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Wednesday Oct 14, 2015

Tenant not responsible for landlord's errors

Is the tenant in breach if she refuses to pay her landlord water consumption charges billed four years after usage?

Let us take the case of a tenant who pays on the turn when her landlord presents her with the municipal bill. The landlord indicates on the municipal bill the amount she needs to pay after deducting his payment of the rates and other charges.

Four year later, the landlord realises that through a debit order with the municipality, he, in fact, paid a substantial amount towards the tenant's water consumption charges. He now threatens to cancel the lease if she fails to make the full payment.

Can the landlord cancel for breach if the tenant fails to pay the "outstanding" amount? Is it a breach?

The diligent tenant paid her rental in full and on time as she did all other charges due. She did not question the amount the landlord wrote on the municipal bill every month for four years.

A clause stating that the landlord has the right to cancel should the tenant fail to pay his or her municipal charges for the water and electricity consumption on time, affords the landlord the right to cancel. However, after four years of not once informing the tenant that she short-paid, can such a clause be invoked?

The Rental Housing Act requires that the grounds for cancellation for residential dwellings must be stipulated in the lease and may not constitute an unfair practice.

The landlord's rights against the tenant include his or her 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, (section 4(5)(c)).

The landlord would be able to cancel the lease for arrear rental or failure to pay municipal service charges through a cancellation clause. This clause allows a party to cancel immediately if the other party is in breach.

The landlord or tenant can lodge a complaint with the Rental Housing Tribunal that will have to decide whose defence is legally sustainable.

The tribunal will also have to consider the absence of a cancellation clause that ought to disqualify the landlord from cancelling in the above example.

The landlord will have to produce convincing evidence that the tenant failed to perform in terms of the lease agreement by failing to pay the water charges in full. That this failure amounted to a substantial breach of the lease agreement, and despite the demand, the tenant failed to rectify the breach.

It would be breach if the landlord sent a letter of demand after the first month that the tenant short-paid and must settle the amount immediately or within 20 days (in the case of a lease subject to the Consumer Protection Act).

In the absence of a written clause that in some way enables the landlord to claim the amount he paid unintentionally, and paid consistently for four years, the tenant may not be in breach.

Any due demand would not matter in this instance or the need to rectify the so-called breach.

Dr Sayed Iqbal Mohamed
Chairman, Organisation for Civic Rights
Tenant Matters
Daily News


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