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How To Evict A Tenant

Tenant Not Paying Rent, Now What?

Landlord-Tenant disputes come in many different shapes and forms but to best explain the process a Landlord could follow when a Tenant breaches the lease agreement, let’s consider the most common scenario where a Tenant defaults on the rental payment of a residential property.

It has long since been established that a Landlord’s tolerance or inaction to late- or non-payment of rental encourages Tenant delinquency. Instead, swift and decisive action is what is needed from the legal-smart Landlord.

 

Is The Tenant Actually In Breach Of The Lease Agreement?

However, before taking any action against a Tenant, the Landlord should first establish if the Tenant is in fact breaching the lease agreement. In accordance with the Consumer Protection Act (assuming it applies), a Tenant has to be in breach of a material term of the lease agreement before a Landlord can place the Tenant on terms and potentially cancel the agreement. Payment of the rent due, for instance, would constitute such a material term. If the term of the contract that has been breached is a condition, it would also constitute a material breach. In another example, the parties can also agree that adherence to the Body Corporate rules is a material term of the agreement. If not specified as such, the Landlord may not be able to cancel the agreement on the basis of the Tenant failing to comply with the Body Corporate rules. It should be evident from the preceding discussion, how a well drafted lease agreement could simplify matters for the Landlord in the event of a breach.

 

What To Do If A Tenant Is In Breach

Once breach had been established, the Landlord is entitled to take legal action against the defaulting Tenant. The action taken should be carefully considered as it could significantly impact on the outcome of the situation. If the Tenant is in breach, the appropriate notices may be served to demand outstanding rent and place the Tenant on terms. The predicament facing the Landlord in the event of a Tenant missing a rental payment, is not knowing whether the Tenant will pay up and continue with the lease (remedy the breach) or has no intention of paying at all and may, at worst, need to be evicted. Fortunately for the Landlord who follows best practice, early action should cover both instances. It is important to note, however, that the lease agreement is not automatically cancelled upon breach by any party. It remains valid and binding until it is either cancelled or terminated.

 

Processing The Breaching Tenant

The options open to the Landlord includes initiating the legal process on his own, without assistance of an attorney, up to the point where litigation becomes inevitable, if at all. With the Tenant confirmed to be in breach, the Landlord initiates the legal process by placing the breaching Tenant in mora (on terms). In many cases this first step is sufficient to avert litigation, if handled correctly. Upon realising that the Landlord is knowledgeable with regards to the legalities of the situation, the smart Tenant is likely to remedy the breach by paying the outstanding rental or try making arrangements to do so.

 

Letter of Demand

A written notice is required to place a contracting party in mora. By serving an adapted Letter of Demand on the defaulting Tenant (to include a mora-notice), the legal-smart landlord places the ball neatly inside the tenant’s court: to remain in breach and face the consequences; or to remedy the breach by paying within the time allowed in the letter.

The number of days required to allow for remedy of the breach would depend on whether or not the Consumer Protection Act (CPA) applies to the agreement. If the CPA applies, a minimum of 20 business days are required, otherwise only 7 calendar days.

If the Tenant still remains in breach after the required period was allowed for, the Landlord can either opt to uphold the lease agreement and claim the rent, or cancel the agreement and if necessary, proceed to evict the Tenant.

Separate courses of action are required for each of these options and the consequences should be carefully considered by the Landlord before taking action. For example, upholding the lease agreement and claiming the rent might be futile if the Tenant is insolvent with no means to pay anything. But even in such a case where a rental claim turned out to be unsuccessful, the Landlord can still proceed to evict although valuable time and money would have been wasted in the process. On the other hand, should the Landlord have opted to proceed with only the eviction (without claiming the rent), perhaps in an attempt to reduce legal costs, he would still be entitled to collect the rent-arrears from the evicted (or vacated) Tenant during or after the eviction process for a period of three years.

Generate your free Letter of Demand (with mora-notice) online.

 

Cancellation Of The Lease Agreement

Since the lease agreement is not automatically cancelled in the event of a breach, the Landlord still needs to cancel the agreement once the period allowed for remedy of the breach (as per the mora-letter) has expired, with the Tenant still remaining in breach.

