Avoid unscrupulous rental agents and potential pitfalls by knowing the tenants rights in South Africa. This guide explains what you need to know before signing a contract.
Make sure you understand the rental regulations in South Africa before signing on the dotted line in South Africa.
If you’re looking for accommodation in SA, you’ll find plenty of choices to suit any budget. Renting accommodation in South Africa is similar to many other countries; however, make sure you get everything in writing and be aware of your rights and responsibilities as a tenant. Here’s a guide on what you need to know before signing a contract to rent accommodation in South Africa.
Should you rent or buy property in South Africa?
If you’re looking at houses for sale in SA you may find it makes financial sense to buy rather than rent. With the Rand dropping in value, it’s much cheaper than before for foreign currency buyers to purchase a property. In many areas of South Africa, property is available quite cheaply. However, you need to calculate in the additional property transaction costs renting can be expensive, especially in the larger cities such as Cape Town and Johannesburg.
However many expats choose to rent when they first move to South Africa. In this way they can test out various regions, towns and neighborhoods before committing to buying property in South Africa. Moreover, some expats find that initially renting a holiday apartment for a week or two while scoping out longer-term rentals allows them even more options. Foreigners considering shorter stays in South Africa should also note that a capital gains tax of more than 30% applies if you sell a property. This can make it harder to recuperate costs if you can only manage a short-term investment.
Finding a property to rent in South Africa
The terminology of estate agents in South Africa might differ from your home country. Here are the key terms to keep an eye out for.
Types of property in South Africa
- Bachelor flat: a typical one-bedroom flat with lounge/dining room, kitchen and bathroom.
- Flat: bigger than a bachelor flat and available in one-, two- or three-bedroom varieties.
- Town house: usually found in a complex of between 20 and 30 homes. Can be a semi (one floor) or a duplex (two floor) property. You may have to jointly-pay for the upkeep of the the complex, which can sometimes be high.
- Cluster house: a house usually found in a complex, with shared facilities such as pools, club houses etc. Each cluster usually comes with a garden that you maintain, differing to townhouses where garden maintenance is communal.
- Cottage: found inside the grounds of a larger property, usually a second, smaller building away from the main house.
- Detached house: a standard family-size property. As space is not a premium commodity in South Africa the majority of houses are single stories.
Cost of renting a home in South Africa
You typically need to place a deposit and the first month of rent, however. In addition, your landlord or agent can charge you a referencing fee and the cost of drawing up the lease, although the latter is now limited to exact costs only, so if you think this fee is unreasonable you have the right to request receipts.
Once you select your house, the estate agent may ask for a non-refundable holding deposit before contacting the owner. After this, the estate agent contacts referees and confirms your identity with your bank and workplace. You may be asked to cover the fees for this process.
An example of approximate initial costs for renting a house of ZAR 5,000 per month is as follows:
- Deposit (six weeks): ZAR 7,500
- First month of rent: ZAR 5,000
- Registration fees: ZAR 500
- Reference check: ZAR 500
- Total costs: ZAR 13,500
You may be expected to pay a deposit for electricity, water and telephone, especially if you move into a house or cluster. If you choose a house or cluster you will also have to maintain the garden; if you want to hire a gardener, prices can range from ZAR 150–300 per day or more and it’s common to provide them with breakfast and lunch. A live-in maid may come as part of the rental contract. These cost around ZAR 2,500 a month or more.
Rents in South Africa tend to be higher in large cities, with yields of anything from 5–9% on offer to savvy landlords investing in apartments. Cape Town boasts some of the highest rent prices, where you can find apartments in excess of USD 1,700 per month for an average 120-sqm apartment, compared to around USD 1,400 in Johannesburg. For tenants looking for family homes, an average 300-sqm property in Cape Town cost the equivalent of around USD 3,500 per month to rent in 2015.
Documents for signing your South African rental contract
Once you’ve found a property to rent, you’ll need to pay your estate agent a holding deposit. The agent will then contact the landlord to agree on the price and will then undertake reference checks to confirm your identity and your employment details. After completing this, you can sign your tenancy agreement.
Understanding your South African tenancy agreement
Although it’s possible to rent a property in South Africa by oral agreement (especially when renting directly through a private landlord), it’s generally advised to rent through an estate agent and sign a formal tenancy agreement.
Your tenancy agreement should include the following:
- The landlord’s name and postal address
- Details of the estate agent’s contact details
- The address of the property
- Amount and schedule of rental payments
- Any pre-agreed rent increase when the lease gets renewed (e.g., 10% in 12 months)
- The landlord and tenant obligations, ie. who pays for utility bills or if there are any shared building charges
- The conditions on which the tenancy agreement can be terminated (ie. the tenant failing to pay rent or the landlord breaking the agreement); foreigners might also consider a break clause in the event of having to leave suddenly or being transferred.
To minimise the chances of a disagreement at the end of the tenancy, it’s also common practice to attach a signed inventory report.
If you rent through an agent you’ll usually need to pay either four or six weeks rent upfront as a deposit, but there’s no limit set by law. As with any transaction, be on your guard and be wary if a private landlord asks for a significant sum of money upfront for a deposit. If an unscrupulous rental agent asks for up to six months’ rent as deposit, be aware that this is not keeping with normal practice and you can tell them you will agree to six weeks only.
To secure your deposit, place it in an escrow account in both your name and the landlord’s, which locks up your money for the duration of the rental period.
Moving in and out: the inventory and giving notice
Signing the inventory
It’s common practice to have a full inventory report written up before you sign your tenancy agreement. This report will set out any problems with the property and will also include details of any items that belong to the landlord (if the property is furnished). Attach the report to the tenancy agreement and refer to it if there is a dispute over the deposit at the end of the tenancy.
How much notice you have to give and what fees you could have to pay depend on what type of contract you have. If you’re on a rolling contract (ie. the initial contract term has expired), you can usually move out with one month’s notice.
If you’re still in your contract term, however, things are more complicated. First, you’ll need to see if the contract has a cancellation clause. If it doesn’t and you have no cause to argue your landlord has broken the terms of the lease, you can give notice of 20 business days (under section 14 of the Consumer Protection Act), but you will be liable to pay a fee to the landlord. While this fee isn’t set in stone, it should generally cover the ‘reasonable’ costs of bringing in a replacement tenant.
Getting your deposit back
While the tenancy is ongoing, your landlord must keep your deposit in a SA bank account (or if you’re renting through an agent, a trust account). Once you move out, you get your deposit back minus the cost of any fair deductions (such as damage or unpaid rent). You’re also entitled to receive any interest that has been gained on the deposit while you were living in the property.
Your agent or landlord will conduct an inspection when you leave, and it can help to attend this in person. If there are no deductions from your deposit, your landlord will need to refund it within seven days. Should there be any damage, you get your deposit minus deductions within 14 days. If, however, you refuse to attend the inspection, your landlord will have 21 days to refund your deposit.
If you have a disagreement with the landlord, you’ll need to lodge a complaint with the Rental Housing Tribunal in your local area.