With the property market being so hard hit by the current economic crisis it is imperative for all of us to count every last cent. Property owners and landlords, especially those who bought second or third properties for purposes of letting them out, often have problems with tenants who pay to little or who do not pay at all. This in turn creates a feeling of distress and even more penny pinching for the landlord as he is still liable for the payment of the mortgage with little or no reimbursement therefore.
In most cases the landlords sympathizes with the situation of the tenant who in turn takes advantage of the situation and ends up not paying for two months, or, as in most cases, even longer. When the landlord finally decides to evict the tenant on grounds of breach of contract the damage is done and the landlord is left to pick up the pieces with little or no hope of collecting the arrear rent. In order to collect the arrear rent you have to issue a summons, which in turn forces you to incur more expenses and finally, after the tenant vacates your premises you have to appoint a tracer to trace the tenant and then proceed with legal steps. Finally, after you’ve spent a fair amount on legal costs and have wasted countless hours, the court compels the tenant to pay his debt in R100-00 a month installments over 5 years or more.
Evicting a tenant is no easy feat either. In terms of The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE Act) a landlord wanting to evict a tenant who is in breach of his lease agreement, has to follow prescribed steps and procedures in order to have the tenant evicted. The normal 30 days notice, which most landlords believe they can do, will not suffice, even if the agreement makes provision therefore. The landlord has to instruct an attorney to launch a formal court application which, in perfect circumstances, takes at least a month. This leaves the landlord with another month without his desperately needed income.
An Application for eviction can cost anything from R6 000.00 upwards to R20 000.00 depending on a number of factors. At the end of the day this is a small price to pay if you consider the amount you will lose when your tenant finally vacates the premises but still fails to pay his arrear rents. Experience have shown that most landlords decide to evict only after the second or third month of not receiving rental after which the application takes another month and finally, if the landlord manages to secure a new tenant, he is without any rent for four or five months.
The tenant will, should judgment and or eviction be granted, be liable for a portion of the costs and a judgment will reflect on his credit bureau record until he paid the arrear rent and his portion of the costs.
What you should do, is act immediately. Should your tenant fail to pay for seven days, instruct an attorney to write a letter of demand with a seven day expiry date. Should he still fail to pay, instruct the attorneys to cancel the lease agreement in writing and proceed with summons and eviction. In this way you might have your tenant out within a month and a half and lose a maximum of two months rent. This may vary depending on the contents of the lease agreement should there be one and also whether your tenants oppose the application and the summons, the latter being a rarity.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.