In these increasingly difficult economic times, landlords (or those looking to enter the market) should carefully consider working with a managing agent.
This decision not only helps protect your property and rental income but also ensures compliance with the latest laws governing landlord-tenant relationships. Some landlords prefer using an agent only for tenant placement, while others opt for full management. Below, we address three key questions that new landlords frequently ask.
1. What can a managing agent do for me?
A managing agent ensures that landlords comply with the latest property laws, including the 2024 Rental Housing Act amendments and the updated Consumer Protection Act provisions. Their key responsibilities include:
Finding a qualified tenant – conducting rigorous credit checks, reference verification, and ensuring that the tenant meets affordability criteria.
Legal compliance – keeping landlords updated with Sectional Titles Schemes Management Act (STSMA) regulations, eviction protection laws, and Consumer Protection Act amendments that affect lease agreements.
Ongoing tenant monitoring – under the new laws, landlords must reassess a tenant’s creditworthiness annually to confirm affordability before lease renewal.
Energy efficiency compliance – with new energy efficiency mandates, properties must now adhere to minimum sustainability standards, including solar-ready infrastructure, water conservation measures, and insulation requirements.
Debt collection & legal support – new legal frameworks provide more tenant protections, making proper eviction processes essential. A managing agent can handle arrears, send legal notices, and guide landlords through lawful eviction procedures.
Tax optimization – the Section 13sex tax incentive allows deductions on new residential rental properties. A managing agent can advise on tax-efficient structuring of rental income.
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2. What fees will I have to pay?
Generally, agent fees are payable once a tenant is secured and a lease is signed. These fees can be deducted from rental income.
Tenant procurement fee – a once-off fee for sourcing a tenant, conducting credit checks, and drafting the lease agreement.
Property management fee – a monthly fee charged as a percentage of the rental amount for ongoing services like collecting rent, handling maintenance, and ensuring compliance.
If a landlord chooses not to enter a property management agreement, the agent's responsibility ends once the tenant moves in. However, with new legal requirements, including annual tenant vetting, many landlords opt for full management services to reduce risk.
3. What happens if my tenant doesn’t pay on time, or at all?
To mitigate the risk of non-payment, rental insurance is now a highly recommended option.
Rental protection insurance can cover up to three months of unpaid rent and additional costs for utilities, legal fees, and eviction proceedings.
Tenants typically pay a small monthly premium (around 10% of the rent) instead of a security deposit, making it easier to qualify for rentals.
Legal eviction processes are stricter under new laws, so having an agent to manage arrears and initiate legal steps is crucial.
