Property Rentals- Setting the record straight about demands, cancellations and summonses in SA law |#eBizInsights / #eBizProperty | Marlon Shevelew

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There is nothing in the Rental Housing Act or the Consumer Protection Act which obliges you, as a landlord/rental agent, to wait 20 business days for payment of rental, nor is there any law which allows a tenant up until the seventh of a month to pay rental. rental-sign

This common law (grace period) is a misconception and I assume it is based on the difference between payments made in advance or in arrears. (The old rent control schemes used to have a provision allowing the tenant until the 7th to pay – this is no longer applicable anywhere).
Rental is paid in advance and utilities, because they are received after the usage month and are presented to a tenant at month end for payment, is often in arrears and the tenant is usually provided a few days to pay.

If the lease says rent must be paid, or paid and cleared, by the first of the month then that is what is required of the tenant. A clause that utilities are payable upon presentation by the landlord is also a must!

Marlon Shevelew

Marlon Shevelew

Many agents send reminder sms messages, emails, or a make a phone call if payment is not made by the first- that is fine, but what is absolutely vital is that you stick to the legal path best as you can and continue to hold the tenant to the terms of the lease agreement that he signed.

On that note, make sure that the communications you send to the tenant are provided for in the lease .i.e., have a clause which allows for emails, sms messages and phone calls BUT, when it comes to demand and cancellation, proper formal notice which is sent by registered post is a must as this is the easiest and more evidentiary manner to prove that a letter of demand or cancellation was sent- even if your lease agreement provides otherwise.

Demand for rental
Let’s assume that rent is due and is too clear in your bank account by the 1st of a month and that there are no public holidays in this month.
If rent is not in your bank account by end of day 1, a letter of demand can be sent on day 2.
This letter can provide 7 calendar days for the tenant to pay his rental; and failing payment, summons can be prepared and issued on day 8, and served on day 9.

The tenant will have a guaranteed 10 business days from date of receipt of the summons to pay the rental in terms of the summons plus, at best, the costs of the summons which will almost always be less then what your attorney has charged you to prepare the summons.

Cancellation of Lease
A cancellation of the lease because the tenant has not paid his rental, is a different kettle of fish.
The Consumer Protection Act in section 14(2) (ii) states that if a consumer agreement is for a fixed term (a lease) – “the supplier (Landlord) may cancel the agreement (lease) 20 business days after giving written notice to the consumer (tenant)of a material failure by the consumer (tenant)to comply with the agreement(lease), unless the consumer (tenant)has rectified the failure(breach)within that time”.

This does not mean that you need to wait 20 business days for payment, nor does it preclude you from issuing summons for arrear rental on day 8 (as above). What it simply means is that you cannot cancel the lease until 20 business days have passed from date written notice has been sent telling the tenant to pay his arrear rental.

On business day 21 you can write a letter cancelling the lease and can tell the occupier to vacate the property. (There is no law as to what period of time you need to give an occupier to vacate- but be reasonable for obvious reasons).

From that day the tenant is no longer a tenant, he is an unlawful occupier. He can no longer pay rental, only a damages amount for his “unlawful occupation”.

Assuming that you issued your summons for arrear rental, and he has not paid and you have now cancelled the lease (as above) and he has remained, you will actually need to issue a new summons for the damages you have suffered by his unlawful occupation, not to mention an eviction application.

Assuming you decided not to issue summons on day 8 and decided to wait until day 20 for the tenant to pay his arrear rental, and he didn’t, you could actually cancel the lease, tell him to leave and issue only one summons for arrear rental (claim A) and damages (claim B) for his unlawful occupation from the date you cancelled his lease until the date he vacates (you need to insert this wording in your summons as you don’t actually know when he will leave).

You could also blacklist the occupier in terms of Regulation 19(4) of the National Credit Act at the exact same time as you cancel the lease so long as you have given 20 business day notice of your intention to do so.

Please don’t forget that a lease that is cancelled can’t magically revive. If day 20 has come and no rental is received and should you decide to cancel the tenant’s lease, make sure you have a mandate to do so.

If the occupier from day 21 onwards decides to pay up all that is owing, this does not allow him a right to continue occupying the property, nor does it give him a tacit or implicit lease. All it does is prevent legal action, for a while. The occupier must still leave as stated in the letter of cancellation.

http://www.marlonshevelew.co.za/index.html

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About Marlon Shevelew;
o Director of Marlon Shevelew and Associates Inc, the Top Rental Property Law Firm in South Africa receiving over 28 international accolades from 10 international publications;
o Previous author of the TPN Residential Leasepack;
o Current author of PayProp’s rental documentation and PayProp’s preferred rental property attorney;
o Preferred attorney to IEASA South Africa;
o Preferred attorney to the Rental Housing Tribunal (Western Cape)
o Owner and legal advisor to the Rental Retainer Club (Pty) Ltd – https://www.facebook.com/RentalRetainerClub
o Owner and legal advisor to RentDoc (Pty) Ltd – https://www.facebook.com/RentDoc

BizWires-on-BizRadio-600x250Marlon Shevelew  in conversation with eBizRadio’s Nick von Stein

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eBizRadio is a live multi- platformed social media service providing an online forum to the business community for holding conversations on the key issues related to specific businesses as well as availing a space for cross-business collaboration in response to key issues affecting the world of business. The place to go if you want to know about business and lifestyle

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