MCademy

“If you think education is

expensive, try ignorance”

The mission of MCademy is to bring relevant property related information to our

business partners in a comprehensible, fun way, free of charge in order to make you more competitive and thereby showing our gratitude for your loyal support. DIRECTOR - TIAAN (MC) VAN DER BERG

University of Pretoria/AFSA

BLCLLBLLM Higher Diploma in Alternative DisputeResolution (Cum Laude)

University of JohannesburgHigher Diploma in Labour Law

Previous Senior Lecturer at University of Pretoria

Framework

1. Background & Conflict2. What governs what3. General requirements for lease agreements4. Incidental terms5. Are certain terms illegal?6. Duties and responsibilities of the Landlord7. Duties and responsibilities of the Tenant8. The impact of an existing lease agreement on an agreement of sale 9. Implied terms of the Rental Housing Act (RHA)10. Diverse aspects11. The Consumer Protection Act (CPA)12. Evictions13. Questions and answers

1. Background

• Before 1 Aug 2000o Common Lawo The Rental Control Act 80 of 1976o The Agreement

• After 1 Aug 2000

o The Lease Agreemento Common Lawo RHA 50 of 1999 + (The unfair Practices regulations)

Endeavour to fulfil Section 26 of Constitution Replaces Rental Control Act Changes Common Law Confers rights & obligations on Landlord & Tenant Incorporates implied terms Rental tribunal Pave way for unfair practices regulations

o Consumer Protection Act 68 of 2008

Unfair Practices Regulations• Regulations promulgated in terms of RHA• Law• Attempt to codify Common Law• Create the wheel as to speak• Introduce standard concepts into lease agreements• Applicable on all lease agreements governed by RHA• Oral & written• Cannot waive• Enforced by the Rental Tribunal

Conflict

  1. No provision - Common Law• Oral - Rental Housing Act & • Written - Unfair Practices Code

2. Lease Agreement overrides Common Law

3. Rental Housing Act & - Lease Agreement Unfair Practices Code overrides - Common Law

4. CPA overrides - Lease Agreement - Common Law

- Rental Housing Act5. Section 26 of Constitution - Lease Agreement overrides - Common Law

- Rental Housing Act - CPA

2. What governs what

CPA Constitution

RHA & Unfair Practices Regulations Lease Agreement

Common Law

Courts

A. Common Law

Residential Lease agreements• Written • Oral

Commercial Lease agreements• Written• Oral

B. Rental Housing Act

Residential Lease agreements• Oral • Written

Commercial Lease agreementsNone

C. Consumer Protection Act

Residential Lease agreements• Written• Oral• If in normal business of Landlord• Not if tenant is juristic person

Commercial Lease agreements

• Written• Oral• If in normal business of Landlord• Not if tenant is juristic person

Ownership versus Rent

2. Rights - Personal- Real

Ownership = most complete real right

3. General requirements for lease agreements

DefinitionA. Consensus B. Contractual capacity C. Legal D. Executable E. Formalities

A. Consensus

I) PropertyDetermined or determinable

Buildings included if not expressly excluded

II) Temporary nature of undisturbed use and enjoyment

Not forever / natural lifespanPer definition – temporaryUse and enjoyment - nothing else

Time

Specific date to specific date (1 Jan 11 – 1 Jan 12)Specific date for a specified time (1 Jan 11 for a year)Specific occurrence for specific time (1 yr after divorce)Specific time to specific occurrence (1 Jan till divorce)Specific occurrence – specific occurrence (divorce–job)Periodic – weekly / monthly / quarterly / yearly

III) Remuneration Nature and quantum

? monetary % percentage of fruit / profitServices ImprovementsZulu vs Van Rensburg 1996 and Jordaan v Verwey

Amount payable• Determined

Rand x per week / month / term / year • Determinable

Rand x + escalation

% percentage of value as determined by 3rd Rand x per square metre

Nominal – donation?

