In cases where property has been damaged due to hail; floods or tornado’s or any other circumstances beyond the control of the Tenant it is imperative to distinguish whether the premises have been damaged to a point that it is no longer safe to reside in the property, or if the property is damaged but is still deemed safe to reside in.

 If the Premises leased is no longer safe to reside in:

If the Property leased is no longer structurally sound, it is imperative to follow all evacuation procedures to guarantee the safety of all Parties. In respect of the premises, the Parties should consider the Liability clause in their Leases. As per TPN’s current Residential Lease Agreement:

 “should either Party suffer any loss as a result of a natural disaster, or any other incident beyond the control of the other Party, it is hereby agreed that such Party will, in no way be entitled to a claim for damages as a result of such incident from the other Party, In the in the event that a natural disaster, or any other incident beyond the control of either Party, renders performance by either Party impossible, this Lease Agreement shall terminate immediately and neither Party shall have any claim for damages against the other Party”.

Therefore, due to the floods being beyond the control of either party, neither the Landlord nor Tenant should be entitled to claim for damages as a result of the floods.

 The Lease shall terminate immediately, and any deposit held in trust by the Landlord or Property Practitioner should be released back to the Tenant as per the Lease Agreement, considering the circumstances.

 If the Premises leased is damaged but still safe to reside in:

In instances where the leased premises is damaged by a natural disaster, such as a flood or violent storm, the liability in respect of the repairs to the immovable property, that is the structure and permanent fittings, lies with the Owner of the Premises.

In terms of sectional title schemes, section 37 of the Sectional Title Act, explains that the Body Corporate is responsible to repair damage to the common property. An example in this respect, would be any damage to the roof or foundations of a complex as a result of the floods or rain.

Summary

If the tenant cannot reside in the property because of the conditions rendering it uninhabitable then the rental is not payable by the tenant – they cannot pay rent for a property that they cannot use.

If the tenant does not pay the rent, the tenant is in breach of contract (written or verbal).

Practically the first step of action is to contact the tenant to establish the reason for non-payment. You will know your tenant and be able to read if this is a once-off situation or if the tenant routinely pays late or only partially.

It is important to read the specific lease agreement's rent due and breach clauses as there are different ways to remedy the breach of non-payment. 

Either you may cancel the lease forthwith or you are required to demand payment in writing giving the tenant 7 calendar days (in the event of a non-CPA lease agreement) or 20 business days(in the event of a CPA lease agreement) to remedy their breach. Send a letter of demand directly off TPN Credit Bureau - instructions HERE. 

Should the tenant fail to remedy their breach in accordance with the letter of demand, then the landlord is entitled to cancel the lease agreement and demand that the tenant vacate the property.

 Should the tenant fail to vacate the property as requested, then the landlord must take legal action to obtain a court order Eviction, after which the Sheriff of the Court will forcibly remove the tenant.

In South Africa, it is commonly accepted that a landlord is responsible to pay the rates and taxes and the tenant pays for all consumption and use of the service provided.

This, however, can be stipulated in the Lease agreement signed by the Tenant and Landlord, so that all or some of the rates and taxes are the responsibility of the tenant.

Over the years, because the sewerage and refuse are services used by the tenant, most contracts have been drafted to provide that the tenant is responsible for these charges, BUT, it must be stated in the lease agreement. 

Yes, TPN recommends that landlords perform a credit report on all adults over the age of 18 applying for rent.

In terms of the National Credit Act Regulations 18 (4) (e) and (5) you must first obtain the consent of each applicant before you access their credit report. TPN has drafted the consent clause for your use.

If the applicant tenant refuses to provide consent for you to perform his / her credit check – you are then not entitled to access the credit report. It is recommended that you decline the tenant’s application for rent.

The landlord is entitled to receive the proper amount of rent paid by the tenant at the proper place and time.

The lease agreement will stipulate the rent due date. Most lease agreements state the rent is due and payable in full, free from deductions on or before the 1st of every month. The tenant would then be in breach of contract if the rent was still outstanding on the 2nd of the month.

The lease agreement will determine the payment date – a tenant and landlord might negotiate that the rent is paid on the 15th of the month. If so, the tenant's rent only becomes due on the 15th and if not paid on the 16th – the tenant is in breach of contract.

There is no law which provides the tenant a 7-day grace period to pay their rent.

Yes, the Property Practitioner is acting as an agent for the landlord. Ultimately the landlord takes the risk should the tenant default on the rent. Every landlord has a different appetite for risk and will accept or decline the applicant tenant based on the credit report, affordability assessment and any other relevant information.

