Renting a home can be an eye-opener for many tenants, as the true cost often extends far beyond just the monthly rental fee, reports Cape {town} Etc.
Also read: Cape Town’s Atlantic Seaboard tops SA’s rent prices
According to BusinessTech, data from PayProp, South Africa’s largest residential rental payment processor, shows that tenants often face unexpected costs beyond rent and a security deposit, with around R2,750 in extra fees, including additional monthly and end-of-contract charges.
Application fee – R250
Tenants should be aware of a non-refundable fee, typically around R250, which covers application processing and credit checks. This fee is not returned, even if the lease isn’t 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 denied due to affordability or credit issues.
Initial lease fee – R1,000 to R2,000
Tenants should also anticipate a non-refundable fee for drafting and executing their lease agreement, covering administrative and legal documentation costs. While the average fee is around R1,000, it can vary significantly by location, with some high-demand areas charging up to R2,000.
Incoming inspection – R500
Joint incoming and outgoing inspections are legally required under the Rental Housing Act and Property Practitioners Act. An incoming inspection fee, averaging around R500, covers a detailed property inspection before move-in to document its condition. This fee is usually charged to the landlord.
Outgoing inspection fee – R500
The R500 fee covers the required inspection of the property when you move out, crucial for securing your deposit return. If no damage beyond normal wear and tear is found, the landlord must refund your deposit with interest within seven days. Additionally, PayProp highlights two other fees that may arise during the rental process.
Monthly Administration Fee – R100 per Month
A fee of around R100 per month covers rental management costs, such as invoicing and maintenance. While sometimes questioned, these fees are legal if included in the lease agreement and are becoming more common as agents seek to cover administrative tasks.
Interest on Arrears – Varies by Amount Owed
Landlords and agents can legally charge interest on missed rent payments. If the lease specifies a rate, it must be reasonable, with 24% per annum being common. If no rate is set, the maximum allowed by the Prescribed Rate of Interest Act (currently 11.25% per annum) applies.
PayProp advises tenants to ask about all fees upfront, as the Consumer Protection Act requires full disclosure of charges before signing a lease. Fees can vary significantly by property and area.
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