Pic Credit: Faye du Preez
Faye du Preez
That is the question… One of the most common questions bouncing around the real estate sector today is if, and when, the landlord can evict a non-paying tenant — an all too familiar scenario in these times.
In the current situation, if the parties cannot agree, for whatever reason, not to use the deposit in lieu of rent (although suggested by many agencies and attorneys in South Africa), and the tenant cannot fulfil their rental obligations — what happens now? Many landlords have turned to their managing agent and attorneys to seek cancellation of the lease agreement(s), and issue eviction notices with a view to start proceedings.
What is the current law on cancellation of lease agreements?
First, we must cover the terms of the Rental Housing Act concerning this, and found explicitly in Section 4(5)©: “The landlord’s rights against the tenant include his right to terminate the lease in respect of rental housing property on grounds that do not constitute an unfair practice and are specified in the lease.”
The definition of “unfair practice” is:
(a) any act or omission by a landlord or tenant in contravention of this Act; or
(b) a practice prescribed (by regulation by the Member of Executive Council (MEC), by notice in the Gazette) as a practice unreasonably prejudicing the rights or interests of a tenant or a landlord.
We currently only have draft procedural and unfair practice regulations, but both Gauteng and the Western Cape have Unfair Practices Regulations which provides that the landlord may not:
- intimidate, discriminate or retaliate against a tenant for exercising any right under the Act, these regulations or any other law;
- engage in oppressive or unconscionable conduct towards a tenant (and vice versa);
- induce a tenant to waive his rights under the Act, regulations or any other law…. and a tenant may not induce a landlord to waive his rights under the Act, regulations or any other law
So, to what does this all translate? The landlord has the right to terminate the lease if the tenant is in breach of the contract, and as long as the landlord’s conduct does not constitute unfair practice. So what would, in all likelihood under the current circumstances be considered to be an unfair practice?
Courts will want to see if ‘ubuntu’ was applied
Across the world, different countries have decided to halt the eviction process, even after lockdown. Allowing vulnerable, out-of-work tenants a few weeks / months of breathing space to earn enough to reimburse some or all their rental debt.
South Africa, as not only a third world country, but one with millions already living on the breadline with poverty knocking daily at the door, could (should?) be first in line for such relief.
A prominent property lawyer Cilna Steyn, has already mentioned that she expects courts will look to see if the concept of “ubuntu” — humanity towards others — has been applied. To show whether landlords and tenants have unified in a concerted effort to help find a working solution for both. This is in line with the principle established in the Constitutional Court decision of Barkhuizen vs Napier (2007) on whether a contractual term is against public policy. The court held that notions of fairness, justice and equity, and reasonableness cannot be separated from public policy. Public policy takes into account the necessity to do simple justice between individuals and is informed by the concept of ubuntu.
Has the landlord tried to come to some agreement with his tenant or only sent out letters of demands for payment? Has he engaged in conversation with his tenant to discuss a way forward in this legal quagmire that could suit them both? Has any effort at all been expended to keep a good tenant, with a good track record of past payments? Or has he simply asked for his rent (especially if the tenant under force majeure due to Covid19 has no possibility of paying) and jumped to start the eviction?
Read more about force majeure in rental matters here.
It currently stands that there are no evictions to occur for the entire duration of Level 4 (no moving of residences, especially into a new property, unless it is to return to the principal residence from elsewhere). A welcome, and necessary directive for the third of South Africans who didn’t manage to cover their rent in April (according to TPN credit bureau), and more than likely, won’t be able to pay at the end of May either.
However, granting of eviction orders will be allowed as the courts are currently open, but the order of eviction is stayed and suspended until the last day of Level 4 (unless otherwise decided by the courts). Some believe that this will continue until Level 2 minimum, following the return of estate agents to the market — which could be weeks maybe months away. But nothing is sure.
What is certain, that although a landlord may hold a solid and valid lease, the idea of an easy eviction, if countered, may not be as straightforward as believed. Following past case law on situations that are “just and equitable”, it is seen that the entire circumstances culminating in the tenant’s inability to pay rent will be taken into consideration.
Our Constitution requires that an eviction order be granted only after considering all the relevant circumstances. A tribunal’s determination that the landlord’s termination of the tenants’ leases was an unfair practice would be most pertinent to that.
Also, courts are obliged to probe and investigate the surrounding circumstances when an eviction from a home is sought. Particularly true when the prospective evictee is vulnerable.
It follows that where it is unjust or inequitable to evict, the unlawful occupiers have a defence and the eviction may not be ordered automatically. A defence directly concerning the justice and equity of an eviction, not necessarily the lawfulness of occupation, must be taken into account when considering all relevant circumstances.
In short, to evict or not to evict is a reasonably complex decision that each landlord must make, but only after taking into account the exact terms of the lease agreement, all relevant circumstances (both concerning the landlord and tenant) and whether his actions are in accordance with the myriad of legal principles governing this.
Sometimes the best advice is the simplest — landlords, don’t cut your nose off to spite your face, and tenants don’t hide behind the current COVID-19 pandemic to shirt your responsibilities. We are in uncharted waters, and the outcomes are not a given.
About the author: Faye du Preez has been a real estate agent in five countries over her 20 year career span of property. After working for three of the major real estate companies in South Africa for the last 10 years, she finally decided to set up her own agency after completing a Masters in Property Development. Faye is proud that after the last 12 months of many happy referrals, The Cape Town Real Estate Company is entering into its second successful year of existence.