Non-Paying Tenants in the residential rental property industry 

Marlon Shevelew of Cape Town law firm, Marlon Shevelew and Associates Inc.

Having an additional property may be a good investment, and you’ll want to maximise the returns on the property. But what can you do as a landlord if a tenant defaults on the payment of rent?

The Cape Jewish Chronicle spoke to local property attorney, Marlon Shevelew (MS), about the matter.

CHRONICLE:  What should a landlord do when a tenant misses a rent payment?

Marlon Shevelew (MS): A landlord should first communicate with the tenant, preferably in writing, to enquire about the missed payment. Whilst this approach is important and keeps things conciliatory, the landlord should also consider formally putting the tenant to terms with a legal letter of demand. This will provide for definitive time limits to pay, as per the lease agreement, and allow for the possibility of the cancellation of the lease agreement in terms of the governing laws.

In that regard, how long should a landlord wait before taking formal action against a non-paying tenant?

MS: The customary time period is approximately 7 calendar days and should be detailed in the lease agreement. One must also factor in the time period for receipt of the demand and, assuming the tenant is a natural person – i.e. an individual person, not a Trust or a Company – (different rules apply if it’s a juristic person), there is a statutory time limit in the Consumer Protection Act of 20 business days from the date of demand before a lease may be cancelled and the occupant told to vacate.

What is an eviction notice, and when can it be issued?

MS: Many people make the mistake of thinking that an ‘eviction notice’ is a magical thing that can be executed upon… It’s often confused with the notice of cancellation and an eviction order. An eviction notice is actually a formal letter informing the occupant that their lease has been terminated, for reasons as contained in the letter of demand, and is sent in terms of the appropriate notice clause of the lease. In short, the letter seeks to inform the occupant that they must leave, failing which a formal eviction application process may be commenced. Depending on whether the lease is terminated during the rental period stated in
the lease or when the rental continues on a month-to-month basis, the tenant would either have to vacate immediately or within a calendar month.

While the process may be done by the landlord him-/herself, there are particular nuances that can determine the success of the process. It is thus better to consult an attorney with knowledge of rental property law – and so avoid failing in the eviction application and having to commence with the entire process from scratch again.

What should a landlord avoid doing when trying to evict a tenant for non-payment?

MS: Landlords should never engage in ‘self-help’ evictions (like changing locks, shutting off utilities, or removing tenant’s belongings) as this actually carries civil and potential criminal consequences. Always follow the legal advice
of an attorney versed in rental property law.

Can a landlord and tenant come to an agreement outside of court?

MS: Yes, landlords and tenants can negotiate an agreement or payment plan to avoid an eviction or legal action for money owing. This should be documented in writing, with both parties keeping a copy. Any indulgences granted to a tenant can be hugely problematic unless there is a firm agreement in place that can be acted upon if the indulgence is abused by the tenant.

A very important point is that if a settlement agreement is to carry real strength, it would be best to have that agreement made an order of court and that can only be achieved if a legal matter has actually been instituted in a court of law.

A settlement agreement that is not an order of court is nothing more than a contract giving rise to the defaulting party being sued for damages or being compelled to specifically perform its contractual obligation/s, whereas a settlement agreement that is an order of court and which is breached, is contemptuous and worthy of court sanction and immediate action. By way of example: if a landlord and tenant agree that a sum of money will be paid and this is incorporated into an agreement, if payment is not made then the landlord can issue summons against the tenant. If, however, there has been legal action instituted already and the self-same agreement has been made an order of court thereafter and it is breached by the tenant, the landlord will have an immediate right to execute upon the order and instruct the sheriff to carry out the necessary attachment of the tenant’s property.

How can landlords avoid potential litigation when dealing with non-paying tenants?

MS: Landlords can:

• Thoroughly screen tenants before renting

• Maintain open communication lines

• Ensure lease agreements are clear and comprehensive

• Always follow the law

• Consult with an attorney when in doubt.

• Published in the November 2023 issue – Click here to start reading.

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