Protecting yourself from non-paying tenants in South Africa requires a combination of legal safeguards, proper vetting, and clear lease agreements. Here’s a comprehensive guide to help landlords minimise the risk:
How to Protect Yourself from Non-Paying Tenants in South Africa
1. Screen Tenants Thoroughly
Before signing any lease:
- Credit Check: Use agencies like TPN, Experian, or TransUnion to check the tenant’s credit record and payment history.
- Employment Verification: Confirm income and job stability. Ask for 3 months’ payslips and bank statements.
- References: Contact previous landlords for feedback on tenant behaviour and payment reliability.
- ID Verification: Ensure you get a certified copy of the tenant’s ID or passport (if foreign).
2. Use a Legally Sound Lease Agreement
Your lease should:
- Comply with the Rental Housing Act.
- Clearly state:
Rent amount and due date.
Penalties for late or non-payment.
- Eviction terms and breach of contract.
- Be signed by both parties with initials on each page.
- Include an inspection report and inventory list (before and after occupancy).
3. Request a Deposit
- Charge at least one to two months’ rent as a deposit.
- Hold the deposit in a separate interest-bearing trust account, as required by law.
- Use the deposit to cover unpaid rent or damages at the end of the lease.
4. Use a Rental Agent or Attorney
Professional property managers:
- Vet tenants.
- Draft solid lease agreements.
- Handle disputes and evictions legally.
- Provide rent collection and accounting services.
5. Act Quickly on Non-Payment
- Send a written notice of breach as soon as a payment is missed.
- Give the tenant 20 business days to rectify (as per the Consumer Protection Act).
- If they still don't pay, cancel the lease and begin the legal eviction process through the court.
- Do not lock them out or remove belongings; this is illegal and may result in legal trouble for the landlord.
6. Consider Rent Guarantee Insurance
Some companies offer landlord protection insurance that covers:
- Missed rental income.
- Legal fees for eviction.
- Property damage beyond the deposit.
7. Use Debit Orders Instead of EFTs
Require tenants to pay rent via a monthly debit order, reducing the chance of missed or delayed payments.
8. Inspect the Property Regularly
- Conduct inspections at least every 3-6 months (with proper notice).
- Ensure the property is well-maintained and the tenant is complying with the lease.
9. Know Your Legal Rights
Familiarise yourself with:
- Rental Housing Act
- Consumer Protection Act
- Prevention of Illegal Eviction (PIE) Act
- Know the legal eviction process — you cannot evict without a court order.
Summary Checklist:
Protection Step Why It Matters
Credit & Background Check Reduces the risk of problematic tenants
Written Lease Agreement Establishes Enforceable Terms
Deposit Held Securely Covers damages/unpaid rent
Early Legal Action Prevents prolonged non-payment
Professional Help Ensures lawful, effective property management
Insurance Financial safety net for the worst-case scenario