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Practical Solutions for landlords: the Lowdown on Lockdown Level 4

PUBLISHED 1 MAY 2020   

Practical Solutions for landlords: the Lowdown on Lockdown Level 4

The latest Regulations relating to the Schedule of Services and Framework of Sectors was gazetted and released late last night, the 29th of April 2020. They repeal all previous Regulations issued in terms of the COVID-19 pandemic dealing with the forced lockdown in South Africa. The new Regulations speak only to Alert Level 4 from 01 May 2020.

As part of this process, government will be adopting a ‘risk-based’ approach with more severely affected areas set to face stricter regulations than areas that don’t have as many coronavirus cases. To ensure that the response to the pandemic can be as precise and targeted as possible, there will be a national level and separate levels for each province, district and metro in the country.

As a result, legal advice will differ in each case depending on the severity of the lockdown level in an area. Understandably, landlords and property practitioners have very important questions that need to be answered on what this means for the rental industry. TPN and SSLR Inc. put our heads together to answer your most pressing questions.

The Cabinet will determine the severity of the Alert Levels 1-4 and the extent that they apply to each area. These answers have been prepared under Alert Level 4 and should be utilised only under this instance.

Good news for the property market:

  • The deeds office is open and will be functioning from 01 May 2020.
  • Sherriff services are to commence for all legal practitioners, thus Court documents, applications, and action can be served.
  • Evictions are allowed! A competent Court may grant an order for eviction. Provided that any order of the eviction shall be stayed and suspended till the last day of Level 4. Unless a Court decides that it is not just and equitable to stay and suspend the order until he last day of the alert level.
  • Permits for the movement of persons may only be issued under very restricted circumstances. These circumstances include:
    • Permits to perform essential work or a permitted service signed by the institution.
    • Permits for the movement of children to travel to another province of metropolitan area or district.
    • Permits to travel to another province or metropolitan area or district for a funeral.

Your questions answered

Question 1: May a tenant move into or vacate a premises during Alert Level 4?

No. We can derive this from provision 16 of the Regulations. The Regulations specifically state:

16(1)

Every person is confined to his or her place of residence

16(2)

A person may only leave their place of residence to:

a.

Perform an essential or permitted service, as allowed in Alert Level 4.

b.

Go to work where a permit has been issued.

c.

Buy permitted goods.

d.

Obtain allowed services.

e.

Move children, as allowed.

f.

Walk run or cycle between the hours of 06h00 and 09h00 within 5 kilometres of their place of residence.

Therefore, moving into or out of properties is not allowed. Effective communication with the landlord or agent is vital during this time, please do not take the Law into your own hands or be the test case for vacating or moving into a premises.

Question 2: What if my tenant does move during Alert Level 4?

The tenant may be acting illegally in terms of the Regulations and this must be taken into account for any damages that may be suffered by the landlord. There are a few pertinent questions that need to be asked here, such as:

  1. Did the tenant leave without notice?
  2. Did the tenant cancel the lease early as per Section 14 of the Consumer Protection Act?
  3. Was the lease to end anyway?

Depending on the answer to the questions above, there may be different claims that the landlord can institute. The important thing here is that the tenant may not vacate and has acted contrary to the lease, legislation, regulation or declarator.

The landlord may thus have a claim for damages as a result of the early vacation of the premises without any notice; for a reasonable cancellation penalty in terms of the Consumer Protection Act; or for damages based in delict should the tenant vacate illegally at the end of the lease term.

Question 3: May a tenant use the once-off movement to move into a premises?

No. Only persons returning to their residence or work, who was not at their place of residence or work during lockdown, will be able to travel between provinces and metropolitan areas. This is a once-off movement to return to their own residence, not to take occupation of a new property. During the panel discussion with the media, it was hinted that this would need to occur over the 1st of May long weekend and that it is not intended to circumvent the Regulations.

Question 4: May an estate agency trade from their place of business and perform all estate agent functions?

No. An estate agency is not listed under Table 1 of Alert Level 4 for essential work or permitted services. In the previous draft regulations, commercial and residential real estate activity would only be allowed at level 3 and level 2 respectively.

Question 5: May I perform incoming and outgoing inspections?

No. Estate agents, property managers, property practitioners or landlords are not included in the list of essential work or permitted services. They are thus not permitted to travel to, do or conduct any activity in the ordinary course of business. This limits what can occur on a lease premises including moving in and vacating. All inspections must be held off for the moment. A practical solution may be remote or online inspections but this is impossible to implement for a vacating tenant.

Should the tenant vacate the premises and leave the keys at security or another safe place, please do not collect the keys and perform an inspection. This can wait until you are permitted to do so. The tenant will still be liable for the damages when the inspection has been done.

Question 6: What happens to the tenant’s deposit should he vacate?

As the landlord or agent cannot perform an outgoing inspection, damages to the premises cannot be ascertained. This creates a legal problem as in terms of the Rental Housing Act, the deposit must be returned with certain time periods. The Act however also dictates when the deposit must be returned in relation to the inspection having been performed, and should it be illegal to perform the inspection, this must be taken into consideration.

We suggest holding onto the deposit until it is possible to do the inspection. Inform the tenant of this situation and that they will be liable for all damages to the premises, not barring the return of the keys (as this has been illegally done) and even invite them to the inspection when it can be performed. Should there be no damages, the deposit can be returned to the tenant with interest once the inspection has been completed. Should there be damages then the deposit can be utilised to cover those damages.

Question 7: May I have an Attorney prepare an eviction application and evict the tenant from a property?

Yes. An Attorney may prepare, serve and even be granted an Order for the Eviction of a tenant from a premises during Alert Level 4. The Order may however only be executed after Alert Level 4 ends.

Conclusion

This is an unprecedented situation for the residential and commercial real estate industry, not only in South Africa but globally. Clarity, further proposed amendments to the Regulations and challenges to the existing framework is ongoing and paramount. We will continue to speculate, assume and contrast the Law in relation to morality and Ubuntu until specificity is garnered from the Regulations.

Until then, effective communication is the key. Landlords, estate agents and tenants must communicate - we will all get through this, but only together.

Michelle Dickens
MD of TPN Credit Bureau