The Rental Housing Act[1] (RHA) is the prevailing legislation in respect of residential leases in South Africa.
Section 5(3)(e) of the RHA requires the Landlord and the Tenant, prior to taking occupation of the premises, to jointly inspect the premises for the purpose of ascertaining and recording the condition thereof.
The inspection serves as confirmation of the condition of the premises at the time that the Tenant is to take occupation of the premises. Any defects or damages to the premises should be identified, either for the Landlord to rectify prior to the Tenant taking occupation, or depending on the nature thereof, simply for the purposes of noting that the defects and damages were present prior to the commencement of the lease and that the Tenant will not be liable to cover the costs of reparations thereof at the expiration of the lease.
The inspection protects the Landlord and the Tenant from potential disputes later on. Importantly, the condition report will set a standard upon which to assess the premises at the expiration of the lease to ascertain whether there are justifiable deductions to be taken from the Tenant’s deposit.
Crucially, the inspection is to be done jointly. This means that both the Landlord and the Tenant, or their agents, are to be present during the inspection.
There are severe consequences should the incoming inspection not be done in the manner as required by the RHA.
In the event of the Landlord failing to conduct the incoming inspection, the premises shall be deemed to have been received in good and proper condition. In this case, the Tenant will be entitled to receive their full deposit irrespective of whether they have caused damages to the property, as the Landlord will be precluded from deducting any amounts from the deposit at the expiration of the lease for the costs of repairing any damages to the premises. The Landlord would only then be entitled to recover amounts from the deposit for which the Tenant is in arrears – in the instance where the Tenant is behind on payments for rental or utilities, for example.
The Landlord and the Tenant can negotiate whether the Landlord is to effect certain repairs before the Tenant takes occupation, but the incoming inspection does not create the duty to do so. The incoming inspection serves the purpose of recording the condition of the premises at the commencement of the lease. There is an obligation, however, that the Landlord ensures that the premises is safe and habitable. In the event that repairs are necessary in order to make the premises is safe and habitable, effecting those repairs will be obligatory on the Landlord.
In an attempt to avoid disputes later on, we recommend to Landlord’s and managing agents to consider the following when holding the incoming inspection:
- Create an inspection checklist of all the fixtures, features and appurtenances to the property, listing each of the rooms in the property individually, and including the condition of features such as swimming pools, driveways and intercom systems. (Photographs with notes attached are always helpful to avoid uncertainty as to what the factual position is.)
- It goes without saying that the condition report should be in writing, however confirmation of the parties’ agreement thereto is imperative – parties should sign the inspection report and have same witnessed, with a recording of all parties present at inspection being confirmed.
- The incoming inspection should be held as far in advance of the commencement date of the lease agreement as possible, allowing the Landlord ample opportunity to rectify any damages to the premises which may be present prior to the Tenant taking occupation. Try avoid a circumstance whereby the Tenant’s occupation is delayed due to any required renovations.
COMMON QUESTIONS
Can the Landlord utilise the Tenant’s deposit to cover the cost of reparations prior to the Tenant taking occupation of the premises?
No, the Tenant’s deposit is held by the Landlord for damages incurred by the Tenant during the subsistence of the lease, and not any damages present prior to their occupation. Any reparations required prior to the Tenant’s occupation is for the Landlord’s account.
Does the Landlord and Tenant need to be personally present at the incoming inspection?
It is always advisable that the two parties are present personally, however general practice allows for either or both parties to be represented by third-parties. A managing agent, therefore, can represent a Landlord should they be unable to attend personally.
What happens if the Tenant refuses to attend the incoming inspection?
The RHA stipulates that the incoming inspection is to be done jointly, however does not specify the repercussions on the Tenant in the event that they refuse to attend. In this instance, the Landlord is advised to take photographic and video evidence of the premises prior to the Tenant’s occupation for documentary proof. The risk will be on the Tenant as to whether the evidence will be a true reflection of the premises’ condition. Most lease agreements afford the Tenant an opportunity to note any defects which they become aware of within the first seven days of their occupation however.
Does a premises need to be handed-over defect-free?
It is always advisable that the Landlord rectifies as many defects as possible prior to the Tenant’s occupation of the premises. However, provided that the defects are not material to the Tenant’s use, enjoyment and occupation of the property, there will usually be discretion applied to the defects and the required reparations thereof.
In summary, the incoming inspection is vital to the protection of the interests of both the Landlord and the Tenant. Active participation by both parties may lead to the avoidance of expensive disputes which will inevitably arise at the expiration of the lease.
[1] ACT 50 of 1999.
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