How to evict a tenant: Why borrowed goods can be attached by the court
Rent is late…again. As this dreadful month-end ritual unfolds, you can’t help but wonder: Will the rent be paid in full, or at all, this time? If not, what then? Can this situation be resolved? How can it be prevented? Perhaps the most common predicament landlords face when having to evict a tenant is the uncertainty of what to expect and figuring out what to do. In her book, The Landlord’s Guide – Property Rental and Eviction, attorney and MD of SSLR Inc, Cilna Steyn, provides guidance on some of the typical problems facing landlords while providing the legal options available to address them.
Steyn has kindly granted HomeTimes permission to republish her book.
Last time we dealt in detail with the way in which the CPA has changed lease agreements as well as when the Rental Housing Act applies to leases, as opposed the CPA. This time we look at two more acts that directly apply to residential leases, as well as tacit agreements.
Magistrates’ Court Act
The tacit landlord hypothec gives the landlord the right to attach all movable property, brought onto the property, in order to collect arrear rental payments. It is a powerful weapon against a defaulting tenant and can secure the landlord’s claim for payment of the arrear rental. The hypothec comes into existence the moment the tenant falls into arrear with the rental payments. An interdict prevents the tenant from removing the goods which have been brought onto the property. However, even when the tenant is in arrears, the landlord has no real right until the goods are attached by a sheriff. Only upon obtaining a court order, on proof that the rent is in arrears, is the hypothec completed.
Section 32 of the Magistrates’ Court Act
With reference to Section 32 of the Magistrates’ Court Act, it is important to consider a situation where the tenant claims that the movables that are on the property belong to a third party. This was clarified by the Appeal Court in BLOEMFONTEIN MUNICIPALITY V JACKSONS, LTD 1929 AD 266. The court held that it is the duty of the owner of the movables to inform the landlord that the tenant is not the owner of said property.
Curlewis JA said: “When goods belonging to a third person are brought onto leased premises with the knowledge and consent, express or implied, of the owner of the goods, and with the intention that they shall remain there indefinitely for the use of the tenant, and the owner, being in a position to give notice of his ownership to the landlord fails to do so, and the landlord is unaware that the goods do not belong to the tenant, the owner will thereby be taken to have consented to the goods being subject to the landlord’s tacit hypothec, and liable to attachment.”
The practical application of this would involve the issuing of a Rent Interdict Summons, with specific instruction to the sheriff to compile an inventory of all movables at the premises. It would then be a criminal offence in terms of the Magistrates’ Court Act for the tenant to remove any items. Once judgment has been obtained, the attached items can be removed and sold in execution.
CASE STUDY – Magistrates’ Court Act
The tenant of the property is a company, SEI Investments. Although an American family was residing on the property, the tenant was in arrears with rental payments. The movable property on the premises was very expensive and included some Salvador Dali artworks and so forth. Some of these items were known to be family heirlooms of the American family. Without going into detail here, the occupants of the property made it known that they would be returning to the United States upon which the property was attached in terms of Section 32 for an amount of about R1,2m. It must be kept in mind that Section 32 only applies to arrear rental. Therefore utilities, rates and taxes cannot be claimed.
The provisions of ESTA and PIE also only apply to residential leases and specifically set out the rights of the owner of the property (or the person in charge) and the occupiers of the land while defining the eviction process to be followed.
PIE differs from ESTA in that it applies to unlawful occupiers of land. Persons who are occupiers in terms of ESTA are expressly excluded from the ambit of PIE. ESTA applies only to “occupiers” of rural land while PIE applies to unlawful occupiers of land situated in both rural and urban areas.
Comparing ESTA with PIE
Allows for the eviction of occupiers of rural or peri-urban areas, whose occupation was once legal, but is now illegal or deemed to be illegal.
Allows for the eviction of unlawful occupiers of land within the Republic.
Applies to an “occupier” – a person residing on land which belongs to another. An occupier who has (or had) consent to reside on the land on or after 4 February 1997, or who has another right in law to reside on the land.
Applies to an “unlawful occupier” – any person who occupies land without express or tacit consent of the owner or person in charge of the land or without any other right to such land.
Excluding all persons who are “occupiers” in terms of ESTA.
The owner – means the owner of the land at the time and any person who is the holder of mineral rights who has a right by law to terminate a right of residence or to evict a person.
Person in charge – a person who has or, at the relevant time, had, legal authority to give permission to a person to enter or reside upon the land in question.
The owner – the registered owner of the land.
Person in charge – a person who has or at the relevant time, had, legal authority to give permission to a person to enter or reside upon the land in question.
