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Rental arrears: is it worth trying to collect?

Jul 13 2019 10:40

Nobody wants to fall into rental arrears, but unfortunately it happens, says attorney Simon Dippenaar.

"Times are tough, and the economic climate isn't forecast to improve for some time yet, so it is all too common for tenants to default on their rental payments," he adds.

"This is a stressful situation for both landlord and tenant, and it must be approached with caution and a full knowledge of the rights of each."

Process

Depending on the specific lease agreement, in general, if a tenant is seven days late with their rental payment, they are then deemed, in the eyes of the law, to be in breach of the lease agreement.

It is up the landlord to inform the tenant in writing of the arrear rental, but the landlord does not have the right to immediately evict the tenant.

Through this official notice, the landlord is giving the tenant the opportunity to resolve the breach of the lease agreement. A landlord can blacklist the tenant with credit bureaux at this point.

In general, if the tenant does not resolve the arrear rental within 20 days, the landlord can consider cancelling the lease, and suing for the arrears.

The landlord may attach the tenant's belongings in terms of the landlord’s tacit hypothec (a form of security recognised in South African law). The landlord can also begin the eviction process.

"A landlord cannot evict a tenant without following the correct legal procedure. For that reason, if a tenant has defaulted on their rental payments, a landlord should obtain legal assistance as soon as possible," says Dippenaar.

Weighing it up

"As with anything in business, it's important for landlords to weigh up the costs and benefits of any action taken. Loss of income through rental arrears is never pleasant, but will the cost of recovering the lost rent be worth the effort?"

If the rental arrears amount is not substantial - for instance between R10 000 and 15 000 - it may not be worth pursuing, in Dippenaar's view.

"This is not to suggest that tenants should get away with not paying their rent. But if the proper procedures are followed - that is the tenant is given a chance to rectify the breach of the lease agreement - and the rent is still not forthcoming, it may be best to begin the eviction process and leave it at that," he suggests.

"The sooner the recalcitrant tenant is off the property, the sooner a new occupier can be found, and the income stream can start flowing again."

simon dippenaar  |  property  |  rentals  |  money
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