Irresponsible Blacklisting

Posted On Monday, 31 October 2011 02:00 Published by
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Serious and costly repercussions are is store when it comes to unfair blacklisting because of landlords and property owners fail to comply with the regulations of the National Credit Act (NCA)

In a recent High Court case, a plaintiff was awarded R50 000 in damages for defamation. His reputation and ability to obtain credit were affected when he was blacklisted for a claim that was in dispute. Advised against taking unnecessary action, the lender had moved ahead and blacklisted the petitioner without informing him.

Michelle Dickens, Managing Director of TPN Credit Bureau, South Africa’s only specialist property credit bureau, and developer of the industry’s first Rental Payment Profile of its kind, says “The key point in the case mentioned above was that the plaintiff learned of his negative credit status only after being declined for an overdraft by his bank. These kinds of situations can be avoided by ensuring both landlords and tenants follow due process and err on the side of caution to forego any possible risk.”

The NCA is designed to protect consumer interests by closely regulating practices such as wrongful adverse listings by merchants such as landlords and property managers.

It is absolutely vital that landlords or property managers ensure that all required documentation is accurate, up to date and in compliance with regulations, to prevent unnecessary issues that may arise should they fail to do so.

Dickens says, “It is essential that landlords and property managers follow due process within the NCA before blacklisting tenants irresponsibly. There are a number of measures one can take when dealing with a difficult tenant.”

According to Dickens these include:

  • a letter demanding payment should be issued
  • if payment is not received, the lease can then be cancelled due to breach of contract 
  • the tenant can then be ordered to vacate the property
  • only then can the landlord can obtain a court order to legally evict the tenant from the premises

Recent TPN records show that 79% of South African tenants are listed as being in good standing with their credit bureaus. The remaining 21% of tenants are, by default, less desirable and 12% of these are non-payers.

Dickens adds that it is the responsibility of the landlord or property manager to check the credit status of any potential tenants before entering into a binding contract and putting both parties at risk. When dealing with a non-compliant tenant, blacklisting is often seen by landlords as the only option, but this execution should be seriously considered before listing a default against a person’s credit profile, as it can have a major impact on their financial future.

In order to prevent unfair adverse listings, tenants must be given at least 20 business days notice prior to the listing. TPN Credit Bureau strongly advises all landlords and property managers to ensure that they work within the law and make certain that the tenant is given proper notice.

Publisher: eProp
Source: TPN

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