B. Contractual capacity

Natural personsMinors Married In Community of Property

CuratorInsolvent

Juristic entities

CCCompany (RF Companies)Trust

C. Legal

Invalid if against - Statute- Common Law

e.g. Lease residential property for business purposese.g. Payment with drugs

D. ExecutableProperty burnt down a day prior to conclusion of contract & neither parties knew

E. FormalitiesLong term lease agreementShort term lease agreement

Long term lease agreement

>10 yearsIn writing and registeredEnforceability - Parties

- 3rd parties- Creditors- Successor in title

Short term lease agreement

< 10 yearoral / tacit / written – Common LawDistinguish “in writing” - Formality vs. Evidential

Rental Housing ActConfirms oral agreement is valid 5(1)However – if Tenant requests in writing - must be 5(2)Must then contain 5(6)• Name and address in RSA of Landlord and Tenant• Description of property• Rent payable + escalation• Rent due on date• Deposit payable• Period of rent or notice period• Duties and responsibilities of Landlord and Tenant

If list is not complete - Common Law- Unfair Practices Code

• Any other amounts payable e.g. rates & levies

Is CPA applicable? - Comply

4. Incidental termsVarious offer termse.g. - Garden - Carpets

- Domicile- Dogs- Estate Agent

Subject to - RHA & unfair practices regulations - CPA

- Constitution

5. Are certain terms illegal?What happens if certain terms are contra

• CPA• RHA

• Constitution

6. Duties and responsibilities of the Landlord

Source- Common Law - RHA & Unfair Practices Regulations- CPA

1. Make property available2. Maintenance of the property3. Supply of undistributed use and enjoyment4. Compensation for fixtures and improvements

1. Make property available Primary obligationIn condition - as agreed

- at onset of lease agreement- reasonably fit for purpose- habitable - statutory conditions - comply

e.g. Health & Safety- provide services - as agreed- as required

As is - is CPA applicable

2. Maintenance of property

For duration of lease As per agreementFit for purposes rented for

Any obligation on Tenant strict interpretation Inside outside – contractually ? windowsWear and tear goes with maintenanceDamage - by people Tenant is responsible for – not

- Tenant - not Effect within 30 days or as agreed upon

Remedies Specific performance

Cancellation

• Breach of material nature• Reasonable person must not want to proceed• E.g. late occupation – time is of the essence

Damages

• If breach not material

Reduction in rent Non material breach

In relation to reduction of use Common LawIf petty – no reductionExceptio non adimpleti contractus

Can contractually agree Tenant not entitled

Tenant does maintenance self

Reasonable notice to LandlordIf Landlord refuses Common LawTenant can set off against rentSpecific performance in indirect way

Can contractually agree Tenant not entitled

3. Supply of undisturbed use and enjoyment

Must Landlord be owner – No

If Landlord is not owner Landlord must guarantee undisturbed use and enjoyment

If disturbed - Damages- Not specific performance

  Obligation not to disturb Tenant*Landlord self

e.g - Hunt on farm- Unreasonable visits and inspections- Change locks- Terminate services- Terminate access card

Remedies - Interdict (Spoliation)

Not all infringements = breachReasonable inspections At reasonable timeReasonable noticeTo fulfil maintenance obligationTo show prospective tenants / purchasers / bank

* 3rd

partiesLandlord guarantees no one has better titleIf – Tenant must notify LandlordLandlord must defend titleE.g. huur gaat voor koop

4. Compensation for fixtures and improvements3.  

• Consent and undertaking by LandlordMust reimburse Tenant

• No consent - luxuries No remuneration Tenant can remove Common

Same condition as beginning Law No retention

• No consent – necessary improvements Entitled to be reimbursed

Deliver proof

NB. Can be changed in Lease Agreement

7. Duties and responsibilities of the Tenant

1. Payment of rent

At end of term – Common LawOr as per agreement – e.g. monthly / weeklyObligation to pay in time rest on Tenant

