In recent times we have seen an increase in the number of cases involving non-paying tenants. Indeed, many legal firms which run debt collection divisions have seen a marked rise in the number of recalcitrant, non paying tenants with whom they are instructed to deal with. This post addresses the issue of how to deal with non paying tenants.
What the law says
The problems faced by landlords and/or their managing agents are exacerbated by the sensitive issue of housing in South Africa, an issue which the Courts are well aware of.
The courts have to bear in mind that the right to access adequate housing is spelt out by the Constitution, and elaborated upon by a long line of case law. This obliges the Courts to carefully consider legal proceedings where the result may land a defaulting tenant on the street.
Having said that, however, it has also to be recognised that non-payment of rent is a breach of the lease agreement and those guilty of it will in the long run be called on to pay not only the money owing but also the interest on unpaid rents and the legal costs involved, provided this has been covered in the lease agreement.
Some tenants,withhold their rent to try and pressurise the landlord into carrying out certain maintenance, repairs or other tasks that they believe are his responsibility. This kind of action is certainly a breach of the lease where a good lease agreement is in place. Rents have to be paid on the due date no matter how unsatisfactory the conditions of the rented unit.
How to deal with non paying tenants appropriately
So, how to deal with non paying tenants? Frustrated landlords will often be tempted to use strong-arm tactics and threats to make the tenant to catch up with payments. However, these kind of tactics often run foul of the law.
The appropriate way for the landlord to enforce his rights is through the courts. This usually involves two sets of legal action. Firstly, the defaulting tenant can be sued for his rental arrears and, secondly, the landlord can institute eviction proceedings, whereby, once an order is granted by the Court, a tenant can be forcibly evicted by the Sheriff of the Court if the tenant does not leave voluntarily.
Difficulties with this approach
The difficulty here is that the Court process is lengthy and frustrating to landlords, especially the eviction process, which commonly lasts at least three months before a bad tenant is evicted. Where a tenant decides to oppose an eviction application, the process can run even longer.
A tenant who knows that the Courts place a great emphasis on hearing arguments from both sides of a dispute can find a great many ways of delaying an eviction.The good news, however, is that in the vast majority of cases, eviction applications are ultimately successful. The less good news is that during the often lengthy legal processes, the recalcitrant tenant is unlikely to be paying any rents and, as a result of the costs involved in instituting further legal action, these are frequently lost for good to the landlord.
How to protect against getting into the above situation
For these reasons, in-depth credit checks should always be instituted before any tenant is accepted -and if you cannot do this for yourself – and many of us cannot – employ a top agency to do it for you, he says.
It is also essential in today’s market that a deposit equal to one and a half or two months rent is paid in by the tenant before he is given occupation. This can be used to cover unpaid rents and to do the repairs that are almost always necessary once a tenant’s lease expires and he moves out.
If these methods are followed, then it is likely that you will not have to consider how to deal with non paying tenants.
Images courtesy of Stuart Miles and hyena reality at FreeDigitalPhotos.net.