Many South Africans over the age of 55 are turning to property rentals to supplement their fixed incomes – a trend that’s growing rapidly. But what happens when that extra income comes with a nightmare tenant?
As many South Africans over the age of 55 look to supplement their fixed incomes, renting out property has become an increasingly popular option. Whether it’s a cozy granny flat or the family home that has become an empty nest, this venture can provide valuable financial support. However, alongside the potential benefits lie significant pitfalls, particularly the risk of encountering unscrupulous tenants who take advantage of your kindness and, in turn, create a host of challenges.
One of the most pressing issues older landlords may face is the growing scenario of tenants who refuse to pay rent and refuse to move out. Many landlords, drawn by the prospect of a regular income, often trust their tenants with little scrutiny. Unfortunately, this trust could result in significant financial losses, especially when dealing with tenants who exploit the situation by not paying rent and resisting eviction.
Navigating the eviction process in South Africa can be daunting, to say the least, not to mention the expense involved, primarily because of the Protection of Tenants in eviction proceedings (PIE) Act. While this legislation aims to safeguard tenants’ rights, it can also create hurdles for landlords, especially those unaccustomed to legal proceedings. The mere act of initiating eviction proceedings can be time-consuming and costly. Typically, the process can drag on for months, leaving landlords without rental income while incurring ongoing costs such as utilities, maintenance, and property taxes.
Moreover, the PIE Act requires landlords to follow specific legal processes rigorously, which may include lengthy notices and court hearings. Older South Africans, particularly those who aren’t familiar with legal jargon or the intricacies of eviction processes, can find themselves feeling overwhelmed and helpless. Each delay in the process adds to the financial burden, which can be especially stressful for those on fixed incomes.
While eviction can often be seen as the logical step to reclaiming a property, there are alternatives that some landlords may care to explore.
The first step is always communication. If a tenant has fallen behind on rent, it’s essential to have an open conversation. Sometimes, life can throw unexpected challenges, and a simple discussion might reveal temporary financial issues. Suggesting a payment plan might work in your favour, enabling you to receive some income while maintaining a good relationship.
If communication fails, it’s time to take formal action. Sending a demand letter is the next “soft” step in the process. A demand letter is a written notice requesting the tenant to pay rent or vacate the property. Make sure the letter is clear, stating the amount owed and the deadline for payment.
It’s advisable to send this letter via registered post so you have proof of delivery. You could also hand-deliver it to the tenant, accompanied by a trusted relative or friend, who can later attest under oath that you DID in fact personally deliver the letter to the tenant, in the event that the tenant refuses to sign as acknowledgement of receipt. You could also ask the sheriff of the court to deliver this letter, but be advised that you will need to pay the sheriff up-front for their services.
If the tenant still doesn’t respond, you may want to apply to the Rental Housing Tribunal. This body can help resolve disputes between landlords and tenants without going to court. You’ll need to submit relevant documents, including the lease agreement, proof of the unpaid rent, and your demand letter.
This step can be helpful for property owners who want a less confrontational approach. Typically, the tribunal will schedule a hearing where both parties can present their cases.
If the tribunal process does not yield results, the next step is to take the matter to court. You’ll need to apply for an eviction order, in terms of the PIE Act. Prepare yourself for some hefty costs here, including court fees and legal fees if you choose to hire an attorney.
A court-ordered eviction is not a simple matter. Usually the local authority has to be cited as a co-respondent (especially if the tenant claims that they may be rendered homeless by the eviction), and several postponements might well be the order of the day (particularly if the tenant opposes the eviction sought).
While it may feel overwhelming, remember that this is a necessary step to reclaim your property going the legal route
Once you have obtained a court order for eviction, you must schedule the eviction with the sheriff. They will assist in ensuring that the tenant vacates the property peacefully. It is essential to remain calm and avoid any confrontation. Evicting a tenant can sometimes be an emotional experience, but keeping a level head will help everything run smoothly.
But . . . there is another alternative to a court-sanctioned eviction:
I am talking about negotiating a mutually beneficial exit for the tenant. This approach may involve offering a financial incentive for the tenant to vacate the property voluntarily. Although it feels counterintuitive to pay someone to leave, in many cases, it can ultimately save landlords both time and money. By avoiding lengthy legal battles that may drag on for months, landlords may recover their property more swiftly and find new, more reliable tenants.
What I have found to be a successful modus operandi in such negotiations (which relies on the natural greed which seems to be inherent in some human beings) is to decide how much money you are prepared to part with in order to short-circuit the lengthy and expensive legal battle which would otherwise be inevitable. Draw this money in cash (preferably in low-denomination notes) and stuff it into a bag or suitcase.
Accompanied by a strapping son, or son-in-law, or other trustworthy friend, call upon the tenant and explain that you are willing to pay them a “relocation-fee” to expedite their vacating the premises, and spread the cash out on the table. Usually the mere sight of the money is enough to get an agreement to move out much sooner than you may have thought possible.
Make sure that they understand that the money will be paid out, in cash, only once they have moved out and returned the keys. Do not pay anything until they have done so. Be sure to return all the money to your bag before you and your “bodyguard” leave, and deposit the money back into your bank account at the first opportunity to await the tenant fulfilling their side of the agreement. Once they have moved out you can arrange to meet them in a suitable public space to exchange the keys for the cash, with mutual receipts.
I would also suggest changing all the locks on the premises immediately and possibly installing a temporary occupant, a friend or family member or professional security guard, into the premises on a full-time basis for a few nights to ensure that the tenants do not attempt to re-take possession of the property with duplicate keys.
Then, when next renting out your property, it will behove you to carry out thorough background checks before entering into rental agreements. Request references, check past rental history, and, if possible, assess a potential tenant’s credit rating to mitigate risks. A well-structured lease agreement that clearly outlines terms and conditions, including rent due dates and consequences of non-payment, can set the tone for a good landlord-tenant relationship.
In conclusion, while renting out property can be a rewarding way for older South Africans to supplement their retirement income, it comes with its challenges. Knowledge and preparation are key to ensuring success and protecting oneself against tenants who may take advantage. Awareness of legal processes, seeking professional advice when necessary, and being open to alternative solutions can all contribute to a more secure and beneficial rental experience.
Author: Dr Jeffrey P Lewis
MDW INC
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