The landlord can and should demand to see the all applicant tenant's credit reports before making a decision to accept the tenant.

A verbal lease agreement is binding. However a written lease agreement is advisable as this protects both the tenant and the landlord in the event of a dispute.

In terms of the Rental Housing Act, the tenant can demand the lease is reduced to writing.

For more information, please see TPN's Video on the Rental Housing Act.

Any person over the age of 18 may sign a lease agreement.

TPN recommends that all adults over the age of 18 should be jointly and severally liable for the rent.

History shows that spouses have been known to hide behind each other’s credit profiles - there have also been cases of siblings, co-workers and even friends entering into lease agreements where only one tenant signs the lease but all the habitants will pay their portion of the rent. If all the habitants do not pay their portion – then the landlord can only take legal action or blacklist the tenant who signed the lease agreement. This limits the landlord's ability to recover non-paid rent.

The tenant and the landlord will negotiate this up-front. The amount of deposit due will be written in the lease agreement.

The landlord is entitled to negotiate whatever deposit he / she deems fit. It is common for the landlord to require one months rent or even a double deposit (2 months rent). The landlord could even require a triple deposit if the tenant's credit report is considered risky.

However once the amount of the deposit has been agreed, the landlord cannot demand a bigger deposit during the term of the lease – unless the tenant agrees or unless the lease agreement makes provision for a topup when the rent increases.

Practically the landlord should not hand over the keys to the property until the agreed deposit and first months’ rent has been paid (and cleared in the case of a cheque).

Clause 1.9 of the TPN Lease Agreement offers an option to create a suspensive condition that if the tenant does not pay the deposit, the lease agreement is invalid.

In terms of section 5(3)(d) of the Rental Housing Act, if the landlord or Property Practitioner holds the deposit, he / she must invest the deposit in an interest bearing account with a minimum rate of interest applicable to a savings account.

The tenant is entitled to request written proof of the interest earned and if requested, the landlord / Property Practitioner is obliged to provide such proof.

Please also refer to the section on Refunding the Deposit. 

For more information, please see TPN's video on the Rental Housing Act or read our interesting blog article on deposits to find out more...

https://mrisoftware.tpn.co.za/blog/rental-deposits-demystified-what-when-how-and-why/ with a downloadable PDF for your office https://bit.ly/3L1UZoY

Common law provides that the landlord must hand over and then maintain the property fit for the purpose for which it was let.

However many lease agreements deal with maintenance of the property differently. It is advisable to ensure you have read the “Maintenance” clause of the lease agreement carefully to ensure you are aware of your obligations.

Most lease agreements provide that the landlord is responsible to maintain the structure of the property and any electrical, plumbing or electrical apparatus which was not damaged by the tenant. Generally the tenant is responsible to maintain the inside of the property “fair wear and tear” excluded. If the property has a garden or pool, it is common that the tenant is responsible to maintain the up keep of the garden or pool. Remember – it is important to refer to your written lease agreement.

For more information, please see TPN's video on Unfair Practises

Yes, the landlord or Property Practitioner has the right to enter the property to perform routine inspections, but only after arranging with the tenant to do so at a reasonable time, and with reasonable notice. The tenant does not have the right to deny the landlord or Property Practitioner reasonable access.

The landlord or Property Practitioner may not demand over-zealous access to the property as this would interfere with the tenant's right to peaceful enjoyment of the property.

Read our interesting blog article on reasonable access - https://mrisoftware.tpn.co.za/blog/is-your-tenant-refusing-access-to-the-property/

Refer to our wiki on the importance of performing the joint incoming and outgoing inspection here.

Watch TPN's video on Unfair Practises. 

The landlord is entitled to receive the proper amount of rent paid by the tenant at the proper place and time.

The lease agreement will note the rent due date. Most lease agreements state the rent is due and payable in full, free from deductions on or before the 1st of each and every month. The tenant would then be in breach of contract if the rent was still outstanding on the 2nd of the month.

The lease agreement will determine the payment date – a tenant and landlord might negotiate that the rent is paid on the 15th of the month. If so, the tenant's rent only becomes due on the 15th and if not paid on the 16th – the tenant is in breach of contract.

There is no law which provides the tenant a 7 day grace period to pay their rent.

For more information, please see TPN's video on the Consumer Protection Act.

If the tenant does not pay the rent, the tenant is in breach of contract (written or verbal).

Practically the first step of action is to contact the tenant to establish the reason for non-payment. You will know your tenant and be able to read if this is a once-off situation or if the tenant routinely pays late or only partially.

