Landlords are protected against non-paying tenants – but the legal process can be time consuming.
The frequently heard complaint that some of our laws make it harder to collect rentals is by and large justified, says Grant Gunston, senior partner of Grant Gunston Attorneys. "This has become increasingly apparent with the recession that we have been going through.
"In our practice's rental and levy collection department, we now have some 500 debtors. This is a two- or three-fold increase on the numbers from early 2008."
Particularly worrying, said Gunston, is that the number of evictions now being applied for has increased by roughly the same factor.
Many landlords, especially those in the buy-to-rent market, said Grethe Loof, head of Gunston Attorneys' rent and levy collections, find it frustrating that, although the law does offer them protection from those who breach their lease agreements, the legal process can be time-consuming and costly, particularly if the landlord has to fund these bond repayments on his own for three or more months.
"The whole cancellation/eviction process will usually take about three months," said Loof.
Loof added that once the tenant has defaulted on the lease agreement by non-payment, late payment or in some other way, the landlord has the right to cancel the lease forthwith except in those cases where the lease specifies that a written demand has first to be seen. Usually the landlord can cancel immediately, but sometimes he will be obliged to give the tenant a further seven days to find the money.
Once the lease is cancelled, it is possible that the tenant will not leave and an eviction order has to be applied for. The PIE Act (the Prevention of Illegal Evictions Act) stipulates that 30 days notice must be given where there is a lease agreement on a month-to-month basis.
Having cancelled the lease, the landlord can apply for an eviction by means of an ex parte application, signed by the Magistrate in his chambers and at this point a date will be set for the tenant to appear in court. The signed application will be served on the tenant by the sheriff 14 days prior to the court date and only on that date can eviction be ordered by the Magistrate.
Many landlords, said Gunston, are not aware that this application must be brought within three months from cancellation of the lease agreement. If this is not done, the PIE Act places certain responsibilities on the owner before eviction can take place (for example, proving that the tenant has alternative accommodation).
If the tenant does appear in court, his circumstances will be enquired into and in general he is given at least 30 days before the eviction comes into effect. If he is still occupying the property after the lapse of the time stipulated by the court, the sheriff will be authorised by the court to evict him. This can even involve placing his goods and furniture on the street or in the sheriff's store as well as replacing all the locks on the property to prevent his returning to it.
The drastic eviction process, said Loof, occurs only in a relatively few cases as most tenants will move to catch up on arrear payments or do a deal with the landlord's lawyer once legal proceedings against them start.
"The landlord has a lien on all goods in the tenant's home and a landlord can get the sheriff to attach some or all of the tenant's goods as soon as a summons or a seven day letter of demand (in terms of the Section 32 of the Magistrates Act) have been issued. After this the tenant is not allowed to remove the goods.
"Once goods are attached, the tenant will often 'get the message' and will find the rent due or begin negotiations to put matters right. This is a robust tough measure but regrettably it is sometimes necessary."
Gunston said that right now the buy-to-rent market is very definitely worth investigating because residential properties are available at a discount to former prices and, therefore, giving better returns.
Many of the problems that are encountered with tenants, he added, can be avoided if the landlord employs an experienced agent who knows how to carry out credit and reference checks.
"In today's conditions, the vetting and selection of tenants should be done with great care. Fortunately there are reputable agents in this field."
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I am not living in SA at the moment but have a property I rent out in the Cape. As your article ended, make sure you use a reputable agent, I did not and have learnt my lesson.
My agent found 2 people to rent my property on which she apparently did a credit check on the database she subscribes to and also apparently phoned the details of their previous landlord who confirmed them as good tenants. (Actually the one person was evicted from her previous rental property and owe the owners money among various other people). I assume the previous landlord was a false contact and just a friend of one of the tenants. Before they paid their deposit they asked the Agent for the keys to go measure the windows for curtains. Who in their right mind would do that?? She gave them the keys and they moved in, without paying a cent. At this point my agent did not let me know what happened. She just took them on their word that they would pay her the monies due. Not even 3 months further down the line and not a cent paid, did she contact me. As I don't often look at my bank account in SA as I only have the rent coming in and the mortgage out I didn't pick up that the rent wasn't being paid until my bank contacted me that my mortgage payment could not be paid due to insufficient funds. I was shocked and when I looked I noticed what happen. I asked a friend to go and see what was going on at the property and to ask the people to just move out as I had no faith in my agent any more. I even offered them to just move out and I would forget about the money they owed me thinking that they could just really be in financial trouble. The next thing I get is an email from her supposed lawyer saying that my tenant knows her rights and that me sending someone there has put a lot of emotional stress on her and her child. So now having stayed in my property for 6 months without paying a cent I went about the mentioned legal steps to get them out of the property. At every step of the way they had ways to delay the process and just kept on promising that they would pay the outstanding rent. The courts really found it hard to get hold of them and the only person on the contract that actually earned any money had apparently moved out and couldn't be found. The person left in the house only worked half days. When the courts finally found them at home and wrote up all the assets she had we got letters from several people that the goods actually belonged to them and not my tenant. According to the law these people have to proof their ownership. In the meanwhile my lawyer had found out that my now lone tenant had been through the same process with someone ells and that all the claims on the property was granted to the claimants in the previous case. So now it is evident that she owns nothing and almost earns nothing. She has finally moved out a day before she was to be evicted and left the place in a mess. Two loads of rubbish to be moved away, carpets to be cleaned, walls to be painted, sink broken, kitchen counter ripped out etc etc. Off course she has now moved out and there is no deposit to claim for the above. All I can do is ask my lawyers to add the cost to what she owes me but will that really help as she will probably never be able to pay me back. So 11 months later and almost R10,000 worth of legal cost on top of the loss of rental income and damage to the property I finally have my property back.
It just seams like the whole thing was just to well planned out and that the tenants just knew exactly what to do at which times to drag out the process. It is also evident that they never intended to pay a cent as they have done the same thing with the previous landlords. I asked my lawyer about the possibility of putting a criminal charge of fraud against them so these people can be held responsible for there acts but he says unless it has happened 3 or 4 times and we have enough evidence it would be hard to prove even thou it is so obvious that they are criminals.
So now who is her next victim as she obviously will need a place to stay and does not have the means to pay for it. Good luck to all you landlords out there and beware, they are everywhere... Make sure your agent does proper background check and even contact the courts to check if they have any past or pending cases against the prospective tenants. In today's world we cant trust anyone anymore. - Anonymous
Why can't the law be changed to protect the Landlords?? The PIE Act is totally against the rights of the owners of properties being let. We should all stand together and demand that the Act be changed to protect us, or at least to make the periods shorter. – Dot Ras
