February 26, 2019
February 26, 2019
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The rental market

There is an ever-increasing demand for rental properties (compared to the ownership of housing) across the country driven in the main by affordability issues amongst South Africans and low levels of confidence in the economy.

The rental trend in the Western Cape is unique. The province is experiencing what property analysts refer to a “semigatory” influx of people from other provinces which have resulted in increased demand for rental properties and consequently higher rentals.

As the Constitution of the Republic of South Africa offers increased protection to legal (as well as illegal) occupiers of property it is important for lessors and owners of properties to be aware of the procedures that must be followed in the lawful removal of a tenant from rental property.

The Constitution

The Constitution of the Republic of South Africa provides that “no one may be evicted from their home, or have their home demolished, without an order of court made after considering all the relevant circumstances.” This effectively means that without an eviction order, any attempt to dispossess a person, even an illegal occupier, from your property, would be unlawful.

In order to obtain an eviction order, the owner needs to prove that the occupants have no right to reside on the property and that the tenants are residing on the land unlawfully.

However, in order to ascertain whether tenants are in unlawful occupation of the land occupied, all lease agreements in place need to be properly cancelled in accordance with the terms of the lease agreement and relevant legislation. In the event that the lease agreement is not properly cancelled, you could potentially run the risk of not being able to obtain an eviction order or experience protracted delays.

Common mistakes

Common mistakes made in the cancellation of the lease agreement, which often result in the delay in obtaining the eviction order include: –

  1. A lease written agreement of lease

The importance of a written lease agreement cannot be overemphasized as it is the best way to ensure certainty and one of the key steps in renting a property.

  1. The Lessor’s indulgence

Granting a tenant indulgences through the empty promises that arear rental will be paid by a future date, is best avoided. During this time, the debt keeps escalating, municipal accounts come pouring in and bond payments are due. The eviction process in itself is not the speediest of remedies and it takes time. By granting your tenant indulgences, prolongs you in evicting your tenants speedily.

  1. The Consumer Protection Act (“CPA”) and your lease agreement

The first point of reference here would be to ascertain whether Section 14 of the CPA applies to the lease agreement. No matter what the lease agreement says, legislation like the CPA will trump any clause if it is not in line with that legislation.

Section 14 of the CPA will be applicable in cancelling a lease agreement in the following circumstances:

  1. Both landlord and tenant are not juristic persons. The CPA defines a “juristic persons” as a company, close corporation, trust or partnership; and
  2. The fixed term of the lease agreement is still in operation.

In cases where the lease agreement is subject to Section 14 of the CPA, the landlord has to provide the tenant with a letter of demand, allowing the tenant 20 business days in which to effect payment of the rental. If the tenant fails to remedy his breach, the landlord may cancel the lease agreement on or after the 21st business day by sending a cancellation letter.

  1. When the CPA is not applicable

In the event that Section 14 of the CPA does not apply, the landlord needs to rely on the breach clause in terms of the lease agreement to ascertain how the lease agreement is to be cancelled. This would be the case where one of the parties is a juristic person i.e. a company, or when the fixed term of the lease period has expired.

  1. Delivery of the Letter of Demand

The domicilium citandi et executandi (chosen address) clause of the lease agreement will set out how and where any notices, including any letters of demand and cancellation letters, must be sent. If these notices are not delivered correctly they may be deemed to be invalid and the tenant could possibly deny ever receiving them, or be found by a court not to have received proper notice while the eviction application is underway.

Older lease agreements sometimes require the notices to be sent by post or registered mail and if so required, even as antiquated as it may seem, they need to be sent by such methods.

When in doubt, the authors suggest the notices be hand delivered to the property and dispatched by email as well. For hand delivery, the letter merely needs to be slipped under the door or attached to the gate, not actually handed to the occupant personally, in order to be considered proper service of the notice. However, if no one has signed for it, it is best to make a service affidavit immediately after delivery, to keep for purposes of proof in court in case you need it later.

  1. The content of the letter of demand and cancellation letter

The wording of the letters is extremely important. For example, if the content of the letter of demand is vague and does not address any consequences that may follow it may be considered to be insufficient. The letter of demand needs to specify the exact amount due, the amount of time allotted in which the tenant is to effect payment as well as clearly indicate that for example upon non-payment, the lease agreement may be cancelled, the tenant may be blacklisted, and/or the tenant may be sued for arrears and/or damages. The letter of demand also needs to be addressed to each and every lessee.

The cancellation letter on the other hand specifically needs to confirm that the lease agreement is cancelled and demand that the occupants vacate the property. You may also indicate that in the event that the occupant fails to vacate the property, eviction proceedings may commence. It is within the court’s discretion upon the granting of the eviction to provide the tenant with more time in which to vacate the property. Usually, in our experience, the occupants are afforded about a month in which to vacate the property. Again, it should be remembered that the cancellation letter also needs to be addressed to all the lessees listed on the lease agreement.

  1. Seek Legal Representation

As soon as the lease agreement is cancelled, the landlord should immediately seek legal representation. All correspondence should immediately cease, and any communication should only be handled by the attorney. This is imperative as any correspondence (including possible settlement negotiations) can be seriously detrimental to the eviction application no matter how seemingly insignificant. For example, by the landlord sending invoices and demanding “rental” after cancellation, the landlord may tacitly reinstate the lease agreement after the cancellation. At that point, the process may have to start from the beginning again.

In conclusion, this area of law is fraught with technicality and it is always best to consult an expert on these issues because the consequences of the delay that might occur if one makes critical errors, are detrimental.

Having regard to the fact that everything you do with respect to renting your property should be aimed at maximizing the amount of income the property will generate, it is surprising that many lessors do not take the necessary steps to safeguard their interests.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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