Delinquent tenant evictions still possible

The many new investors in the buy-to-rent market – and, more particularly, those investing in sectional title units – are from time to time concerned that their rights as landlords could be eroded by the more humane, democratic attitude of the courts that now prevails on property matters – particularly when those affected are previously disadvantaged people.

Those concerns, says Paddy Herbert, Marketing Director of Cape Town-based Propell Levy Finance Solutions, have in the last year been allayed by court decisions, which have in most cases re-established the basic common-law principles of property ownership.

Propell’s in-house lawyer, Simone Sulcas, recapped on the events which have led to concern about these matters.

“In 2004 the Prevention of Illegal Evictions Act (the PIE Act) was passed. This established the principle that a person who had squatted for a time (usually at least six months) on land could not be summarily thrown off simply because this did not suit the landowner.

“The eviction application had now to go to the High Court which was given the right to decide if the occupation was “just and equitable”.

“If, for example, you had built a shack in one of Cape Town’s informal settlements along the N2, the chances are you would be entitled to stay on there.

“Then, however, in September last year an Appellate Division decision appeared to extend the new squatters’ rights to tenants or bondholders who had become ‘illegal occupants’ of their premises, i.e. tenants or bondholders who through non-payment of rent or of their bonds or who, through breaking the accepted rules of the complex in which they stayed, had had their leases or bonds cancelled by their landlords or the financial institutions.”

This, said Sulcas, had caused an outcry, especially from the banks who claimed, “justifiably in my opinion,” that their only means of securing their debt, i.e. by eviction, repossession and resale of the property, was now undermined.

“The general opinion of the legal profession throughout South Africa on the matter,” said Sulcas, “was that the common-law rulings which had traditionally been applied to property had now been overruled.

“This was a serious situation but the good news is that in the intervening period common sense appears to have prevailed and a series of court cases have ensured that landlords are not left powerless. Eviction is still legally possible. Furthermore, the bill is now before Parliament which will help rectify the situation and restore the status quo because it reaffirms the principle that defaulting tenants and bondholders do not qualify as “just and equitable squatters”.”

On the whole matter of property ownership, said Sulcas, another court case had been equally groundbreaking. This, she said, was the Japhta case in October 2004. This case established the principle that “attachments”, i.e. the taking over of assets or property for unpaid debts, could no longer be achieved simply by applying to the magistrate’s court for a “rubber stamp” attachment.

“The Japhta case was particularly important because it involved an appeal by the defendant to the Constitutional Court who evoked the constitutional principle that all people are entitled to a home. If, therefore, they already own a home, the eviction from it for relatively small unpaid debts should very definitely not be allowed.”

Herbert said that the change in the courts’ attitude was important because a balance had now been struck between the rights of owners, tenants and the constitutional obligations of the State.

“It looks very much,” he said, “as if we are moving into a new era in which, as in so many other South African legal matters, South Africa is now ahead of the rest of the world in its attitude to the rights of the poor without sacrificing the interests of private enterprise.”
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