Commercial Evictions

Commercial Evictions are done either through the High Court or the Magistrates Court. In the Magistrates Courts the process will follow the route of a summons being issued, while in the High Court one has the election of either proceeding with a Summons or an Application. The benefit selecting the Application procedure is that it is usually finalised much faster, granted that there are no disputes of fact in the case.

It may sometimes be useful to split the claim for arrear rental and damages from the claim for eviction as the eviction claim could be finalised much quicker. The number one priority in most evictions is to eject the tenant from the premises so that new suitable tenants can be placed, returning the property to profitability.

General Notes on Commercial Evictions

Commercial Evictions are regulated by the common law and is not influenced by PIE or ESTA. A typical commercial eviction is the ejectement of persons from office space, retail space or industrial space. In determining whether an eviction falls under Residential or Commercial, one must have regard to the use of the property. The zoning of the property and the entity of the tenant does not assist in making this determination as only the actual use is relevant.

A further issue that must be determined is whether the Consumer Protection Act (CPA) has any bearing on the Lease Agreement. Certain tenants under the CPA may have extended time to remedy any breach of the agreement, and may even have the right to terminate a fixed term lease with 20 business day’s notice. Other tenants may be excluded from the CPA.

Under the new Companies Act a company may apply for business rescue if it finds itself in a position where it cannot satisfy the demands of creditors, but has a reasonable belief that the business could be rescued. In such a case a moratorium is placed on all legal action, which means that the Landlord may not thereafter terminate the lease, start eviction proceedings or take any action to recover arrear rental while the company is under business rescue. While it is accepted that business rescue proceedings allow some businesses to return to profitability, it is often employed as a delay tactic to prevent creditors (such as landlords) from taking legal action against them and evicting them. It may be suitable in some circumstances to either co-operate with the Business Rescue Practitioner in restoring the business, or it may be feasable to approach the High Court to set the Business Rescue aside, depending on the specific circumstances. The effect of Business Rescue on the Landlord could be fatal, especially if the property in question is bonded and the Landlord does not have alternative means of making the bond payments. The Business Rescue proceedings will delay all enforcement action by at least 3 months, but in practice this often takes much longer.

When dealing with Commercial Evictions, knowledge of Insolvency law may also be necessary. In the event that a tenant liquidates, the Landlord must determine whether it will be in its best interest to lodge a claim with the liquidators. The claim may either be limited to the amount of the security held by the landlord (Legal Hypothec and Guarantees) or it may be feasable to extend the claim to the full amount. The Lanlord must however exercise caution in extending its claim into the concurrent domain as it may result in a contribution being payable to the administration costs of the Liquidation.

Effect of a sale on the mandate

Effect of a sale on the mandate

The effect of a sale on a management mandate agreement Is the purchaser of a property with a tenant in the premises duty-bound to perform in terms of the former landlord’s obligations towards the lease agreement, or in terms of a mandate in the case of a management mandate agreement? The lease agreement remains in […]

Court Dates

Court Dates

Obtaining court dates from the High Courts in Lockdown Level 1 As much as we, as legal practitioners, have got used to attending to court virtually and working with the new online court system, called CaseLines; the legal profession is still experiencing extreme difficulties. The latest court directives allow us to issue new proceedings at […]

RHA vs huur gaat voor koop

RHA vs huur gaat voor koop

 Does Section 4(5)(c) of the Rental Housing Act contradict the principle of huur gaat voor koop? The legal principle of huur gaat voor koop was established within Roman Dutch Law and has, since the adoption of Roman Dutch Law as the foundation of the South African legal system, been one of the cornerstone principles governing property […]

Property Rental – Level 3

Property Rental – Level 3

Why were these regulations declared unconstitutional by the High Court? What does this mean? On 2 June 2020 the High Court handed down a judgement in the matter of De Beer v COTGA. News of this judgement spread in the media and on social media like wildfire, with headings like “Lockdown Regulations Unconstitutional”; as much […]

Evictions During Level 4

Evictions During Level 4

LEVEL 4 REGULATIONS ON EVICTIONS The Alert Level 4 Regulations were released to the public explaining exactly what Level 4 will entail for the South African public. One of the regulations, specifically Regulation 19, deals with the prohibition of evictions and has a big effect on our property industry. The Regulation reads as follows: A […]

Withholding Rent During Lockdown?

Withholding Rent During Lockdown?

No regulations of any kind have been implemented to authorise tenants to refrain from paying rent. The global pandemic brought about by the COVID-19 virus has thrust South Africa into one of the most unfamiliar and uncertain times in our history, the likes of which never before experienced. Government has, in response to the virus, […]

Free Legal Advice

We post highly relevant property related legal advice and information on our blog and newsletters. Subscribe here to get notified via e-mail.

Free Legal Advice

Thank you! Check your inbox (or spam folder) to confirm subscription!

Shares
Share This