Alert Level 2 brings welcome relief from the more severe restrictions of Level 3. But what does it mean in practice for evictions and rental housing issues? Evictions are still not allowed to be executed under level 2 - except under exceptional circumstances decided by a court.
There has been severe weakness in rental tenant payment performance, pointing to a rental market under pressure.
More than 24% of South Africa's rental market is in distress due to the impact of Covid-19 lockdown. According to data from FNB and TPN, a third of tenants won't be able to pay their rent this year.
"This is reflected in the multi-year trend in TPN’s percentage of tenants that are in good standing with their landlords, which declined gradually from a decade high of 85.95% as at the 3rd quarter of 2014 to reach 81.52% by the 1st quarter of 2016," says FNB Economist John Loos.
"Then came the more severe economic dip of the 2nd quarter, caused by the COVID-19 lockdown period, and by June 2020 the preliminary percentage of tenants in good standing had dropped all the way to 62.43%. This is a severe drop that more than rivals the decline back in the 2008/9 Global Financial Crisis-related recession.
"The pressure on tenants, resulting from either partial or full income loss in this recessionary period, should lead in certain cases to pressure on pro-active landlords into accepting more moderate escalations and in some cases rentals, or alternatively risk not having a good paying tenant," says Loos.
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Data emerging from the residential rental market over recent years has pointed to a weakening trend even prior to the 2020 COVID-19 lockdowns, with the 2nd quarter lockdown period increasing the severity of those pressures.
But the key economic source of pressure for the rental market remains "long term stagnation in growth" and a slow pace of households growth in South Africa".
There is no doubt that the lockdown has left many South Africans reeling from a partial, temporary or even permanent loss of income - as a result many tenants will seek to downscale or even co-habitat till they get back on their feet.
But what course of action can landlords take, for those tenants who are unable to pay their rent?
Can you evict a tenant?
While there has been some relaxation of the rules governing the stay of evictions - a sense of humanity and decency are still being called for when it comes to the rental market, advises Attorney Simon Dippenaar.
Under Alert Level 3, eviction orders could be applied for and processed but not executed. Whether or not they can be executed now depends on the wording of the order. Some eviction orders were granted in Alert Level 3 with a stay of execution “until the end of Alert Level 3”. These may be executed. But if the wording was such that the order was “stayed until the regulations permit”, it may be necessary to appear in court to enforce the order.
Any eviction granted now, under Alert Level 2, may not be executed until after the national state of disaster has lapsed or has been terminated. The only exception to this is where the court decides it is not just and equitable to suspend the order. This rule extends to the eviction of occupants from and demolition of shacks, following a spate of land invasions and shack demolitions by the City of Cape Town.
Cooperative Governance Minister Nkosazana Dlamini Zuma said, “A person may not be evicted from his or her land or home or have his or her place of residence demolished for the duration of the national state of disaster unless a competent court has granted an order authorising the eviction or demolition.”
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Rental arrears
South Africans have suffered considerable economic hardship as a result of the national state of disaster and lockdown, which started in March. Many people have been without income, or on a reduced income, for four months, through no fault of their own. The relief offered by the government assistance scheme, TERS, was subsistence at best. It may have enabled families to put food on the table, but not to pay their rent. Therefore many tenants are now owe rent arrears. Hopefully they are getting back to work under Level 2, but it may take some time to accrue enough income to clear their debts.
Provided the tenant has engaged the landlord in good faith to make arrangements to “cater for the exigences of the disaster”, the courts are very unlikely to grant an eviction order purely on the basis of non-payment of rent.
Furthermore, the regulations have declared unfair the imposition of penalties for late payment where the default had been caused by the lockdown or the state of disaster. At most, landlords may charge interest on late payments.
Ubuntu
The regulations also forbid “any other conduct prejudicing the ongoing occupancy of a place of residence, prejudicing the health of any person or prejudicing the ability of any person to comply with the applicable restrictions on movement that is unreasonable or oppressive having regard to the prevailing circumstances.”
We previously recommended that landlords and tenants alike exercise “commercial ubuntu”, that is, compassion and empathy in the current difficult and unprecedented circumstances. We have urged all parties to keep the lines of communication open and make use of alternative dispute resolution methods, before resorting to the courts. The government’s advice also encourages fairness and equity in dealing with the humanitarian challenges caused the national state of disaster.
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Seek advice from a rental housing expert
If, despite the stipulations of the regulations, you have queries or issues regarding tenants or any aspect of rental housing law, or are worried about your current situation speak to an expert.
"We can provide a consultation over the phone or online if preferred. These are stressful times. Don’t let worries about tenant issues add to your anxiety. We can help," says Dippenaar.
For legal property advice email: sdippenaar@sdlaw.co.za
