Across South Africa the Rental Tribunal Board is regularly called on to adjudicate in cases where the landlord, for whatever reason, has decided to increase his rent by more than the limits generally considered reasonable, i.e. above 8% to 10% per annum.
For the past few years, says Tony Clarke, Managing Director of the Rawson Property Group, many landlords, understanding the tough times experienced during a recessionary period, were happy to go for two or three years without raising rentals, the reasoning behind this being that it pays to make a monetary sacrifice if it means that they will hold onto a good regular paying tenant.
“Now with things looking up, this holdback tactic inevitably resulted in many tenants paying lower than the going rate – and it is in these circumstances that many landlords now feel entitled to ask for a 12% to 15% increase – in some cases even more.”
If the tenant then baulks at such an increase and appeals to the Rental Tribunal Board, this can, says Clarke, result in his paying the old lower rental for several months while he and the landlord wait for a case to be heard. The landlord, therefore, loses out – and if the Rental Tribunal Board finally decides in his favour, it will almost never backdate the payments to the start of the appeal period.
“It is imperative,” says Clarke, “that the Rental Tribunal Board works hard to reduce time periods to avoid unfair favour over the tenant and not the landlord.”
Tenants, he adds, will almost certainly continue to take cases of big rent increases to the Rental Tribunal Board, but, some recognition will soon have to be given to the fact that, as demand tends to outstrip supply, certain landlords will begin to feel entitled to raise many rentals to larger-than-usual percentages.