Good day,

I am a SA property owner living overseas at this time and have engaged with estate agents of Richards Bay to manage the letting out of my property(3 bed simplex) to suitable tenants. Duties included finding suitable tenants with proper due diligence processes and management of the rental process including receiving payments from the tenant and payment to my bank account. 

On 8th Nov 2016, a new tenant was found after the previous tenant (under the same estate agents management) left without payment of rental and with damages to my property. I then specifically requested the responsible agent of estate agents to conduct proper DD processes and ensure no repeat of issues as per the previous tenant they has managed. I also called the manager of the estate agents to state my dissatisfaction as to how the previous tenant was managed(I had to previously e-mail their offices from overseas to remind them that the rental was overdue). They assured me that this new tenant would be managed much better. I went ahead with signing on the new tenant.

2 months into the new lease, the new tenant defaults and does not pay the rental. I had to contact the estate agents again and they assured me that they were in contact with the new tenant and the rental would be paid with the next month’s payment. I indicated that this was against the lease agreement gave a warning regarding this issue. This however continued for the next 5 months and I gave immediate notice to the estate agents to get the tenant out and also recover the outstanding rental. The estate agents again made promises that the rental would be paid shortly and they are following up on this. This however was not the case as I had to insist that they follow up and they avoided providing any explanation other than the tenant is at fault.

I would like to get advice as to what are my legal recourse to get the estate agents to be accountable and pay all costs for failing to manage the lease resulting in me incurring unnecessary costs and loss in rental(trip to SA from my residence in USA ~R50K + outstanding rental owed ~R30K + fix rental property ~ R10K - tenant ran off with keys and caused damages). The estate agents failed to manage lease, did not contact tenant when rental was due, failed to follow up on outstanding rental due, deducted the estate agents commission first from deposits held but failed to notify me about how the rental deposit was used. Lease agreement was in place and was not effected by the estate agents when issues was becoming apparent. Also, what would the advice be in regard to handing the tenant and the estate agents.

Hi there and thank you for your question,

My first comment (without implying that the estate agent is to blame, it's just a general comment regarding the entire industry - i.e. residential management companies) is that companies who "manage" tenants and properties such as your own typically do not do a great job of performing a DD on the prospective tenant. Yes, they can obtain a credit record for the potential tenant. Yes, they can get a bank statement / salary slip showing that the tenant "can" afford to pay. But how can they guarantee to you that the tenant WILL pay or that the tenant will be a "good tenant".

At the end of the day it is unfortunately not the estate agents's fault that the tenant defaulted under the lease. They should have diarised the monthly payment and followed up with the tenant regarding the non-payment, but there is only so much that they can do.

If you gave the estate agents a firm instruction to cancel the lease (on your behalf) and to seek the ejectment of the tenant from the property, they should have either done so or referred the matter to an attorney for them to do so on your behalf.

Again, the 10% that these management companies is making does not really cover the costs of a "default tenant". It can't. It only really covers the costs of drafting the lease, basic looking after the property, and reporting to you. Everything else comes at a "cost" to these management companies. It is for this reason that they don't take firm, proactive steps in dealing with a default tenant. What they will do is to give you advice on how you should proceed moving forwards. e.g. hire an attorney.

The key to your case is proving WHAT obligations the estate agents actually has in this matter. What did they say they would do for you? What obligation was breached?

To me, it sounds as if the estate agents could possibly be liable because you gave them a firm instruction and they ignored you. That would make them liable for damages.

The outstanding rental should be included in the damages because it is an actual loss suffered by you as the landlord, so to would the costs to repair the property be included.

But I'm less convinced about the flight cost. I don't think that you will be able to recover that from the estate agents or the tenant. There just isn't scope for that in the lease agreement (I don't think) and there probably isn't in the management agreement either.

My advice to you would be to hire an attorney to issue a summons against the tenant (as the first defendant) and against the estate agents (as the second defendant) and sue them (jointly and severally) for the outstanding rental and damages suffered. If you can't get the first defendant because they have no money, you've got the estate agents on the hook as well.

You'd need to issue a summons because there might be a dispute of fact and you'd need to lead witnesses in the box to testify as to what actually happened. You could also subpoena the estate agents to testify.

I can't refer you to a specific attorney, but I can direct you to www.southafricanlawyer.co.za, where you can find a list of qualified attorneys in your area who will be able to assist you further!  There is a section which lists attorneys who deal with landlord / tenant disputes: Find a Law Firm specialising in Leases

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.

Att. Patrick

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