Renting an apartment can be an eye-opener for many tenants, as the actual costs often go far beyond the monthly rent, reports Cape Town etc.
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Accordingly BusinessTechData from PayProp, South Africa’s largest residential rental payment processor, shows that tenants are often faced with unexpected costs in addition to rent and security deposits. These are additional fees of around R2,750, including additional monthly fees and end-of-lease fees.
Registration fee – R250
Tenants should be aware of a non-refundable fee, usually around R250, which covers processing the application and credit check. This fee is non-refundable even if the tenancy agreement is not signed. However, PayProp advises that you are entitled to request a copy of your credit report, which can provide valuable insight if your application is rejected due to payment or credit issues.
Initial leasing fee: R1,000 to R2,000
Tenants must also expect to pay a non-refundable fee for the preparation and signing of their tenancy agreement, which covers the costs of administrative and legal documentation. The average fee is around R1,000, but can vary considerably depending on location. In some high-demand areas, up to R2,000 may be charged.
Incoming goods inspection – R500
Joint entry and exit inspections are required by law under the Rental Housing Act and the Real Estate Agents Act. An entry inspection fee averaging around R500 covers a detailed property inspection prior to move-in to document the condition of the property. This fee is normally charged to the landlord.
Exit inspection fee – R500
The R500 fee covers the required inspection of the property when you move out, which is crucial for the return of your security deposit. If no damage beyond normal wear and tear is found, the landlord must return your security deposit with interest within seven days. In addition, PayProp points out two other fees that may apply during the rental process.
Monthly administration fee – R100 per month
A fee of around R100 per month covers rental administration costs, such as invoicing and maintenance. These fees are sometimes questioned, but are legal if included in the rental agreement. They are becoming more common as agents try to cover administrative tasks.
Late payment interest – varies depending on the amount owed
Landlords and letting agents can legally charge interest on outstanding rent payments. If an interest rate is specified in the lease, it must be reasonable. 24% per annum is common. If no interest rate is specified, the maximum allowable interest rate under the Prescribed Rate of Interest Act applies (currently 11.25% per annum).
PayProp advises tenants to inquire about all fees up front, as consumer protection law requires full disclosure of costs before signing a lease. Fees can vary significantly depending on the property and area.
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