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A Landlord’s Guide to Evictions: Part 2: Recourse after lawfully cancelling a lease agreement

Part 1 of Barnard Inc.’s ‘A Landlord’s Guide to Evictions’ unpacked the way in which a landlord can lawfully cancel a lease agreement.

Once a lease agreement has been lawfully cancelled, the landlord may have various forms of recourse against his/her previous tenant.

In many instances, the tenant will unlawfully remain on the property. In legalese, the tenant is no longer referred to as a ‘tenant’ but rather as an ‘unlawful occupant’.

Claim for arrear rental 

The landlord may have a claim for any arrear rental payments still due by the unlawful occupant as well as any other amounts owed in terms of the lease agreement before the date of cancellation e.g., water and electricity. A claim for arrear rental is, in most instances, a straightforward contractual claim as it was agreed between the parties that the tenant would pay rental and other amounts on a determined date.

It is important to note that in most instances, claims prescribe three years after becoming due and payable and it is critical that landlords ensure that their claims, especially for arrear rental, are brought timeously and within the three-year period.

Claim for ‘holding over’

The landlord may have a claim for what is referred to as ‘holding over’ where a tenant remains in unlawful occupation of the leased premises without making any further payments after the lease agreement was lawfully cancelled by the landlord. The landlord is prevented from concluding a new lease agreement with a new tenant until the unlawful occupant vacates the premises.

This claim is based on the damages that a landlord suffers during the period that the unlawful occupant remains on the property.

In calculating these damages, the ‘rule of thumb’ is that the market-related rent payable for similar premises should be considered. However, often the now-cancelled lease agreement already, unbeknownst to the parties, makes provision for this scenario and it is usually worded as follows:

In the event of the Landlord cancelling this agreement and the Tenant remaining in occupation of the Leased premises after such cancellation, the tenant shall be liable for damages for holding over in the amount equal to the rent payable in terms of the agreement at such time of cancellation”. 

There is no way of telling at what stage an unlawful occupant will vacate the premises, bearing in mind that they may not be evicted from a leased premises without a court order. This means that the calculation of the exact amount of the claim for ‘holding over’ will be problematic seeing that the unlawful occupant may remain on the premises indefinitely. For this reason, the claim for ‘holding over’ can be instituted together with the claim for arrear rental and amended at a later stage once the unlawful occupant has voluntarily left the property due to a court order.

Applying for an eviction order

A landlord can apply for an eviction order via the court when the unlawful occupant refuses to vacate the property. Irrespective if the lease agreement is for a residential or commercial premises, the Prevention of Illegal Eviction from the Unlawful Occupation of Land Act, 19 of 1998 (PIE Act) may find application on these grounds.

The landlord needs to make sure that the premises is unlawfully occupied and inform their attorneys accordingly. Should the PIE Act apply, the process that needs to be followed is prescribed in terms of this Act and proper compliance is essential for the effective and efficient eviction.

It is essential for the landlord to institute evictions proceedings as soon as possible to mitigate financial losses. In South Africa, no person or entity may be evicted from a leased premises without a court order.

The intricacies of an eviction in terms of the PIE Act will be discussed in Part 3 of this series.

This guide was authored by the Senior Associate, Johan du Toit, and Associate Wilco du Toit of Barnard Inc.

For tailored property law assistance, please contact Johan Du Toit to arrange a consultation – johan@barnardinc.co.za / 012 001 2739