Renting Your First Home: Leases, Deposits and Your Rights

The one thing

Rent only what you can afford with money left over, and put everything in writing. A home you can pay for every month, under a lease you have read, with a deposit you can prove you paid, is the start of a good rental. Most renting problems begin before the tenant moves in: a rent that takes too much of their income, a deposit paid in cash without a receipt, a lease never read or never written down. This book shows how to avoid them and what the law says when things go wrong. §1.2 covers the costs, §1.3 affordability, and §1.6 the law. This book explains the law in general terms. It is not legal advice on your own lease or dispute; for that, see the Rental Housing Tribunal in your province, an advice office, Legal Aid South Africa or an attorney (Appendix K).

Kinds of Rental Homes

• A flat or apartment. A unit in a block, often managed by an agent or a body corporate. Suits working people, couples, students who share.
• A bachelor flat. One room with a kitchenette and bathroom. Suits a single person on a first salary.
• A room in a house. Your own room; kitchen and bathroom shared. Suits students and young workers on a tight budget.
• A backyard room or cottage. A room or small dwelling behind the owner’s house. Suits families and workers who want a lower rent near transport.
• A shared house or flat. Two or more people renting a whole place together. Suits friends and colleagues sharing costs (Chapter 8).
• A unit in a complex. A flat or townhouse in a sectional-title or estate scheme, with conduct rules. Suits people who want security and shared facilities.
• Student accommodation. Residences or private student housing. Suits students (see Studying and Succeeding at College).
• Social housing. Subsidised rental homes from social housing institutions, for qualifying incomes. Suits lower-income households who qualify.

Each kind has different costs, rules and risks. A backyard room may be cheap but come with no written lease; a complex is secure but has levies, conduct rules and stricter checks.

What Renting Costs

The rent is only part of the cost. Before you look, add up: Once-off costs to move in

• the deposit, often one to two months’ rent (Chapter 5);
• the first month’s rent, usually paid before you get the keys;
• a lease fee or admin fee, sometimes charged by agents (ask what it covers, before you apply);
• a credit check fee, if the agent charges one;
• moving: a bakkie or truck, boxes, and help;
• basics: a bed, a kettle, a stove plate, curtains, cleaning things.

Monthly costs

• rent;
• electricity (prepaid or on a municipal account) and water;
• transport to work or college: a cheaper home far from work may cost more in taxi fares;
• data and airtime;
• food and household items;
• contents insurance, if you choose it (Chapter 12);
• in some places, parking or a share of levies passed on in the rent.

Yearly

• a rent increase (escalation), often once a year (Chapter 6).

What You Can Afford

A common rule of thumb is that rent should be no more than about a third (30%) of your take-home pay, and less if you can. Many landlords and agents use a similar test: they ask that your income be about three times the rent. Work it out (Figure 1.3 and the calculator in Appendix A):

1. Start with your take-home pay (after tax and deductions), not your salary before deductions.
2. Multiply by 0.3: that is the most rent to aim for.
3. Add the other monthly costs of that home (electricity, water, transport) and check that food, savings and emergencies still fit.
4. Check that you can pay the move-in costs without borrowing. If the numbers do not work, look at a smaller place, a room, sharing (Chapter 8), or a place closer to work that saves transport.

Worked Example 1.1 — Karabo’s sums

Ms Karabo Moloi (23) has just started her first job as a junior bookkeeper in Johannesburg. She grew up in Rustenburg and has been staying with an aunt in Soweto, two taxis from work. Her take-home pay is R13 500 a month. She joins an online information session run by Mrs Sizakele Masilela (52), a paralegal at a community advice office in Bloemfontein, who answers tenants’ questions across the country. Mrs Masilela shows her the sum: 30% of R13 500 is R4 050. A bachelor flat in Braamfontein at R4 500 is over that, but it would save R900 a month in taxi fares compared with staying in Soweto. With the saving counted, the flat fits; a R5 500 flat does not. Karabo also adds up the move-in costs: about R14 000. She decides to stay with her aunt for three more months and save before she looks.

The lesson: count take-home pay, count transport, and save the move-in costs before you start looking.

Credit and Reference Checks in Outline

Many landlords and agents check an applicant before agreeing to a lease (Chapter 3):

• a credit check with a credit bureau, with your written consent, to see whether you pay accounts on time;
• proof of income: payslips, a letter from your employer, or bank statements;
• references: a previous landlord, or an employer;
• identity: your ID.

Prepare early

• Get your free credit report from a credit bureau (you are entitled to a free report once a year from each) and check it for mistakes.
• Pay accounts on time: store cards, phone contracts, loans. Late payments stay on your record.
• If you have no credit history (common for first-time renters), a letter from your employer, a guarantor (Chapter 3) or a slightly larger deposit may help.

Backyard and private landlords often check less formally, but they may still ask for an ID, proof of work and a reference.