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Tuesday Mar 04, 2014

How to deal with delinquent tenants

Tenants are protected by the Prevention of Illegal Eviction from Unlawful Occupation of Land Act, No. 19 of 1998, also known as the PIE Act. This act applies to the occupation of residential property.

The purpose of the Act is to ensure that tenants are protected from any unlawful evictions. This however does not mean that they can't be evicted; it simply means that the correct procedures must be followed by the landlord or managing agent, says Adrian Goslett, CEO of RE/MAX of Southern Africa.

'It is important for any landlord or investor with a rental portfolio to familiarise themselves with the PIE Act and the various procedures it lays out for lawfully dealing with delinquent tenants. Although the act was created with the tenant's protection in mind, it does not discriminate against landlords. It merely ensures that the eviction process is followed in the correct manner according to legislation and that tenants are treated with respect,' says Goslett.

According to the PIE Act, in order to lawfully evict a tenant, landlords will have to adhere to the following process:

Belinda Lewis, Property Law Director at STBB Smith Tabata Buchanan Boyes Attorneys, says that if by failing to pay the agreed rental amount, the tenant has breached the lease agreement and the initial step would be for the landlord to send notice to the tenant informing him of such breach, referring specifically to the breach clause stated in the agreement. 'It is for this reason that landlords must ensure that their lease agreements meet all legal criteria and include the necessary clauses providing them with protection. The more detailed the lease agreement, the better for both parties,' advises Goslett.

Lewis notes that it is crucial that the lease agreement also falls in line with the Consumer Protection Act (CPA) in that, regardless of the time period stipulated by the breach clause, the landlord is required by the CPA to give at least 20 business days notice to the tenant to rectify the breach before the agreement is cancelled, provided the tenant does not remedy the breach within the given time frame.

If the notice period lapses without the tenant making any payment, the landlord may choose to proceed to issue a summons with an automatic rent interdict. In some cases the landlord may be able to recover the legal costs for the process, although this would only be if the lease agreement makes provision for this. If the tenant still does not make payment after the summons has been issued, the landlord is within his rights to cancel the lease agreement.

Essentially, the tenant will no longer fall under the protection of the agreement and will be regarded as an illegal occupier of the property and can therefore be evicted in terms of the PIE Act. In fact, the landlord can actually initiate the summons proceedings for outstanding rent and the eviction proceedings simultaneously, provided the lease has been properly cancelled.

Lewis advises that there are a few elements for landlords to consider when applying for an illegal occupier to be evicted from his property.

Firstly, the application must be made to either a Magistrate's court or the High Court. She notes that, provided the application is not opposed, it can take from eight to ten weeks for the eviction order to be granted. While the eviction order may be granted on the date of the hearing, it is common practice in South Africa to provide the tenant with at least a month to find other accommodation.

Only then will the sheriff be lawfully entitled to proceed with evicting the tenant. There is also the question of cost. The cost may vary depending on the sheriff's fees and whether the matter is opposed or not. An unopposed eviction could cost between R6 000 and R8 000 in legal costs plus disbursements, while the cost of an opposed matter will be substantially more.

'Taking the right precautionary measures from day one is imperative for landlords. Seeking the advice of a reputable property management agent or attorney when entering into a lease agreement will also ensure that the landlord avoids unnecessary situations with their tenants and enjoys maximum protection,' Goslett concludes.

RE/MAX Press Release


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