In light of further cases of misappropriated rental deposits having been reported, Michael Bauer, managing director of estate agency IHPC, said he felt strongly the need to remind tenants and landlords that they must check that the agent that they are dealing with has a valid registration with the Estate Agency Affairs Board and clients should ask to see the agent’s Fidelity Fund Certificate as proof of this.
In addition, it would be advisable to deal with agents who are registered with the Institute of Estate Agents SA, as this gives an added level of protection and an idea that the agent takes himself seriously by being affiliated to a professional association, said Bauer.
The accounts that rental deposits are paid into are meant to be trust accounts which are audited, and tenants and landlords are within their rights to ask whether there is transparency with regards to the statements of account, he said.
When dealing with a rental agent, it is always best to deal with a specialist in that field, and not someone who does “a little of everything”, warned Bauer. If you deal with an agent who knows his market and what needs to be done to manage a property correctly, there is little chance that he will mismanage the income or deposits placed in his care, as he depends on repeat business to earn an income.
Tenants rely on their deposits being refunded with interest after their lease expires and if it is found that the funds have “gone missing” it puts them in a financial predicament they shouldn’t have to deal with, because they often need this money to pay the deposit on their next rental property.
Landlords, too, suffer because they might need to claim a portion of the deposit amount for repairs or clean-up of the property and if there is no way of tracing where the money has gone, he will be out of pocket, said Bauer.
“Surprisingly, in certain areas,” he said, “there are still many agents operating without a Fidelity Fund Certificate, which would also mean that they are unlikely to have audited accounts.”
Tenants and landlords should always ask for proof of registration but failing that, they can check online on www.eaab.org.za and can go to the Institute of Estate Agents SA website to check for registration at www.ieasa.co.za.