Covid-19 Lockdown Ten rental related questions answered
In response to our President’s call for a nationwide lockdown, questions may arise about how the residential rental sector is affected. Unfortunately, a falsified document, said to have been issued by the Department of Health, is doing the rounds on social media saying that landlords are barred from collecting rent money from their tenants for the next 90 days. This is fake news which has been verified as such by the Department of Health spokesperson, Lwazi Manzi.
Ten Questions on lockdown and rent:
The TPN Credit Bureau legal team specialises in legal aspects concerning the rental industry. We clarified a few scenarios with them and from that, we compiled this short Q & A summary to address possible questions and issues. See Disclaimer in the end.
1.Is rent payable during lockdown? Yes, the obligation of rental payments remains.
2.Should relief for tenants be considered when the situation brings about financial distress for tenants? Yes, if the National State Of Disaster (NSOD) is reason for loss of a percentage or all income due to: - Retrenchment, - Temporary unpaid leave, - Commission-only earner, - Self Employed, - Small business loss of income, - Other relevant reason related to the situation, tenants may apply to landlords for relief from current rental obligations. We have an INCOME DECLARATION AND APPLICATION FORM available for use in such a scenario.
3.Does payment relief amounts eventually have to be paid? Yes, at the expected recovery date of the NSOD, all relief amounts that were agreed upon and which accrued, will become payable as agreed. We have a RENTAL DEFERMENT (PAYMENT HOLIDAY) AGREEMENT available.
4.Will it be better to try and keep up with full rent payments to avoid a future debt situation? Yes, it will be in your best interest to try and keep up with full rental payments/
5.If my income is not affected by the NSOD, do I have to pay rent in full? Yes, the obligation of rental payments remains.
6.Does the above relief measures apply to rent, services or other rent related payments that were in arrears before the announcement of the NSOD? No, normal procedures remain for historical debt.
7.May I move to another house at month end if it is during the lockdown period? No, at the effective date and time of lockdown, you are not allowed to move or relocate. Your options are to move before lockdown or stay where you are until lockdown has been lifted.
8.If my contract expires at month end, but I am not allowed to move because of lockdown, do I still have a rental obligation towards the landlord of the property where I stay? Yes, you have an obligation to pay for the roof over your head where you stay. If you used to make monthly rental payments in the past, a Common Law ruling will apply which means that you have to continue to make monthly rental payments for your stay in the property. We have a LEASE EXTENTION ADDENDUM to assist.
9.If I engaged into a new rental agreement starting on the 1st of the month, but the 1st falls within the lockdown period and because of the NSOD I am not allowed to move, do I have an obligation towards rent from the 1st of that month in terms of the contract? No, The contract can technically not be enforced on the effective date. The situation is as a result of a force that is outside of either the tenant or the landlord’s control. The contract can only be executed after the lockdown period has been lifted. After the lift, the contract will become executable.
10.Can a lease still be cancelled in terms of the Consumer Protection Act? Yes, a tenant still has the right to cancel the lease agreement by giving 20 business days’ notice. The landlord’s right to charge an early cancellation penalty remains in force and should the landlord suffer damages as they are not able to find a replacement tenant due to the lockdown, the landlord would still be able to charge loss of rental as part of these damages.
It is unclear in law at the moment as to whether the days during the lockdown can be counted as business days. Until there is a directive which will come from the Judge President, we have to treat business days as business days in which case, the tenant would be entitled to cancel the lease but not be entitled to vacate until after the lockdown.
We trust that this may answer your questions or that it even may bring clarity on scenarios which you haven’t even thought of.
We at Incomprop are making use of TPN’s services and systems. We have the backup and assistance of the TPN legal team to advise us the situation in the best interest of all parties. We are very grateful to have access to the different documentation that has been specially developed by TPN for their subscribing members to address the current complex issue brought about by the NSOD.
We will try to assist all our clients the best we can during these unforeseen circumstances.
Cobus van der Merwe INCOMPROP
Disclaimer: This publication was compiled, with acknowledgement to sources mentioned, by Cobus van der Merwe / INCOMPROP who is a property practitioner. The content is not published as legal advice, nor is it meant to be financial advice. Whilst effort has been made to ensure the accuracy of information shared, the author disclaims all liability in respect of the content of this information. The reader is thus required to satisfy himself / herself in all respects as to the accuracy thereof.