RemediesCancellation Specific performanceDamages

2. Proper use of the property

As reasonable man uses ownDamage - tenant

- people tenant responsible for

Use purpose intended for – e.g. house / hostelNot alter property – e.g. garage / bathroomNo alterations or fixtures unless temporary Maximum number of people - unfair practices regulations

Remedies

Interdict (specific performance)Cancellation (misuse = material breach)Damages

3. Restitution of property at termination of the agreement

 • Return property in same condition as onset• with consideration of normal wear and tear• Landlord - cannot refuse restitution

- only claim damages• damages = reasonable repair costs

8. The impact of an existing lease agreement on an agreement of sale

A BOwner / Landlord Tenant

C Purchaser

Obligation - undisturbed use & enjoyment

- Huur gaat voor koop- Rights of Tenant stronger than Purchaser- C can’t evict B- C can enforced lease agreement against B

What to do!

1.Cancel lease agreement A – B

• ? Notice - Lease agreement - RHA - CPA

• By agreement - Lease agreement - RHA - CPA

2.Wait for lease agreement to lapse

• Lease agreement• RHA

3.Cede lease agreement A – C

• C becomes landlord in place of A

9. Implied terms of the Rental Housing Act

1. Written receipto Info

- Property description- Payment for rent / arrears / deposit or other

2. Deposit payable – if agreed upon3. Inspection

- Before occupationList of defectsAttach to lease agreement

- At terminationObligation to inspect togetherFailure by Landlord – no further claims full depositFailure by Tenant – Landlord 7 days inspection

reasonable cost for repairs deduct from deposit receipts balance 21 days

Landlord can claim Items and cost in terms of agreementReasonable costs for repairLost keysIf nothing due by Tenant – 7 days

4. Copy of house rules

5. Costs for lease agreement

6. Cannot waive, may not influence to waive

7. Discrimination

8. Rights of TenantRight of privacy

9. Rights of the LandlordTimeous and frequent payment of rentTo claim unpaid amounts

DIRECTOR

University of PretoriaLLB (Cum Laude), 1999 - 2000University of PretoriaBLC (Cum Laude), 1996 - 1998

SONJA DU TOIT

10. Miscellaneous aspectsA. Sublease

A B C

Second agreement between B and CNo legal relationship A and C B – C no longer period than A – B Is tenant entitled to sublease?

- Common Law – yes- RHA – unfair practises prohibits unless agreed upon

Sublease without permission = material breach

Remedies Cancellation Specific performance

B. Cession

A B

CA cedes rights to CSame agreementNo second agreement

C becomes Tenant in place of B

C. Termination of agreement

1. Fulfilment – Time lapse 2. By agreement 3. Impossible to continue 4. Notice - as per agreement

- reasonable time (payment interval) CPA - if not applicable – no notice

- applicable – notice 40 – 80 6. Cancellation 7. Death

- LandlordNot necessarily terminatedUnless agreed otherwiseHuur gaat voor koop

- TenantTerminated

8. Insolvency- Landlord Not necessarily terminated

Sold subject to huur gaat voor koopUnless other real right e.g. bond

Try to sell subject to leaseIf not enough – free from lease

- TenantNot necessarily terminatedTrustee / curator can choose 3 month rule

D. Renewal of lease agreement

Expressly or tacit“Renewal”

In fact a new agreement Cape vs Zeman 1965

1. Is the CPA applicable to lease agreements?2. What terms & conditions should and shouldn’t be included

in lease agreements?3. Expiry & renewal of lease agreements

1. Is the CPA applicable to lease agreements

Relationships

Landlord – Tenant Rental Agent – Landlord & Tenant

Goods (property) Service in normalleased in normal course of course of rental agent’s business business

Two schools of thought Residential or Commercial properties Not applicable to Tenants who are juristic persons

(irrespective turnover or nett asset worth)

