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South African Landlords Fall Under Debt Collection Act

South African landlords who collect rent arrears have now been placed under the scope of the Debt Collectors Act, according to property management group Trafalgar.

Managing Director of Trafalgar, Andrews Schaefar, said “Landlords battling with late-paying tenants and bodies corporate struggling to retrieve levies can now welcome two recent landmark decisions by the Council for Debt Collectors that clearly rule property managers collecting arrears levies and rentals fall within the scope of the Debt Collectors Act.”

Under the new rulings, all estate agents and property managers who collect rental arrears and levies must be registered with the Council for Debt Collector. This will help regulate any unscrupulous behaviour that may have entered the South African debt collection industry.

“The move has highlighted compliance with the Council for Debt Collectors and associated legislation as being necessary for compliance and transparency,” continued Richard Schaefar.

As a direct result, this move should encourage debtors to improve their individual situation in order to avoid these enforceable penalties.

Schaefer said the Council for Debt Collectors was established to bring clarity to a previously unregulated industry following numerous public complaints laid with the department of justice against debt collectors.

“The Debt Collectors Act provides control over debt collectors and legalises the South African collection system by monitoring their conduct and professionalism and thus promoting a culture of good governance.”

Schaefer said the act worked both ways.

“Tenants who believe they are receiving unfair bias can lay a complaint with the Council and both sides will be heard before a judgment is passed.”

Mr Schaefar then added that a recent decision by the Durban High Court to exclude levies from the National Credit Act debt counselling process was also good news for estate agents and property managers.

“That decision means companies such as Trafalgar do not have to refer to debt counsellors when seeking levies due from owners – and correspondingly that errant owners cannot hide behind debt counselling as an excuse for not paying their bodies corporate levies.”