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What to do when your tenant is in arrears


As a residential landlord, you expect to receive rent on time and in full- but how do you handle a residential tenant in arrears?


There are a few things you should know about your rights as a landlord when it comes to rent default including the process around sending a letter of demand, time periods and how to get the best outcome if you’re required to attend a tribunal or Court.

There are a few things to consider when dealing with a tenant in breach, which we deal with below.


Terms of the Lease

When a dispute or a breach occurs, we need to consider what the terms of the lease agreement stipulates. The lease agreement between landlord and tenant outlines the responsibilities and rights of both the landlord and tenant. Once the lease is signed and secured, it becomes an effective tool for regulating the relationship between the parties. The lease agreement should stipulate and guide the parties as to what should happen should the tenant be in arrears.


Most lease agreements will contain a breach of contract term. In most cases, the landlord is obliged to inform the tenant in writing of the arrear rental, and does not have the right to immediately evict the tenant, but to provide the tenant with an opportunity to remedy the breach. Through this official notice, the landlord is giving the tenant the opportunity to resolve the breach of the lease agreement.

Amongst other things, the Rental Housing Act 50 of 1999 sets out what should be contained in a lease agreement, as well as the rights and responsibilities of both parties in a landlord-tenant relationship, and also provides information on the cancellation or termination of a lease. It may not always be strictly necessary to cancel a lease with a defaulting tenant- perhaps mediation may assist the parties in resolving a dispute which arises.


Mediation

Mediation is an alternative dispute resolution option. Seek the services of a mediator or legal practitioner with expertise in alternative dispute resolution to recover such rent by way of mediation.

If you have a good tenant who, usually pays on time, keeps your rental property in good condition, and abides by every other condition listed on the lease and you wish to maintain your relationship, it might be worth having an informal mediation session to assist both parties regarding the way forward.

Despite all efforts, should the tenant not be able amenable to make the rental payments, will not vacate voluntarily, and there is no or little hope of recovery, you may need to approach a legal practitioner to assist you further.


The Rental Housing Tribunal

The main function of the Rental Housing Tribunal is to settle disputes between tenants and landlords. The Tribunal's functions include the following: to receive and investigate complaints of landlords or tenants; to resolve disputes between landlords and tenants through mediation and arbitration; and to give advice and provide education to landlords and tenants about their rights and obligations.

The Law

Commence a court action through your legal representation, to recover possession of premises (by way of an eviction application) alongside a Section 32 Application and Rent Interdict Summons which will interdict the tenant from removing any of his/her assets from the premises until the matter is finalised.

Rental agreements are governed by the law, and disputes can be resolved through the Rental Housing Tribunal or the Magistrate’s Court. As a landlord, you are afforded a level of legal protection, and although invoking these can become a tedious process, the law must be followed when dealing with a defaulting tenant.


Rental Interdict Summons

A Rent Interdict Summons interdicts the tenant from removing any of his/her assets from the premises until the matter is finalised.


Section 32 Application- Attachment Order

In terms of Section 32 of the Magistrates Court Act 32 of 1944, the landlord may apply to the Magistrates Court for the attachment and simultaneous removal of the tenant’s moveable property in security of unpaid rental. It is important however to note that the application can only be brought once the landlord has placed the tenant in default and a period of 7 (seven) days or more has lapsed.


Eviction Application

An Eviction Application may be brought of out either the Magistrate’s Court or the High Court for the tenants to be evicted from the premises. The eviction application process is governed by the Rules of the Court and the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (the “PIE Act”). The purpose of the PIE Act is on the one hand to provide for the prohibition of illegal eviction and on the other to provide procedures for the eviction of unlawful occupiers. The purpose of Act is therefore to protect both the tenant and the landlord.


Conclusion

It is advisable to carefully follow procedure, as our courts do not look favourably upon landlords who take the law into their own hands. Failure to follow the correct procedures may also result in defective processes against the tenant, and result in unnecessary delays and expenses. Spence Attorneys offers property law and litigation services in Cape Town and Johannesburg, and can assist you if you have a tenant in breach of the lease agreement. Contact us today to find out more about our services : info@spencelaw.co.za


This article is for information purposes only and should not be regarded as or substituted for legal advice. Always seek legal advice. Spence Attorneys will not be held liable for any error or omission herein. ©


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