In 2002 the Supreme Court of Appeal ruled that tenants who fall behind on their rent and home owners who fail to pay their bonds now have the same protection against eviction as illegal squatters. Experts say this will result in landlords upping rentals and banks requiring larger deposits from prospective homeowners...

As a result of sluggish property prices and high demand for rental properties, many investors bought houses with the intention of renting them out. The low interest rates early this year acted as a further incentive for investors, as the rentals easily covered bond costs. Experts say a ruling of this nature acts as a disincentive for property investors and over time could result in them reducing their holdings. This could in turn cause a scarcity of suitable property for rent, and as with most commodities when they are scarce, prices increase.

As a preventative measure, landlords will have to become far more discerning in choosing their tenants and perhaps charge a two months' rental up front instead of the customary one month. This is a tall order for most tenants and it could mean that they would have to turn to credit in order to procure a rental home. Obviously this is not a good state of affairs.

Banks will also be affected and already they are under pressure to lend more money to lower income groups. However, I must say that I think the banks need to be a little less eager to evict struggling homeowners. In the past banks' policies have been inflexible and many homeowners who experienced short-term cash flow difficulties have been thrown out of their homes when a little more leniency could have meant they could have kept their homes. The loss of a home is extremely costly and some people may never be able to get back into the market.

Although the protests are loud regarding the ruling — that one must procure a court order to evict someone — it is not unreasonable. The real issue is the length of time a landlord or bank must wait for it to be processed. Our courts are slow and cumbersome and it may take many moths for a case to be heard. Experts suggest that a property court be put in place so that these cases can be handled efficiently.

If you are a landlord, check out your tenants thoroughly. Make sure they are employed, get a credit reference on them and contact their previous landlord. Set a specific date for the rentals to be paid and act immediately if there is a delay in payment.