Residents encouraged to apply for rental leniency

Residential property companies have urged tenants to seek leniency from paying rent during the 21-day lockdown that may result in payment defaults.

SA is more than halfway through the lockdown imposed to combat the Covid-19 pandemic, which has infected more than 1,749 people locally and more than 1.38-million people worldwide.

Only essential services may operate and South Africans have been ordered to work from home.

Many businesses have lost deals and work as a result of the pandemic and some people are facing salary cuts, while others lose out on wages.

Cofounder of digital rental agency HouseME, Ben Shaw, said no law has come into place that gives residential tenants rental relief and the best option is for them to negotiate with landlords.

“Covid-19 poses difficult questions for landlords and tenants in SA that are uncertain about their rental rights and what is expected of them at this time. Despite calls for immediate rental relief, no such law or suspension of law has yet been put into effect. Therefore we must interpret our current situation in such a way as to uphold SA contract law,” he said.

HouseME, which manages more than 1,000 units via its online platform, said tenants who communicate with their landlords quickly about problems in meeting rental payments can avoid legal hassles. “Notwithstanding potential new information coming from banks with regards to loan repayment holidays, in the case of tenant breach by non-payment, landlords are protected,” Shaw said.

Carel de Wit, CEO of Indluplace Properties, which owns more than 9,900 units, said landlords will tend to help a battling tenant as much as possible rather than losing them.

He said Indluplace was aware that many of its tenants relied on earning cash but had been unable to conduct their businesses, including restaurants, fast food and clothing retailers, which had had to close for the lockdown period, which may be extended beyond April 16 by the president.

“I’m worried about small businesses in SA. These businesses are dependent on cash flow and affect owners’ ability to pay rent. Indluplace already has measures in place if tenants run into problems with rent.

“If the lockdown is a shortterm thing and only April rentals are affected, a fund like ours, with a range of tenants, will be OK. But if it runs into May, there will be challenges.”

De Wit said its units collect between R2,000 and about R12,000 in rent a month. This means that if a tenant has a problem at the lower end, having to pay for a funeral for example, money received at the top end could help smooth the fund’s income so it can continue to deliver returns.

DESPITE CALLS

‘BEST PAYERS’

“Generally, tenants at the lower end are the best payers but they can run into abnormal issues. This remains a normal part of our business and we look at each tenant on a case-by-case basis,” he said.

Shaw said “proactive tenants, who are concerned about their ability to pay their rental, as we all feel the impact of cash-flow constraints in this unprecedented time, ought to request leniency from their landlord or agency”.

By granting a reduction or waiver of rental for a period of time, many tenants will be helped without the landlord waiving their rights in terms of the rental contract.

FOR IMMEDIATE

RENTAL RELIEF, NO

SUCH LAW OR

SUSPENSION OF LAW

HAS YET BEEN PUT

INTO EFFECT