2. What should and shouldn’t the lease agreement contain?

A: The agreement shouldn’t: Section 48

1. Terms or price - unfair- unjust- unreasonable

2. Tenants - waive rights- assume obligations- waiver of liabilities of Landlord

on unjust / unreasonable / unfairconditions

3. Test for unfair / - one sided unreasonable / - adverse to Tenant unjust - false & misleading

representation1. Onus rests on Landlord2. Regulation 44

B: The agreement shouldn’t: Section 51:

Clause null & void – not whole agreement• Defeat purpose of CPA• Mislead / deceive consumer• Fraudulent• Deprive of rights• Avoids obligations• Unlawful conduct by Landlord• Limits liability of Landlord• Assumption of risk

C: The agreement should: Section 49• Plain language• Draw attention to disadvantageous terms

3. Expiry & renewal of agreements

• Maximum period - 2 years• 20 Business days notice - landlord only when in breach

- tenant at any stage – payment of “penalties”

• 40 – 80 days before expiry - landlord notice to Tenant* material changes* extension options

• Automatic extension on month to month basis DIRECTOR

University of PretoriaLLB, 1987 – 1991

University of JohannesburgB. Proc, 1980 - 1985

BENNIE REYNDERS

12. Evictions

INTRODUCTIONCANCELLATION OF AGREEMENTPIE (Prevention of illegal Eviction from and Unlawful Occupation of Land Act, Act 19 of 1998)

PIE is the Act by means of which all unlawful occupiers are evicted, which includes tenancy cases.

RELEVANT ASPECTS

THE LAND

PIE, applies in respect all land throughout the Republic and includes any building or structure on the land in question.

Pie does not apply to:

Commercial property Structures that do not form the function of a dwelling Juristic persons as lessees – except if the land is a dwelling Holiday homes

JURISDICTIONSec 1 Magistrate’s Court or High Court in whose area of jurisdiction the land in question is situated.

LOCUS STANDI

Owners and persons in charge of property Sec 4 (1) and 5 (1)

Landlords, owners, agents, trustees, a curator, executors.

Organ of state may evict persons from any land falling within it’s area of jurisdiction.

PROCEDURE

ACTION OR MOTION?

Action or Motion, depending on facts being in dispute; The word “proceedings” in Sec 4 (1) of PIE includes

proceedings by way of application. Applications may therefore be brought in the Magistrate’s Court without issuing of a summons.

WHO IS AN UNLAWFUL OCCUPIER?

SEC 1 OF THE ACT

In terms of the act persons covered as unlawful occupiers are therefore:

Tenants Defaulting mortgagors Spouses Land invaders and squatters Other unlawful occupiers e.g. Universal partnership

PIE IS NOT A MEASURE TO EFFECT EXPROPRIATION

The landowner retains the protection against arbitrary deprivation of property under Sec 25 (of the Constitution).

PIE cannot be used to indirectly expropriate the landowner. Judge Harmse in the case of Ndlovu vs Ngcobo stated the following:

The effect of PIE is not to expropriate the landowner and PIE cannot be used to expropriate someone indirectly and the landowner retains the protection in terms of Section 25 of the Bill of Rights. What PIE does is to delay or suspend the exercise of the landowner’s full proprietary rights until a determination has been made whether it is just and aquitable to evict the unlawful occupier and under what conditions. Simply put that is what the procedural safeguards provided for in section 4 envisage.

Applications in terms of PIE can however not be

brought ex parte.

Note that when immovable property is occupied unlawfully the “Mandament van Spolie” is no longer available, but

The” Mandament van Spolie” is however still available to unlawful occupiers that are forcefully removed by an owner without a court order.

NOTICE OF PROCEDURE

NOTICE IN TERMS OF SECTION 4 (2)

At least 14 days before the hearing of the proceedings contemplated in subsection (1), the court must serve written and effective notice of the proceedings on the unlawful occupier and the municipality having jurisdiction.

Occupation must be unlawful before commencement.

