Real Estate Investor Magazine South Africa July 2014 | Page 33

LEGAL UPDATE

BY PHOEBE WALTON

Landlord income to be declared
SARS’ IT3(b) notice which compels agents to submit details for all interest earned by tenants, as well as all
income generated by landlords as a result of renting out a property has now come into effect. PayProp notes that it
essentially requires all agents to be able to show, per landlord, per month, the detailed breakdown of income and
expenses, a requirement the average agency find difficult to comply with.
Landlords may not fully understand the implications. Payprop explains that, in practice, if an estate agent
manages to submit the details correctly, then the landlord will see his earnings from his property investments
already listed on his tax return. If he had incurred expenses that the estate agent does not know about, then he
should record the expenses on his tax return and be able to justify those, should SARS request such justification.
A further possible unintended consequence could be that landlords who have not been declaring their income will
now abandon the use of agents because their income stream is becoming visible to the receiver.

Rental Housing Amendment Bill
Hogan Lovells notes that the proposed Rental Housing Amendment Bill has significant improvements to assist
landlords and, likewise, tenants. Among the various amendments, the noteworthy changes are includes that leases
must be put in writing and that the onus to do so will be on the landlord. There are also the addition of certain
rights and obligations for both tenants and landlords.
Tenants
• The right to request written receipts including dates, the period for which payment was made, and address or
description of the property, whether for rental, arrear rental, deposit payment or otherwise.
• The right to request written proof of interest accrued on the deposit paid.
• The right to privacy, which includes the right not to have the property searched or seized without a ruling by a
court or tribunal.
• The right not to have communications infringed.
• Costs not included in the lease agreement can only be deducted upon proof of such expenditure.
• Consent to sub-let may not be unreasonably withheld.
Landlords
• The deposit received from a tenant is to be invested in an interest bearing account with a financial institution at
an interest rate not less than that on a savings account.
• Various time frames have been set out that must be adhered to by the landlord relating to inspection of a
property and/or refunding of deposits.

Home Owners Associations VAT registration
Residential home owners associations (HOAs) are now being treated the same as sectional title bodies corporate
in the eyes of SARS, with regards to VAT. Intersect Sectional