It is important to read the specific lease agreement's rent due and breach clauses as there are different ways to remedy the breach of non-payment. 

Either you may cancel the lease forthwith or you are required to demand payment in writing giving the tenant 7 calendar days (in the event of a non-CPA lease agreement) or 20 business days(in the event of a CPA lease agreement) to remedy their breach. 

Should the tenant fail to remedy their breach in accordance with the letter of demand, then the landlord is entitled to cancel the lease agreement and demand that the tenant vacate the property.

 Should the tenant fail to vacate the property as requested, then the landlord must take legal action to obtain a court order Eviction, after which the Sheriff of the Court will forcibly remove the tenant.

No, this is a criminal offence in terms of the Rental Housing Act.

The landlord or Property Practitioner cannot change the locks, remove the front door or take any action which effectively locks the tenant out from the property or denies him peaceful occupation of the property without a court order.

No, it is a criminal offence in terms of the Rental Housing Act for the landlord or Property Practitioner to disconnect utilities. 

Only a service provider, such as the Municipality or Eskom may disconnect services due to non-payment of those services.

For more information, please see TPN's video on Unfair Practises.

Refer to the lease agreement, specifically to any cancellation clause.

If the lease agreement is month-by-month, then a calendar months’ notice is required to cancel the lease.

If the lease agreement is for a fixed period and there is no cancellation clause (for example: in the event of the property being sold or if the landlord wants to take occupation himself), then the landlord cannot cancel the lease unless the tenant breaches the lease.

See the below diagram on Early Cancellation of a Lease Agreement.

We have an interesting blog article to help even more - read it HERE and download a copy of the guide for your office. 

In terms of the Rental Housing Act, the tenant and landlord or Property Practitioner must jointly perform incoming and outgoing inspections.

This is to place on record any defects and subsequent damage for which the tenant may be liable.

If the landlord or Property Practitioner does not perform both the incoming and outgoing inspection, it is deemed the property was handed back in good order and the landlord will have no further claim for damages.

However, if the landlord attempts to make arrangements for the outgoing inspection and the tenant fails to respond, the landlord can access the property within 7 days of the expiration of the lease to assess for any damages and apply the costs for repair against the deposit.

For more information, please see TPN's video on the Rental Housing Act.

Refer to sections on incoming and outgoing inspection and interest earned on the deposit.

The landlord can apply the deposit to any amount due by the tenant - outstanding rent or utilities, reasonable payment for damages to the property (for example: cleaning of carpets, lost keys or remotes and returning the state of the property back to its original state at the beginning of the lease), fair wear and tear excluded.

If during the outgoing inspection, it is established there are no damages, the deposit must be refunded within 7 days of expiry of the lease.

If during the outgoing inspection, damages are noted, the balance of the deposit must be refunded within 14 days of restoration of the property.

If the tenant fails to attend the outgoing inspection, the balance of the deposit must be refunded within 21 days of the expiry of the lease.

The tenant is entitled to all receipts for the cost of repairing any damages.

We explain a bit more about deposits in an interesting article - https://mrisoftware.tpn.co.za/blog/rental-deposits-demystified-what-when-how-and-why/or watch a video about the Rental Housing Act where we explain deposits

If the co-owners are married in community of property, spousal consent is required as one spouse cannot burden the joint estate without consent of the other.

If the co-owners married out of community of property both must sign or failing that authorise the other to sign in their stead, Joint ownership requires joint consent.

The essence of a lease agreement is that it is a legally binding contract. A lease agreement is therefore subject to all of the laws that pertain to contracts in general.

 The law clearly states that the obligations of the parties to a contract will not be extinguished by the death of either party, unless:

·         the contract contains a clause that specifically states that the contract will terminate upon the death of one or both parties; or

·         the will of the deceased party specifically states that the contract will terminate upon the death of the party in question.  

In most cases, the rights and obligations of the party in question will pass on to the executor of the deceased’s estate. This position was confirmed by the Courts in the well-known case of Lorentz v Melle and Others 1978 3 SA 1044 (T) at 1058C.

This means that if a tenant or a landlord dies, the lease agreement will not automatically terminate unless the lease agreement contains a clause that specifically provides for such termination. In all other instances, the executor will take over the obligations of the deceased party and should be the first point of contact for the other party to the agreement. The rule that applies to all contracts applies to a lease agreement in that the rights and obligations arising from the lease will pass to the heir, as long as the heir accepts the inheritance.

A tenant^* may cancel the lease early; but the landlord or Property Practitioner may charge a reasonable penalty.

