Seeff breaks down what you need to know about commercial landlord rights in South Africa
From the complexities of landlord-tenant relationships to complying with legal property laws, it is crucial that you understand your rights and responsibilities as a commercial landlord in South Africa today. Failure to understand your rights could jeopardise your property investment, and your reputation, and even land you in legal trouble.
Seeff Property Group will put your mind at ease with these insights into important considerations regarding commercial landlord rights in 2023.
What is a Commercial Landlord?
A commercial landlord is a property owner or management company that owns or operates commercial real estate. Commercial real estate covers everything from office buildings, retail stores, and warehouses. A commercial landlord will rent out these spaces to businesses or individuals who use them for their commercial activities.
What Are Commercial Landlord Rights and Responsibilities?
As a commercial landlord, you have the right to collect rent, inspect the property, evict tenants who breach the lease agreement, withhold the tenant's security deposit for damages and unpaid rent, terminate the lease agreement when it expires, and even determine the length of the lease.
However, bear in mind that these rights must still be exercised in accordance with the law. You must follow the correct legal process before you can evict a tenant.
The specific responsibilities of a commercial landlord in South Africa are outlined in the lease agreement. Common responsibilities that will fall on your shoulders include maintaining the property, collecting rent, providing security, and managing maintenance.
Perhaps most importantly, you are responsible for ensuring that the property is safe and secure for your tenants. This means providing adequate security measures, which could include the following:
- Installing security cameras.
- Hiring security personnel.
- Implementing access control systems.
Commercial Landlord Rights and Collecting Rent
You are also responsible for collecting rent and ensuring tenants pay on time. Landlord or not, you can’t afford to suffer late payments, so it is essential that you have a system in place to ensure that rent is collected promptly.
Note, however, that it is essential to specify your rental agreements with your tenant in the lease agreement before anything is finalised. If a tenant fails to make rent payments, you or your dedicated Property Practitioner should issue a letter of demand to notify the tenant of the breach of the lease agreement.
According to the Consumer Protection Act (CPA), the tenant must be given a notice of at least 20 business days to rectify the breach. If payment is still not received after this period, the lease can be cancelled, and eviction proceedings can be initiated if the tenant refuses to vacate.
Commercial Landlord Rights And Tenant Eviction
The eviction process for commercial tenants in South Africa can be lengthy and complex. The duration can vary depending on the circumstances. However, in general, the eviction process can take anywhere from three to six months.
Read through the following for important considerations regarding tenant eviction:
- The property eviction process must be done in accordance with the law. For example, if a tenant is applying for business rescue and, thus, is using the new Companies Act to suspend legal action, an eviction lawyer can guide through the legal proceedings.
If a business does apply for business rescue and it is believed that the business may, in fact, be rescued, the legal action suspension applies. The landlord may not terminate the lease, evict the tenant, or take action to recover the loss from the arrear rental.
- A tenant cannot be evicted unless the landlord cancels the lease. The lease can only be cancelled if the tenant does not pay the outstanding rent within 20 business days.
Seeff strongly recommends following the correct legal process to avoid significant delays and potential legal liability as a commercial landlord.
Commercial Landlord Rights and Tenant Belongings
In the event of an eviction, the landlord must follow the legal process and provide the tenant with a reasonable amount of time to remove their belongings from the property. A commercial landlord cannot legally keep a tenant's belongings in South Africa.
If the tenant fails to remove their belongings within the allotted time, the landlord may be entitled to sell them to recover any outstanding debt the tenant owes. This is called the “landlord’s hypothec.”
The hypothec only becomes enforceable when a court order is obtained. Before this, the tenant can remove their movable goods from the premises anytime. The hypothec lapses once the goods are removed, regardless of whether the person who removed them was aware of the hypothec.
Commercial Landlord Rights and Giving Notice to Tenants
The notice period for terminating a commercial lease in South Africa is typically three months. However, this can vary depending on the terms of the lease agreement.
It is also possible for the tenant and the landlord to agree to terminate the lease agreement early by signing a written contract outlining the termination terms.
It is important to ensure that the notice is given in writing and complies with the lease agreement's requirements and the law. Failure to provide adequate information can result in legal disputes, which no landlord or tenant wants to face.
Commercial Landlord Rights and The Rental Housing Act
The Rental Housing Act does not apply to commercial leases in South Africa. The Rental Housing Act applies solely to lease agreements intended for residential purposes. The common law and the terms of the lease agreement govern commercial leases.
However, it is essential to note that specific provisions of the Consumer Protection Act may apply to commercial leases.
These provisions require landlords to provide tenants with written lease agreements, disclose any material facts about the property, and ensure that the lease agreement is fair and reasonable.
As a commercial landlord, it is important to understand your rights and responsibilities if you want to ensure a smooth and successful commercial property investment. By staying up-to-date with the latest legal developments and enlisting the help of an experienced commercial property lawyer and a Property Practitioner, you can protect your investment and minimise any risks.
Contact Seeff Property Group today for expert advice on managing your commercial property investment in 2023.
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