirement dealing with it in that act. It surely cannot be the case that the law must be copy pasted into each contract? Certain rules and provisions apply unless waived, yes?

 

[supersunbird]

OK, lets put it this way, on most bank accounts (except Capitec) the interest earned is so low that its probably cancelled out by the bank fees or even reduced by the bank fees and thus one is lucky to get your original amount back.

 

[BloodBurner9000]

I agree supersunbird but this is not exactly what I am asking.

The question deals with how the letting contact and law works together.

I. E, can the tenant as the law states but the contact does not, demand proof from the landlord that he followed the act, and that he must provide the tenant with proof that the money was invested in accordance to the law? It is easy to say to the tenant that he only got R5 interest, "here you go, here's the R5" but in the meantime it was used for some other purpose, enriching the landlord, paying other tenants' deposits, etc.

 

[Slootvreter]

Fighting with landlords or or letting agents is hell. Bloody snakes will want to keep as much money for themselves as they can. You are very lucky if you get your original deposit back, let alone with interest

 

[MKFrost]

I agree supersunbird but this is not exactly what I am asking.

The question deals with how the letting contact and law works together.

I. E, can the tenant as the law states but the contact does not, demand proof from the landlord that he followed the act, and that he must provide the tenant with proof that the money was invested in accordance to the law? It is easy to say to the tenant that he only got R5 interest, "here you go, here's the R5" but in the meantime it was used for some other purpose, enriching the landlord, paying other tenants' deposits, etc.

I see no reason why the tenant may not ask for a copy of the bank statement. As a landlord I give the tenant a copy of the bank statement(s) together with their deposit when returning it to show the exact amount of interest minus the service fees if any etc..

The law is clear about this. It does not say that you must pay back x and until then you can do as you please with the deposit just as long as you pay the Rx back on x day. It clearly stipulate what must be done so I see no problem for the tenant asking whether this was done or not.

 

[MKFrost]

From the link you posted....

...and the tenant may during the period of the lease request the landlord to provide him or her with written proof in respect of interest accrued on such deposit, and the landlord must provide such proof on request...

Also, the act states that the interest may not be any lower than that provided on a 'savings' account...

...pay the tenant interest at the rate applicable to such account which may not be less than the rate applicable to a savings account with a financial institution...

 

[MrR]

As a previous tenant, I've struggled twice to get the interest returns from two different landlords.
In both cases, I only got my deposit back. Wanted to take it to small claims court - out of principle - but decided that it wasn't worth the time and effort to go that far.

Can't remember if it was stated in the contract.

 

[ToxicBunny]

From the link you posted....

...and the tenant may during the period of the lease request the landlord to provide him or her with written proof in respect of interest accrued on such deposit, and the landlord must provide such proof on request...

Also, the act states that the interest may not be any lower than that provided on a 'savings' account...

...pay the tenant interest at the rate applicable to such account which may not be less than the rate applicable to a savings account with a financial institution...

Awesome..

FNB Smart Save product would have the amount of deposit I received from my tenant at 0% interest (R0 - R4500 receives 0% interest)

 

[Fulcrum29]

According the the rental housing act of 1999 (available on http://www.info.gov.za/view/DownloadFileAction?id=70618 ) the deposit held by the landlord must be held in an interest bearing account, and the interest must be paid to the tenant when he gets his deposit back.

So my question is, must this explicitly be stated in the letting contract in order for the tenant to have any claim like this?

It is my understanding that certain rights and obligations are underlined in the acts released by government, and unless waived is still binding to both the tenant and landlord. Is this correct? When is it not the case?

All rental contracts (in regard with the rental housing and other relevant acts) that I have seen included the clause. Contracts are made to make the parties aware in any terms and conditions that apply, should you exclude the clause, then it still applicable as no contract can be above the law. People not understanding this, should read the Government Gazette more to enhance their general understanding surrounding SA law, amendments, acts in general and bills.

 

[BloodBurner9000]

...should you exclude the clause, then it still applicable as no contract can be above the law...

Thanks for answering my question. Exactly, that is what I suspected. Not everything HAS to be stated, and the law always applies.

What interest is received, at which bank, (with or without 'service' fees deducted - I guess one can make an argument that the law states interest and not net investment return must be paid back) is a different matter. Off course this is expensive to litigate.

 

[MKFrost]

... I guess one can make an argument that the law states interest and not net investment return must be paid back) is a different matter. Off course this is expensive to litigate.

Doubt whether that will fly as any cost incurred by making such investment will be for your account as the investment was made for your benefit.

 

[Billy]

I agree supersunbird but this is not exactly what I am asking.

The question deals with how the letting contact and law works together.

I. E, can the tenant as the law states but the contact does not, demand proof from the landlord that he followed the act, and that he must provide the tenant with proof that the money was invested in accordance to the law? It is easy to say to the tenant that he only got R5 interest, "here you go, here's the R5" but in the meantime it was used for some other purpose, enriching the landlord, paying other tenants' deposits, etc.

The tenant can ask for proof that the deposit is in an interest bearing account. I have one tenant deposit in a separate 32Day deposit account. The rest are held by Rentmaster who do most of my rental collections.

When a tenant leaves he gets an account which shows interest received and charges on the deposit withheld, together with copies of the receipts for repairs carried out.

 

[Chevauxza]

The contract I have with my tenant is that his deposit gets interest, but that interest is also available to the landlord for any valid claim against the deposit (breakages etc). Always play open cards and share the account details and statements with the tenant.

 

[HavocXphere]

Expecting a return approximating inflation is not too much to ask imo.

 

[supersunbird]

Expecting a return approximating inflation is not too much to ask imo.

Not even a Capitec account does inflation. Neither does money markets. And I suspect that's the only interest bearing accounts you can put it into.

 

[BloodBurner9000]

Maximising interest rate is in the interest of the landlord too, because it provides him with a bigger slush fund. It may be used just like extension of deposit.

Anyways I asked my agent to provide a statement, and although he was unwilling at first, very rude, I mentioned that it was within my rights and he then told me he'll send the proof.

 

[KleinBoontjie]

OK, lets put it this way, on most bank accounts (except Capitec) the interest earned is so low that its probably cancelled out by the bank fees or even reduced by the bank fees and thus one is lucky to get your original amount back.

I rent through Seeff and every year when my contract is renewed, I receive a print-out of what my deposit is then. It's been 5 years, my rent went up every year by 5% and once by 10% and my deposit is now worth more than my rent is now. Up by more than a R1000. Don't know where they put the money, but they're getting good interest.

 

[HavocXphere]

Not even a Capitec account does inflation. Neither does money markets. And I suspect that's the only interest bearing accounts you can put it into.

It most more a comment on the principle than practical considerations. i.e. You deposit 5k worth of purchasing power...one could reasonably expect to get back 5k worth of purchasing power later...seeing how its a deposit and you're supposed to get it back in full.