A reader who rents out a granny flat wants to know if he is obliged to refund the tenant part of his deposit after he was retrenched and could no longer afford the rental.
He is ready to vacate the flat as early as possible and, with a potential new tenant in the wings, he has requested a pro rata refund.
The flat is on the property adjacent to the main dwelling and the tenant recently renewed his lease agreement.
The reader’s daughter, who previously occupied the flat, has moved back home and there is talk of her using the flat when the current tenant’s lease expires.
See the reader’s question here.
After his retrenchment, the tenant asked if the reader would agree to release him from the renewed lease and suggested that his deposit be used in lieu of the last month’s rental.
As the daughter is possibly available to take over the flat and the lease, the reader agreed and prepared a short written agreement to this effect.
However, the tenant has now requested a pro rata refund of his deposit as he believes the daughter will take over the lease as soon as he leaves. It seems he wants to use the refund as a deposit or rental for his new accommodation.
But the daughter has no intention of moving into the flat immediately after the tenant moves out. For various reasons she will only take occupation approximately two weeks after the tenant’s intended date of vacation.
The tenant is fairly lucky in this instance, considering that his lease was still to run for many months.
The landlord was not obliged to agree to early vacation of the flat and, arguably, should not have agreed to use the deposit as the rental for the last month of occupation.
The deposit is important to hold for the intended purpose of repairing claimable damage caused by a tenant after he has vacated the rented premises.
If claimable damage is discovered following the tenant’s vacation, it may be difficult to successfully claim for damages, particularly considering that the tenant’s financial position may not allow for payment.
Another possible scenario is one where the tenant is asked to move by our reader to allow the flat to be available for his daughter.
In that case, the landlord could have been on the receiving end of some manipulation with a view to securing early vacation of the flat.
However, in this instance and having already granted the tenant the concession of early vacation, and with the flat potentially standing empty before the daughter takes occupation, there is no real justification to agree to a refund of the pro rata rental.
This would place the reader in a poorer financial position.
It is fortuitous for the tenant that someone is so readily available, thus limiting the usual potential financial consequences of premature cancellation of a lease.
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