Although the landlord’s tacit hypothec exists
automatically at common law, by including this clause in the Lease Agreement,
the Landlord’s rights are strengthened because the Tenant will be made directly
aware of the fact that his goods may be attached and cannot claim ignorance at
a later stage.
The principle behind the landlord’s tacit hypothec is that where
a tenant is in arrears insofar as the payment of rental is concerned, a
landlord is entitled to attach movable goods on the leased premises equal in
value to the arrear rental, together with the costs of recovering such rental.
These goods can then be sold in execution and the proceeds utilized to satisfy
the debt owing to the landlord. It therefore stands to reason that the Tenant
should not be entitled to alienate these goods during the course of the Lease
Agreement.