THOUSANDS of tenants across the country will heave a sigh of relief after the Supreme Court yesterday ruled that it is illegal for landlords to charge rent deposit, goodwill or any other non-refundable amounts on any rented premises.
The ruling could open a Pandora’s box as property owners were cashing in on lodgers by charging non-refundable deposits when letting out residential or commercial property.
But, Judge of Appeal Justice Bharat Patel yesterday ruled: “It is illegal to charge any deposits or other fee which is non-refundable apart from rent itself and this is inclusive of charging goodwill. Requesting tenants for such payments is prohibited and criminalised by the law.”
Justice Patel said such charges were in violation of section 19 of the Commercial Premises Rent Regulations of 1983.
The ruling followed an appeal by Harare businessman Jerome Ndubuisi Okeke, popularly known by most tenants in Harare as “Chief Okeke”, who wanted the Supreme Court to set aside a January 11 2012 High Court order compelling him to refund his tenant’s deposit.
Okeke — through his firm Goodliving Real Estate, cited as the first applicant in the matter — had challenged Justice Susan Mavangira’s judgment which had ordered him to refund defendant Lin Zhongmin’s $10 000 rent deposit.
The court heard that Lin had paid $10 000 in March 2010 as deposit part payment towards a commitment fee of $35 000 for renting Okeke’s shop located at number 151 Mbuya Nehanda Street.
“It is a unanimous decision of this court that the appeal is devoid of merit and is hereby dismissed with costs,” Justice Vernanda Ziyambi said sitting with Justices Patel and Paddington Garwe.
In his application before the High Court, Lin told Justice Mavangira that before paying the outstanding $25 000 to Okeke and his firm, he discovered that the representations made by Okeke were false and thus did not eventually enter into the envisaged lease agreement for the premises.
Justice Mavangira, however, ruled in Lin’s favour and ordered Okeke to refund the prospective tenant.
However, the decision did not go down well with Okeke and the estate agent, prompting them to file an appeal at the Supreme Court.
Part of Justice Mavangira’s judgment read: “The plaintiff (Lin) parted with his money for no corresponding value from the defendants (Okeke and his firm) as the lease agreement did not materialise for reasons not attributed to the plaintiff. The enrichment was thus unjustified.”
Lin was represented by Chenai Gumiro, while Okeke and his firm were represented by Advocate Lewis Uriri.