REALITIES OF EVICTIONS AND RENTAL RECOVERY

For many property owners and landlords, nothing causes frustration like a tenant who stops paying rental. Usually, a landlord’s first thoughts and natural instincts are to evict the tenant and recover whatever arrear rental amount that is due to them. Although these steps are legally correct and the landlord has every right to take action. However, recovering arrear rental while pursuing an eviction requires due consideration and is often more complicated than it looks in theory. 

Eviction vs. Rental Recovery

The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE)governs the eviction process in South Africa. The PIE Act requires that due legal procedure needs to be followed by landlords before a tenant can be lawfully evicted from the property. While awaiting the eviction court order to be granted, bond repayments, municipal rates, and levies unfortunately do not stop, which often leaves landlords in a very uncomfortable position. This forces the landlord to recover the rent due to them while the rental proceedings are ongoing through a debt collection process, notwithstanding that the eviction process involves its own legal costs.

While a judgment for arrear rental can certainly be obtained with not much difficulty, executing on the judgment, which involves the actual recovery of the arrear amount, is often another story altogether.

The tenant must at least be in possession of assets that are attachable and a steady income, and if no such assets nor income are available, the costs of enforcing the judgment can outweigh the potential recovery. In many instances, landlords end up with a judgment, although legally valid, but the practicality of enforcing the judgment brings great difficulty.

When Eviction Is the Only Viable Option

At times, finally cutting your losses and regaining possession of your property is the most practical solution. Once a tenant has vacated the property, a landlord can finally focus on securing a new paying tenant and restore their rental income stream once again.

Pursuing the arrears in contrast, can lead to months of litigation and expenses such as attorney and sheriff’s fees, with very little to no return if the tenant has no assets or secure income to execute against.

This doesn’t mean that a landlord should give up ever pursuing unpaid rental but this decision should be strategic and they should largely be guided by a tenant’s financial position and value of the rental amount due.  

Tenant Due Diligence

The best advice to landlords to at least minimise the occurrence of such situations is to always conduct background checks before entering a lease agreement with a tenant. Landlords should prioritise verifying bank statements, conducting employment checks, reference checks from previous landlords or even dive deeper where foreign nationals are involved. This can greatly reduce the risk of future non-payment or the headache of legal battles with little prospects of executability.

Conclusion

Legal rights must always be weighed against commercial viability. Although debt collection seeks to recover rental income lost by a landlord, however, not every situation requires and this decision is guided by the tenant’s financial position and circumstances.

Disclaimer: The above should not be accepted as legal advice, and you are encouraged to seek legal advice.

Prepared by Khanyisile Mabunda