In determining the reasonable penalty, the landlord or Property Practitioner will consider loss of rent; commission paid, or marketing costs.

The landlord / Property Practitioner would have to indicate to the tenant how the penalty is calculated i.e. loss of rent, commission, or advertising costs.

Example: the landlord would not be able to charge the tenant for loss of rent if a suitable replacement tenant was placed with no rent lost by the landlord.

*Note the exclusions:

• Leases or renewals entered into prior to 1^st April 2011
• Where the tenant is:
• the State,
• a juristic entity whose asset value or annual turnover is greater than R2 million,
• where both the landlord and tenant are juristic entities

* This means that the 20 Business Day rule only applies to lease agreements signed after the 1st April 2011 and only where the tenant is a natural person. If the tenant is a juristic person (trust, company or close corporation) then the tenant does not have right to early cancellation of a fixed term agreement.

Consumer Protection Act

Section 14:   Expiry and renewal of fixed term agreements

(2)

  (b)

     (i) the consumer may cancel that agreement-

       (bb) at any other time, by giving the supplier 20 business days’ notice in writing or other recorded manner and form, subject to subsection 3 (a) and (b);

 (3) Upon cancellation of a consumer agreement as contemplated in subsection (2)(b)-

   (a) a consumer remains liable to the supplier for any amounts owed to the supplier in terms of that agreement up until the date of cancellation; and

   (b) the supplier-

         (i) may impose a reasonable cancellation penalty…

 (4) The Minister may, by notice in the Gazette, prescribe-

  (c) the manner, form and basis for determining the reasonableness of credit and charges contemplated in subsection (3)

Regulation

Section 5: Maximum duration for fixed-term consumer agreements

(2) For the purpose of section 14 (3), a reasonable credit or charge as contemplated in section 14 (4) (c) may not exceed a reasonable amount, taking into account-

   (a) the amount which the consumer is still liable for to the supplier up to the date of cancellation;

   (b) the value of the transaction up to cancellation;

   (c) the value of the goods which will remain in the possession of the consumer after cancellation;

   (d) the value of the goods that are returned to the supplier;

   (e) the duration of the consumer agreement as initially agreed;

  (f) losses suffered or benefits accrued by the consumer as a result of the consumer entering into the consumer agreement;

   (g) the nature of the goods or services that were reserved or booked

   (h) the length of notice of cancellation provided by the consumer;

   (i) the reasonable potential for the service provider, acting diligently, to find an alternative consumer between the  time of receiving the cancellation notice and the time of the cancelled reservation; &

   (j) the general practice of the relevant industry

 (3) Notwithstanding sub regulation (2) above, the supplier may not charge a charge which would have the effect of negating the consumer’s right to cancel a fixed term consumer agreement as afforded to the consumer by the Act

Watch a video on the Consumer Protection Act to learn more.

The definition of "Fair Wear and Tear" is an important one because it often causes conflict between Landlords and Tenants.

Currently there is no legislative definition of "Fair Wear and Tear", but generally it is deemed to be damage that occurs due to the ordinary use of the premises by a Tenant over the passage of time or the ordinary operation of natural elements.

Some examples of "Fair Wear and Tear" would be the following:

• old, warped window frames, 
• paint peeling on window frames
• paint that has faded in the ordinary course, 
• External doors being exposed to elements 
• plaster that has cracked as a building settles and 
• carpets worn as the result of being walked on. 

Conversely, the following would constitute damage due to negligence and would be for the tenant's account: 

• windows damaged as a result of being slammed, 
• walls damaged due to nails or screws, 
• a key rusting in a lock, due to being left in an outside door and exposed to rain,
• paint discoloured as a result of cigarette or candle smoke, 
• carpets discoloured due to pets or stains and 
• kitchen counters scratched due to cutting. 

Please read our blog article for more interesting information https://mrisoftware.tpn.co.za/blog/what-is-fair-wear-and-tear/

Landlords are often tempted to take to extreme measures when it comes to defaulting tenants, but these measures can have very serious consequences.

In a moment of frustration, it can be very tempting to arrange for electricity or water supply to be suspended, change the lock on the front door, or even to remove certain items from the leased premises, just to give tenants the nudge that they need to perform their obligations. Unfortunately, however, all of the current consumer-friendly legislation aside, in terms of the South African common law, it is unlawful under any circumstances for a landlord to interfere with a tenant’s “peaceful and undisturbed” use of the leased premises, unless correct legal procedure is followed. Such an act is termed “spoliation” and can have very serious consequences for the landlord.