REQUIREMENTS OF SECTION 4 (2) NOTICE

State that proceedings are being instituted in terms of subsection (1) for an order for the eviction of the unlawful occupier;

(a) Indicate on what date and at what time the court will hear the proceedings;

(b) Set out the grounds for the proposed eviction, and

(c) State that the unlawful occupier is entitled to appear before the court and defend the case and, where necessary, has the right to apply for legal aid;

GRANTING OF ORDER SECTION 4 (6) AND 4 (7)

The relevant circumstances to be taken into account as well as the date of the property is to be vacated and the date on which a warrant of eviction may be executed are prescribed.

The act distinguishes between occupation for less and more than 6 months.

OCCUPATION LESS THAN 6 MONTHS

The court takes into account all the relevant circumstances, including the rights and needs of the elderly, children, disabled persons and households headed by women;

OCCUPATION MORE THAN 6 MONTHS

The court takes into account the above as well as whether land has been made available or can reasonably be made available by a

municipality or other organ of state or another land owner for the relocation of the unlawful occupier.

OPPOSING OF APPLICATION BY TENANT

Parties opposing applications in terms of PIE should adduce facts pertaining to.

Their ages, gender, relationship to one another and to which extent they, or some of them are financially dependent or interdependent;

Their financial positions, sources of income and income and expense statements;

Full particulars of their assets and liabilities;

Full details of their health situation and disabilities, and how these factors may have a bearing on their ability to relocate;

Facts relating to the availability of alternative accommodation;

The date on which they unlawfully occupied the property in question and all surrounding facts regarding the manner of and period of occupation;

All other facts that may have a bearing on their ability to obtain alternative accommodation

PIE AND ESTA DISTINGUISHED

The Extension of Security of Tenure Act protects occupiers that have on 4 February 1997 or thereafter had consent or another right in law to occupy the land in question, as opposed to unlawful occupiers which fall under PIE.

ESTA is applicable only to non-urban land or land in an urban area that has been designated for agricultural use (Sec2(1) of ESTA).

Tenants of non-urban land are to be evicted in terms of ESTA du to the provisions of Sec2(1) and Sec29(2).

Further criteria for the applicability of ESTA:

The land must be rural and not part of a township;

The Person occupying must have had express or tacit consent or another right in law to do so (S1(1). It is immaterial that the occupation later became unlawful for example in the case of a cancelled lease.

The occupier must have an income of less than R5000.00 per month (Regulation GN R1595 GG 18457 of 28 November 1997).

What if an occupier has an income exceeding the prescribed amount? The common law, or PIE may apply. HOUSING RENTAL TRIBUNAL

BACKGROUND

The Gauteng Rental Housing Tribunal was established by the Rental Housing Act of 50 of 1999. The Tribunal is a quasi judical body, which service a regulatory function, in that, it sets out guidelines which have to be followed when parties enter into a rental agreement.

 The Tribunal aims to promote stability in the rental housing sector by resolving disputes that may arise between landlords and tenants as a result of the commission of unfair practices. MISSION OF THE TRIBUNAL

THE TRIBUNAL AIMS TO:

Provide accessible mechanisms to landlords and tenants, which will enable them to resolve their disputes

Provide consumer education so as to educate those in the rental housing sector about their rights and duties

Protect landlords and tenants against unfair practices

FUNCTIONS OF THE TRIBUNAL The Tribunal is vested with rights as accorded to it by the Rental Housing Act 50 of 1999 and the Unfair Practices Regulations promulgated thereto.

The Tribunal performs the following functions:

Resolves complaints through a conciliatory process such as mediation and arbitration;

Offers advice or issues related leases and rentals;

Provides consumer education which is important for informing people about their rights and duties as parties in the rental sector.

THE TRIBUNAL HANDLES THE FOLLOWING MATTERS: Non-refund of deposits

Problems that arise to leases that is not in full compliance with the law

Non-payment of rent

Harassment and intimidation

Eviction without a court order and lock outs

Lack of maintenance to the dwelling

Overcrowding

Exploitative rent and service charges

House rules

The issuing of receipts for rent payments

Service cuts-offs without a court order