Rent relief for tenants

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.

CHARLES LAITON

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.

12 Comments

  1. It has been the norm to charge a refundable deposit to safeguard the well being of the property. In the event of damages to the property by the tenant the deposit will be used to make good the damage. If tenant leaves the property in good state then the deposit was paid back. The issue of a non refundable deposit is greediness and unprofessional. Those who do not want to pay deposit but without houses motonogara kumusha kana kuti kuimba dzaPatel wacho because kwangu munobhadhara refundable deposit.

    1. Kikiki taura zvako Maronja anouraya property most of the time ..but refund were necessary .

  2. Residential Rental deposits must be paid as it is necessary to cover any unpaid bills, repairs and maintanence or final months rent not submitted by the tenant. This helps the landlord so that they don’t have to cover any expenses occurred by the tenant when they leave. If there are no such outstanding expenses, then the tenant is reimbursed. A non-refundable deposit is something else completely different and often abused

  3. Property owners should be protected from dodgy and crooked would-be tenants whose intentions were to leave without having looked after the property. In most countries most, including Australia, a minimum of a month’s rent is required as security deposit to cover any damages. If the tenant has not damaged the property he/she/company will be refunded in full. Deduction for damages on the property. Judge Patel’s judgement is flawed and will leave at the mercy of ruthless tenants. It is my suggestion that all east agents and private property should meet to discuss this lopsided ruling. The Patel judgement will benefit the dodgy and crooked tenants.

    1. but mind you the ternants are mostly at the recieving end. its more like an employer employee relationship where the pieces of legislation seem to overprotect the employeee. i am not saying there are no rogue ternants but its just a few. most landlords are the ones who are disastrous. i rented a certain house for 6 months when i paved way for my place to be renovated. Guys mamwe maroja ari patyt. i dont have a ternant pamba pangu though but what i came across was just something else. on the issue of Deposit, it should be agreed between the ternant and the landlord not mandatory. what this shows is that you cant (at law) take up your ternant to the courts on the deposit issue. its ILLEGAL!!! Landlords out there lets be guided accordingly. agree with your ternant to an arrangement of deposit (refundable or whatever ) but know well that its NOT LEGAL

  4. Jamengweni Godonga

    I sincerely hope that I am not reading the ruling out of anger. I have tenants who have left my prioperties in bad shape with unpaid ZETDC and local authority bills. Trying to find these tenants once they have absconded is a huge mission with the corrupt debt collectors, the landlord stands to loose.
    Tenants trash the buildings, I wonder why?
    I guess a lwayer landlord will read this judgement and make it easy for us to understand.

  5. Why kuroja in i hev got 2 houses in harare 1 in bulawayo 1 pachivhu,plus paruzevha ndinemusha pagutu pazvavahera apa usimbe ndihwo hunonetsa vazhinji,ini ndakapinda mubulawayo ndisina chinhu,asi thru kushanda nesimba nhasi ndigere ukandiona ndichifamba netsoka undibvunze

  6. Deposits are and have always been refundable.Everywhere if you want to rent a property you pay a refundable deposit.Yenyu iyi maZimbo yekusada ku-refunder ndiyo isiri pamutemo.

  7. Saka pamwe minyama yedu isu vamwe yekusangana nama Landlord who will get up to ingenious tricks to hold onto your deposit even when you have looked after their property like your own. Its hard to believe there exist landlords that refund deposits and not cringe while doing it, I have yet to see one.

  8. I am not a lawyer but even I can tell that the ruling relates to non refundable deposits and so called goodwill that was being levied by some unscrupulous landlords. You can still collect security deposits which are refundable as long as you make it clear that they are refundable on condition that the property is in good order. Lets learn to take things in context.

    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.”

    Key words being “non-refundable”!

  9. Student@Law: Joe Nkiwane

    @Chokwadi & Jamengweni. Go back and read the last paragraph. The Justices reason for judgement (ratio decidendi) is premised on the principle of unjust enrichment. At common law one person cannot enrich themselves at the expense of another for no corresponding benefit to the counter-party. The prospective tenant could not occupy the property for reasons which probably of the landlords making. So the landlord cannot enjoy the use of his property while and keep the purported “deposit”. this is a separate issue from a refundable deposit

  10. this judgement does not ina any way bar prperty owners for asking for a deposit. The scenario will remain the same where tenants have to pay a deposit which have been always refundable if the tenant complies with the conditions for its refund. The heading is misleading. Tenants beware mungatofunga kuda kuoma musoro! Be humble!

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