An organ of state – section 6
Interim order to be confirmed
Section 15: The owner or person in charge may make an urgent application for the removal of any occupier pending the outcome of proceedings for the final order. The Court may grant the order if it is satisfied that:
Section 5: The Court may grant the order on an urgent basis if it is satisfied that:
ESTA applies only to occupiers of rural or peri-urban land, whose occupation is, or was, lawful in that they resided on the land with the consent of the owner. Occupiers under ESTA may not earn more than R5,000 per month. The act permits the landlord to terminate the consent on any lawful ground, provided the termination is just and equitable under the circumstances.
Following the termination, the landlord must give two calendar months written notice – to the tenant, the local municipality and the provincial Department of Land Affairs – of its intention to seek the occupant’s eviction.
Occupiers who were resident on or before 4 February 1997 may only be evicted if their conduct has, in some way, been blameworthy and it is they who are responsible for the breakdown in the relationship with the owner-landlord.
With regard to occupiers whose residence commenced after 4 February 1997, the court may grant an order for eviction if it considers it just and equitable to do so, having taken into consideration the terms of the lease, the fairness of those terms, the availability of alternative accommodation, the reason for the eviction, and the balance of interests of the landlord, tenant and other occupiers of the land.
The Magistrates’ Court and the Land Claims Court has jurisdiction to grant orders in terms of ESTA. The High Court does not have the normal inherent jurisdiction, but would have jurisdiction to grant an eviction in terms of ESTA should both parties consent to the jurisdiction of the High Court in these matters.
PIE sets out procedural and substantive requirements that must be satisfied before a court may grant an order of eviction. The procedural protection that PIE affords tenants is that the court must, 14 days before the matter is due to be heard, serve written notice of the proceedings on the tenant and on the local municipality.
WORMALD NO & OTHERS V KAMBULE 2006 (3) 562 (SCA)
Procedure according to Section 4 of PIE, a landowner seeking eviction must prove:
- Ownership of the land in question;
- That the person occupying the land does so unlawfully;
- That the procedural provisions of PIE have been complied with; and
- That, on consideration of all the relevant circumstances, an eviction order would be deemed just and equitable.
Under PIE, a court must grant an order of eviction if the lease has been lawfully terminated and it is of the view that it would be just and equitable to grant the eviction.
Both the High Court and the Magistrates’ Court have jurisdiction to grant evictions under the provisions of PIE. In this instance it is important to note that the value of the property would have no impact on the jurisdiction, however, the value of the occupation would influence jurisdiction.
It is not required from the applicant to predetermine the value of the occupation since this would be something which is to be decided by the Court, on an interlocutory application should the opposing party raise this as a defence. Should a matter be initiated in the Magistrates’ Court and, on interlocutory application, it is decided that the value of the occupation exceeds the jurisdiction of the Magistrates’ Court, the matter will at that stage be transferred to the High Court.
It is important to note that neither the value of the monthly rental nor the value of the total arrears at the time of initiating eviction proceedings would have any impact on the jurisdiction of the Court. Should an interlocutory application be brought to determine the value of the occupation, the court may take into account the value of the monthly rental of the property.
Locus standi under PIE
Locus standi refers to a person’s right to approach a court for relief or to be heard by the court on a specific matter.
The owner of the land
The registered owner of the immovable property will always have the right to initiate eviction proceedings against an unlawful occupier of his/her property. This right can also vest on the executor or the curator bonis of the owner.
Person in charge of land
This person is defined as: “a person who has – or at the relevant time, had – legal authority to give permission to a person to enter or reside upon the land in question”.
This can be a person acting as an agent on behalf of the owner. An agent in this instance refers to a person who holds a power of attorney from the owner and does not refer to an estate agent who rents the property out on behalf of the owner. The person in charge can also be a tenant who sub-leases, and in an instance like this, the tenant would have the right to initiate eviction proceedings against the sub-tenant.
If any of the above persons are cited as the applicant, it is advisable that the owner should be cited as well, to avoid any doubt regarding locus standi.
Locus standi becomes a contentious issue when it comes to property sold in execution by the Sheriff or on an insolvency sale since the majority of these sales give the purchaser occupational right “on the fall of the hammer”. This appears to be sufficient to conclude that the purchaser is the person in charge of land, but until such a time that the property is transferred to the purchaser, the purchaser would not have locus standi. This position was confirmed in RED STRIPE TRADING 68 CC V MAHLOMOLA AND ANOTHER (2011/06)  ZAGPHC 39.
An organ of state
According to Section 6, an organ of state would have locus standi in any eviction proceedings within their jurisdictional area MANGAUNG LOCAL MUNICIPALICTY V MASHALE AND ANOTHER 2006 (1) sa 369 (O).