The premise behind spoliation is that it is illegal to “take the law into one’s own hands”, regardless of whether the reason behind such action is based on a valid, lawful claim or not. 

Where an act of spoliation occurs, a tenant has a number of remedies at his or her disposal, including counter-spoliation and applying to either the Rental Housing Tribunal or the Courts for urgent relief.

In the case of counter – spoliation, the tenant may legally immediately take action to remedy the situation, such as restoring water or electricity supply or re-entering the premises, thus defeating the purpose of the actions of the landlord.  The most widely utilised remedy available to tenants, however, is to apply for an urgent interdict, known as a mandament van spolie. 

In the case of a residential lease, this can be done through the Rental Housing Tribunal or through the Courts. 

In the case of a commercial lease, only the Courts may be approached for relief. 

The application is done on an urgent basis, meaning that it can be heard in a matter of days. In coming to its decision, the Court will not take into account the underlying circumstances, only whether the tenant was in peaceful and undisturbed possession of the premises and/or goods at the time, and whether the landlord followed due legal process when taking any action. As such, the landlord will invariably be on the back foot from the outset. Furthermore, where application is made to Court and the Court finds in favour of the tenant, it may order that the landlord pay the tenant’s legal costs which, given the urgency of the application, will invariably be substantial.

In the case of a commercial lease in particular, the tenant may suffer substantial damages as a result of not being able to operate its business. In such an instance, the tenant will be entitled to claim such damages from the landlord. Furthermore, where a landlord locks a tenant out of the premises, in addition to constituting spoliation, the lock-out can also be deemed to be an eviction, and therefore amount to an infringement of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act No 19 of 1998 (“PIE”).

Ultimately, therefore, as frustrating as it may be, it is always advisable to adhere to correct legal process. TPN is always willing to guide clients in the right direction, so as to ensure that the situation is resolved in the correct manner.

Watch TPN’s Video on Unfair Practises for more information. 

Our recommendation is:

• ID Verification 
• The ID verification will indicate for you if the name and surname match the ID number before you proceed with the reset of the enquiries.
• You will be alerted to the possibility of deceased or fraudulent ID documents. The system will also alert you to an input error - e.g. entering the name and surname back to front, mismatching a husband and wife's details, or entering the tenants ID number with the landlords details. (All common mistakes)
• ID Biometric
• The ID Biometric check is the ultimate in fraud prevention as an SMS is generated to the individual you are checking which asks them to perform a "live" selfie, this selfie then verifies using biometrics against the latest photo on file for the individual.
• Ensuring the person you are checking is who they say they are. 
• RentCheck
• The RentCheck enquiry is the ultimate credit check to perform on a tenant - it includes the TPN and TransUnion checks and includes Rental Payment Profile, Judgements, Defaults and Notices.
• In order to access the RentCheck enquiry, the Consumer is required to load a minimum of 1 (One) month's Payment Profile Information onto the Database;

The Consumer acknowledges and accepts that ongoing access to RentCheck shall be dependent on Rental Payment Profile information being updated on a monthly basis and that TPN may, in its sole discretion, suspend the Consumer's access to RentCheck at any time should the Consumer fail to timeously provide such information to TPN.

• If the RentCheck enquiry is not available
• Contact TPN's data team on 0861 876 000 to find out how you can access more information at discounted rates.
• It is then recommended to select the TPN, TransUnion, and Experian Individual Enquiries - this will show you any Rental Payment Profile as well as any judgements, defaults and/or notices that are on the applicant's credit profile.
• It is recommended to select all three bureaux reports as each bureau has different client bases. TPN has found that unless all three enquiries are performed, the TPN member runs the risk of not seeing defaults listed with the other credit bureaux.

In cases where property has been damaged due to hail; floods or tornado’s or any other circumstances beyond the control of the buyer or seller it is imperative to distinguish whether the property has been transferred. 

Dependant on the Offer to Purchase (“OTP”), most OTP's will contain a clause which will determine when risk transfers. In TPN’s OTPs, one can refer to the clause on Possession & Risk which states:

 “Legal Possession of the Property shall be given to the Purchaser on the Registration Date, from which date all benefits and risks in respect of the Property, including the liability of all rates, taxes and levies on the Property, shall pass to the Purchaser, subject to anything to the contrary that may be contained in clause 9.2.”  [Clause 9.2 refers to Vacant Occupation].

Therefore, only when the property has transferred to the Purchaser, will the Purchaser be liable for any damage to the property. Until then, the Seller will remain liable for any damages that may have resulted due to the flooding.