MANY property owners are battling with collecting unpaid rental arrears owed by defaulting tenants. It is a fact that with the economy in doldrums many tenants are genuinely struggling to keep up with rent payments in terms of lease agreements. The poor economy is not a tenants’ fault, but is also not the fault of landlords. Landlords retain their rights to derive value from their property at all times. They are not legally obliged to provide free accommodation to anyone, not even genuinely struggling tenants.
Rights: MIRIAM TOSE MAJOME
Without payment of rent a lease agreement becomes void as only one party benefits from the agreement. The tenant continues to enjoy their right of occupation while the landlord is prejudiced and enjoys nothing. We have so far discussed the elements of a lease agreement and the obligations incumbent upon both lodgers and landlords. We also dispelled the commonly held misunderstanding that payment of security deposits is illegal. It is not illegal to pay a refundable security deposit, but a non-refundable deposit.
Cancelling a lease agreement
In general, landlords are advised to cancel lease agreements as soon as possible after the first default by a tenant. This means within the following month before the next month’s rent is due. Ruthless though it may seem it is actually best for the tenant. It allows them to cut their losses sooner rather than later. It is not rocket science that if they cannot get rent for one month they cannot get rent for two months or three or four.
The tendency is to be optimistic and let one month’s default become two months then three and before anyone can say Jack Robinson the arrears are running into several hundreds or thousands of dollars. There is no point at all to a lease agreement where rent is not being paid.
With experience, that type of tenant is a typically problem tenant. Instead of cutting their losses, being realistic and moving to cheaper lodgings they use any means to cling onto the property for as long as possible without paying rent. It is not wise for a landlord to tolerate and entertain a tenant while they accrue arrears. It may be deemed as a waiver of their rights in the lease agreement.
In NRZ Contributory Pension Fund vs Sunray Stores HH 85/07 the court held that where a tenant makes a late payment of rent the landlord must as soon as possible before the next month’s rent is due cancel the agreement. Acceptance of subsequent late payments can be deemed as condoning the breach. Where a tenant is in breach it is not necessary to give them the mandatory three months’ notice period. The landlord can cancel the agreement immediately and demand immediate evacuation from the premises. If the tenant refuses to vacate the landlord should immediately set about getting an eviction order.
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Rent litigation
The property market is one of the biggest casualties of any sluggish economy. Many commercial and residential properties in the country are presently vacant and struggling to get tenants. It is typically a tenants’ market because market forces have forced rentals down and many out of their lodgings. Many potential lodgers have benefitted from low cost housing schemes mushrooming all over the country. This is good for low income earners, but bad for landlords and the property market. The challenge is to not only secure a tenant, but a quality tenant who is responsible and capable of paying rent on time and looking after the property so that it maintains its value. This is opposed to the litigious tenant who derives joy from engaging in lengthy legal battles with their landlord and uses and abuses court processes to cling onto the leased property. When a landlord gets an eviction order the tenant appeals and retains the right to continue occupying the property indefinitely until the appeal is determined. This is the type of tenant who rushes to the Rent Board with the intention of being made a statutory tenant. When a tenant becomes a statutory tenant they cannot be evicted until final determination of the matter as long as they are paying the statutory rent set by the Board. Needless to say statutory tenancy is always financially prejudicial to the landlord.
Tacit landlord’s hypothec
The landlord has to be proactive in protecting their rights and ensuring payment of the arrears. The landlord is allowed to attach certain of their tenant’s movable property as security for the outstanding rent obligations by a court order. The attached movable property must be located on the leased premises and is typically household goods or vehicles. The landlord applies for the order without notifying the tenant hence the term “tacit”. If the tenant is notified they will remove their property and the purpose of it being a tacit order is defeated. The landlord can then proceed to institute eviction proceedings with the attached goods serving as security. The tenant cannot remove the goods from the premises because that is a criminal offence. The landlord has a right over the attached property but cannot sell it and should return it when the arrears are paid. The property is only sold in execution if a court order allows it.
The Rent Board
The Rent Regulations Statutory Instrument 32 of 2007 is in terms of the Housing and Building Act Chapter 22:07. It is worth acquiring copies of relevant legislation that impact on everyday living from Government Printers. Regrettably the majority of Statutory Instruments are not yet available online. Rent Regulations are applicable to places of dwelling such as rooms, flats, apartments and other immovable property occupied under a lease. The Rent Board adjudicates disputes between lodgers and landlords. Any aggrieved party to a lease agreement can seek relief. It is not exclusively for lodgers because landlords can equally approach it if aggrieved by their tenants. The board is required to conduct its business informally in as simple and approachable way as possible. It is not bound by the strict rules of evidence and procedure. It is empowered to do whatever it can to bring substantial justice to matters without getting bogged down with technical details and legal propriety.
Approaching the board
It can be by a letter outlining the dispute. The board will set a date for the hearing and notify all parties. At the appointed time and place the parties appear before the board and present their cases and answer to questions posed by board members. Parties may be represented by legal practitioners or any other duly appointed persons. Oral and written submissions are made as directed by the board. Parties in absentia may be represented by proxies as is common for landlords outside the country. If a landlord wins the case at the Rent Board they obtain an ejectment certificate which has to be confirmed as an order by the Magistrates’ Court. If the tenant still refuses to vacate, the Messenger of Court can forcibly eject them. Even after ejectment the landlord can still pursue outstanding rent arrears through other ways provided by the law.
Miriam Tose Majome is a lawyer and a teacher. She can be contacted on [email protected]
