How to handle defaulting tenants

Some landlords may have tenants who can no longer pay their monthly rent. However, you can’t simply evict tenants as they are protected by the Prevention of Illegal Eviction from Unlawful Occupation of Land Act, also known as the PIE Act,” says Adrian Goslett, regional director and chief executive of RE/MAX of Southern Africa.

“Essentially the act applies to the occupation of premises which constitute a dwelling, which in the case of a landlord and tenant relationship would be the residential property in an urban area. The act was introduced to ensure that tenants are protected from being unlawfully evicted. However, this does not mean tenants cannot be evicted – merely that the correct procedure needs to be adhered to during the process.”

Goslett says landlords need to familiarise themselves with the PIE Act, along with the numerous procedures it advocates for the lawful dealing of defaulting tenants.

“Although the act was created with the protection of tenants in mind, it is not prejudiced against landlords, but ensures that the eviction process is followed in the correct manner according to legislation and that tenants are treated with respect,” he says.

To lawfully evict tenants, landlords must adhere to the following process:

If tenants have breached the lease agreement by failing to pay the agreed rental amount, the initial step would be to send notice to the tenants informing them of such breach, referring specifically to the breach clause stated in the agreement.

“This emphasises the importance of ensuring that all lease agreements with tenants meet legislative requirements and include the necessary clauses providing them with protection. The more detailed the lease agreement, the better for both parties,” says Goslett.

“The lease agreement must also be in line with the Consumer Protection Act (CPA) in that, regardless of the period stipulated by the breach clause, the landlord is required by the CPA to give notice of at least a 20 business days to allow tenants to rectify the breach before the agreement is cancelled. This is provided the tenants don’t remedy the breach within the given timeframe.”

Once the notice period has lapsed without the situation being rectified, the landlord needs to decide whether to proceed with a summons with an automatic rent interdict or immediate cancellation of the agreement.

“In certain instances landlords might be able to recover their legal costs for the process, although this is only possible if the lease agreement makes provision for this.

“If after the summons the tenants have still not made any attempt to pay the outstanding rental amount, landlords are within their rights to cancel the lease agreement. If the agreement is cancelled the tenants will no longer fall under its protection and will be regarded as illegal occupiers of the property. In terms of the PIE Act, the landlord will then be able to legally evict the tenant,” says Goslett.

He says that provided the lease has been cancelled, the landlord can initiate the summons proceedings for outstanding rent and the eviction proceedings simultaneously.

The application for eviction must be made to either a magistrate’s court or a high court. Goslett says that if the application is unopposed; it can take at least eight to 10 weeks for the eviction order to be granted. Even if the eviction order is granted on the date of the hearing, it is common practice in South Africa to provide the tenants with at least another 14 days to find other accommodation before the eviction order is executed. After this period the sheriff will be lawfully entitled to proceed with evicting the tenants.

Cost is another important consideration to take into account. The costs may vary depending on the sheriff’s fees and whether the matter is opposed or not. An unopposed eviction could cost between R12 000 and R20 000 in legal costs plus disbursements, whereas the cost of an opposed matter will be substantially more.

“It is essential for landlords to take the necessary precautions from the start to ensure they are protected by the law. Seeking the advice of a reputable property management agent or attorney when entering into a lease agreement will help landlords avoid unnecessary situations with their tenants and enjoy maximum protection,” Goslett says.

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