The Lease clearly states that Rent must be paid by
Electronic Funds Transfer. The reason for this is that, in the case of cheques,
there is obviously more of a risk of the payment being delayed or the cheque
not clearing. This therefore increases the Landlord’s risk of not being paid.
In the event that a Tenant pays Rent late, the Landlord shall be entitled to
charge interest on such outstanding amounts, at the rate specified in relation
to incidental credit agreements in the National Credit Act 34 of 2005. This
rate is currently 2% (Two Percent) per month up to a total of 24% (Twenty Four
Percent) per annum – in other words, the interest is compounded interest. This
clause is important because, should it not have been included in the Lease then
the Landlord would only be able to charge interest at the rate specified in the
Prescribed Rate of Interest Act 55 of 1975. On large amounts, the difference
between 15% (Fifteen Percent) and 24% (Twenty Four Percent)can be substantial.