Renting? No law allows additional monthly admin fees, says expert

A Cape Town couple renewing their lease was startled to find a new R50 monthly 'admin fee' added by their letting agent; a charge they suspected was unlawful.

"There are so many legitimate fees that cause people pain. As we know, finding decent rental accommodation in Cape Town is an extreme sport these days. So, some of them are annoying but justifiable, and some aren't," says consumer journalist Wendy Knowler.

She warns that seemingly small add-ons can quickly become significant.

Rental law specialist Marlon Shevelew confirms that no legislation allows an agent to impose an additional monthly admin fee on tenants.

"The long and short is that the legal relationship is between the rental property practitioner and the landlord. The landlord pays the rental property practitioner to either procure and manage or just procure or just manage. So, the fees paid or paid by the landlord, there is nothing in any legislation that I've been aware of in the last three decades that allows for these kinds of nominal, arbitrary fees to be added simply to a lease agreement because the lease agreement is between the landlord and the tenant.

“How can any agent actually bestow upon themselves a fee of any kind without being a party to the lease agreement? That's the first question. The landlord pays the rental property practitioner; invariably, a portion between 8% and 12% is deducted from the monthly rental and paid to the agent. That is their commission. There are legitimate fees, but that R50 fee for a rental property practitioner doing their job on behalf of the landlord being attributed to a tenant is really nonsensical in my view."

Shevelew describes the practice as part of a broader 'fee creep' in the rental sector, where agents insert opportunistic charges that tenants often feel too fearful to challenge.

He advises that renters who don’t want to jeopardise their tenancy may pay such fees 'under protest' and later seek reimbursement through the Rental Housing Tribunal.

Shevelew adds that penalising a tenant for challenging an unlawful fee could amount to an unfair practice or even extortion.

To listen to Knowler and Shevelew in conversation with CapeTalk's Pippa Hudson, click below: