Whilst it is a widely accepted fact that
current legislation in South Africa relating to the rental of immovable
property undoubtedly favours the tenant, there are thankfully still certain
common law remedies that are available to the landlord. One of these common law
remedies is termed the landlord’s tacit hypothec.
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.
The landlord’s tacit hypothec exists
automatically at common law and thus the landlord’s rights do not need to be
specifically set out in the lease agreement. Importantly, however, parties can,
in fact, contract out of the hypothec and therefore, in the unlikely event that
the tenant or the tenant’s representatives have been responsible for drafting
the lease agreement, landlords should be on the lookout for such a clause.
Whilst the hypothec comes into being automatically, it cannot be enforced
automatically and the landlord will need to approach either the Rental Housing
Tribunal or a competent Court in order to obtain an attachment Order before any
action can be taken. Given that the Rental Housing Tribunal does not have the
power to hear matters on appeal, there is an ongoing debate as to the
Constitutionality of it having the power to grant attachment Orders. For this
reason, we strongly advise clients to rather approach the Courts for relief. To
do this, the landlord will need to employ the services of a qualified attorney.
Depending on the value of the outstanding rental, the relevant application will
generally be brought in the Magistrates Court. Once the Order of Court has been
granted, it will be given to the Sheriff, who will then physically attach the
goods. In the event that the landlord attempts to take the law into his own
hands and remove any goods without following due process, this will amount to
something known as spoliation and the tenant will then have a claim against the
landlord. Such a claim will be for the return of the goods in question, as well
as any damages sustained by the tenant as a result of the landlord’s actions.
The tenant is often alerted to the fact that
the landlord intends to attach his or her property, in which case the he or she
attempts to remove the property in question from the premises. In this regard,
it is important to note that the landlord’s right to have the goods attached
will last only as long as the goods remain on the leased premises, or have not
reached their final destination. In other words, if the goods are in transit,
the sheriff will still be entitled to attach them, but the moment that they are
offloaded at a new destination, the landlord’s hypothec over the goods
automatically falls away. Furthermore, the landlord’s hypothec over the goods
will also fall away the moment that the arrear rental is paid up, either by the
tenant or by a third party on the tenant’s behalf.
As stated above, TPN advises the landlord’s
hypothec be exercised by way of a Court Order. As such, perfecting the hypothec
can be an expensive exercise. Landlords will therefore need to weigh up whether
or not the remedy is a viable option, given the circumstances at hand and the
value of the rental outstanding.