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Can a tenant under debt review be denied a rental home?

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I need advice. A friend is under debt review and no rental agents will rent to her. Isn’t this unconstitutional? She pays rent on time and needs a place to stay. Also what percentage interest should a deposit accrue? Lease agreements make no mention of interest. – Arlinda


Hi Arlinda, landlords and estate agents perform comprehensive background checks on their tenants which includes a history of all their other credit agreements, judgements, defaults and whether or not an individual is under debt review.

There are no legal requirements that exclude an individual who is undergoing debt counselling under debt review from being party to a lease agreement.

The first thing to be aware of is that if the person pays on time and in full it will positively influence their credit score on TPN – the credit bureau that stores rental payment profile information. It is important that someone who wishes to improve their chance of securing a rental property in their own name makes sure that their agent or landlord is uploading their positive payment profile information to the credit bureau.

Besides that, there are a few things that your friend can do herself to secure a rental home; the key is to go the extra mile to ensure that her rental application is successful:

  1. Approach a potential landlord or agent with a double deposit in hand.
  2. Make the offer for someone to stand surety for her or she could co-sign the agreement with a friend or family member who have a good credit history.
  3. Submit her bank statements to improve her application.
  4. Ask her debt counsellor to submit her budget as proof of affordability.

Percentage of interest earned on a tenant’s deposit?

Understand your budget, with rate rises included, when you determine rate rises in pre-qualifications.

If the deposit is held by the landlord, it must be held in an interest-bearing account with the minimum rate of interest applicable to a savings account.

If the deposit is held by the estate agent, the deposit must be held in a trust account. The interest earned on the trust account is payable to the Estate Agency Affairs Board unless the lease agreement provides that the interest is paid to the tenant.

In TPN’s experience disputes can easily arise unless the lease agreement notes who it is that will hold the deposit and what interest will accrue. It is advisable to always include this provision in the agreement.

Got a burning question? Email mariette@hometimes.co.za and we’ll be sure to assist you

Michelle Dickens, MD of TPN.

Answered by Michelle Dickens, MD of credit bureau, TPN


David A Steynberg, managing editor and director of HomeTimes, has more than 10 years of experience as both a journalist and editor, having headed up Business Day’s HomeFront supplement, SAPOA’s range of four printed titles, digimags Asset in Africa and the South African Planning Institute’s official title, Planning Africa, as well as B2B titles, Building Africa and Water, Sewage & Effluent magazines. He began his career at Farmer’s Weekly magazine before moving on to People Magazine where he was awarded two Excellence Awards for Best Real Life feature as well as Writer of the Year runner-up. He is also a past fellow of the International Women’s Media Foundation.

Review overview
  • Denis 27th July 2017

    HI All

    In terms of the National Credit Act 34 of 2005 section 8(2) An agreement, irrespective of its form, is not a credit agreement if it is—
    (b) a lease of immovable property

    It is then intriguing that most, if not all, landlords and agents do not consider applicants under debt review.

    I submit that effectively what this means is that, subject to perfecting the landlords lien, all the movable assets that may be protected under the “debt review” is at risk of being attached and upon successful litigation sold in a sale in execution sale in the event the tenant does not pay the rent due. It can be argued that as the items my be purchased under hire purchase the item cannot be attached and sold. This is however only for the benefit of the “creditor” and not the tenant. In addition the creditor must exercise their rights.

    Save for the normal non discriminatory criteria in the constitution namely, race, sex, religion etc, reinforced in the Rental Housing Act 50 of 1999, the agent or landlord can decline any individual. In fact they do not even need to give a reason why the applicant / application has been declined.

    The message Michelle gives is quite correct. Tenants must keep their house in order (pay the rent on time). If the tenants find themselves in a compromised position they can sweeten the deal with a higher deposit. This however may complicate the consumers debt review status as they may need to explain to the curator where?, all of a sudden, did the consumer come up with three months deposit rather than contribute to the outstanding debt due under the debt review.

    I submit that due to the obvious complications and the huge demand for rental properties the landlords and agents are not bothered to frustrate their enterprise with people who by their own admission are unable to manage their financial affairs.

  • janeentheresa 12th August 2018

    It’s high time rental crooks are prosecuted for rental fraud and theft in South Africa — Because that is literally what it is — theft! The law encourages this habit. Property is income! These criminal tenants should be charged and locked up as a deterrent to others out there, who are looking for a free ride (theft) at the expense of someone else’s income! If you don’t have the money to pay your rent, then simply, just move out!