With the prospect of a possible eviction in mind, the most efficient way to proceed is, firstly, through a mora-letter (as was included with our aforementioned Letter of Demand) and then, after the remedy-period has expired, to cancel the agreement by way of a separate notice i.e. the Cancellation Letter.

On cancellation of the lease agreement, all terms of the agreement are cancelled. Accordingly, the Tenant would no longer be liable for further rental payments [*] and would also not be entitled to occupy the premises. On cancellation, the Tenant might need to be afforded a reasonable time to vacate the premises but since we have placed the Tenant on terms (in mora) in our Letter of Demand, he would have already had reasonable time to make the necessary arrangements to vacate the premises. It would thus not be unreasonable to expect the Tenant to vacate the premises immediately on cancellation of the lease agreement, failing which, eviction proceedings may be instituted immediately.

[*] In the instance where the agreement was for a fixed term and cancellation placed the Tenant in illegal occupation of the premises without any liability of rental payments, the Landlord would suffer damages in the amount equal to the reasonable rental income on the property. The amount payable by the Tenant to the Landlord for this period would not be referred to as ‘rental’ but as ‘damages’. Normal legal action can be instituted to reclaim the damages from the Tenant. Regardless of the provisions of the CPA, these damages (also referred to as a cancellation fee) will be limited to the damages actually suffered by the Landlord. This would seldom, if ever, be for the full remainder of the period of the lease in a case where a new Tenant took occupation of the premises.

N.B. If the Tenant refuses to vacate the premises upon cancellation of the agreement, he will be in illegal occupation of the premises and a knowledgeable eviction attorney needs to be consulted without delay as eviction proceedings needs to be initiated within 6 months from cancellation of the agreement after which a new set of rules come into play which could compromise or at worst, jeopardise the Landlord’s eviction application.

Generate your free Cancellation Letter online.

 

Claiming For Rental And Damages

As mentioned above, the Landlord is entitled to uphold the lease agreement and claim the rental arrears while a claim for damages may also be instituted if loss is suffered. These damages will be all the lost income, equivalent to the monthly rental that would have been due from the day of cancellation of the agreement.

Although not compulsory, a letter of demand would be advisable in some cases since it can set the stage for negotiations relating to the outstanding amount, as well as a possible repayment agreement. Furthermore, it starts the running of interest and provides an opportunity to place the Tenant in mora in case it develops into a situation where an eviction becomes necessary.

Should the letter of demand not have the desired effect, summons must be issued and the normal debt collection process followed. The Landlord bears the onus in the rental claim to allege and prove the lease and the rent outstanding, as well as proving that he has fulfilled all his obligations in terms of the lease. The onus then lies with the Tenant to prove payment, if this is his defence.

If, in the above example, the rental claim was unsuccessful but the Landlord had followed the procedure as suggested above by including the mora letter in the Letter of Demand, he can now still proceed to cancel the lease agreement and initiate eviction proceedings, should the Tenant refuse to vacate the property, without having to start the process all over again.

Read more: Magistrates’ Court Act

 

Reinstatement Of The Lease Agreement

What if, after cancellation, the parties decide to continue with the lease agreement? When this happens, it is imperative that the lease agreement be reinstated formally. It is advisable that a reinstatement addendum is done, which refers to the initial agreement and states that the parties wish to have the agreement reinstated on the same terms as the initial agreement. The addendum must then be signed by both parties, as was the agreement.

A special word of caution on the unintentional reinstatement of an agreement. Here the agreement has been cancelled, but the Tenant remains in occupation of the premises and continues payment of the rental as it would have been due. This would be seen as a tacit agreement and would not necessarily be based on the terms contained in the initial agreement.

It also happens very often that, after cancellation of the agreement, the Landlord continues to deliver invoices to the occupant. On cancellation of the agreement, rent is no longer payable. Therefore, delivery of an invoice for rent is interpreted as an indication that rent is due and that the agreement is accordingly reinstated.

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