SECTION 26 OF THE CONSTITUTION AND MUNICIPAL OBLIGATIONS
CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY V BLUE MOONLIGHT PROPERTIES 39 (PTY) LTD AND ANOTHER  ZACC 33
In this case the court decided that evictions of unlawful occupants could take place if the eviction was just and equitable. The court took a number of factors into consideration:
- Whether or not the occupants lived on the land for a long period of time;
- Whether or not the occupation was once lawful;
- Whether the applicant was unaware of their presence when it purchased the property;
- Whether the applicant was at risk of being homeless if the eviction was delayed.
The court also considered whether or not there is an obligation on the city to provide temporary emergency accommodation to the occupiers. The court rejected the city’s argument that the National Housing Code does not oblige it to self-fund the provision of temporary emergency accommodation.
The court looked at the reasonableness of the city’s policy to give alternative accommodation to occupants in hazardous buildings, but to not provide housing to people evicted out of a privately owned building and who would otherwise be homeless. In this regard the court deemed the city’s policy unreasonable and the court was not persuaded that the city did not have sufficient funding.
PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA AND ANOTHER V MODDERKLIP BOERDERY (PTY) LTD; TD (CCT20/04)  ZACC 5; 2005 (5) SA 3 (CC; 2005 (8) BCLR 786 (CC)
It was decided in this case that the state does not have a duty to step in and assist the landowner in protecting the property against unlawful occupation, especially where the sheer magnitude of the occupation or the circumstances of the occupiers would make the possibility of a successful eviction worthless.
(Important: See comments in the previous story regarding the implications of the Rental Housing Amendment Bill for tacit agreements)
Agreements can be entered into without a single word being said by either party. This is called a tacit agreement. A very good example of a tacit agreement does not relate to leases, but it explains the principle.
Scenario 1: A person enters a store and takes a loaf of bread from the shelf, places the bread together with a R10 note on the counter. In return, the cashier accepts the R10, places the bread in a plastic bag and provides the purchaser with a till slip. The purchaser takes the bread and leaves the store without either one of the parties exchanging a word. Rude as it may be to not say a word in this scenario, a relatively complex agreement came into being. Firstly, the cashier had authority to sell an item that does not belong to him on behalf of the owner of the item. Secondly, the purchaser tendered payment of the purchase price; in return, he expected delivery of a specific item that would fulfil a specific requirement, which has been warranted by the seller. For instance, if the bread appears to be mouldy by the time the purchaser opens it at home he would be well within his rights to return it to the store and request a full refund on his money or replacement of the item.
In a scenario like this, it is clear that even something as commonplace as buying bread has complex law attached to it. This is even more so in cases that are relatively more legally complex, as in the case of lease agreements.
It should be kept in mind that since tacit lease agreements are not fixed-term lease agreements, the CPA does not apply in these circumstances. Should the lease agreement, for instance, expire on a specific date and both parties act as if they are content that the tenant should remain in occupation of the property, provided that he continued his monthly rental payment, then a tacit renewal of the lease agreement is concluded. This agreement will continue on a month-to-month basis subject to the same terms and conditions of the initial written lease agreement. This is in accordance with Section 5(5) of the Rental Housing Act which will apply on termination of the lease agreement.
Scenario 2: A person buys a property where the previous owner does not vacate the property on registration. He instead remains in occupation and starts making monthly payments in an amount that would be considered reasonable rental on that specific property.
In this case, an entire lease agreement comes into being, without any written or verbal agreement regarding the terms of the lease. This is a typical example of a tacit lease agreement. It would be harder to prove the terms of the agreement, but this agreement would be no less enforceable than a written agreement.
The concept of a tacit lease agreement is very relevant when it comes to the cancellation of lease agreements and evictions following the cancellation. A lease agreement can be reinstated tacitly, should the lease be cancelled but the landlord accepts further rental payments without clearly indicating that such acceptance is in respect of damages and not in respect of rental. In this regard, it is unwise to continue the issuing of rental invoices when requesting rental payments after cancellation of the lease agreement.
Last time: How the CPA has changed the notice period
Next time: How to draft a water-tight lease agreement
Who is Cilna Steyn?
Cilna Steyn, MD of SSLR Inc, completed her LLB Degree at Unisa, after which she was admitted as an attorney in 2007. She co-founded Steyn & Steyn Attorneys, where she began specialising in evictions.
She regularly presents training sessions, where she advises groups of rental agents and private landlords on matters relating to landlord and tenant disputes and broader scope property law-related matters. She also acts on the panel of experts for the Law Society of South Africa’s Legal Education and Development. She presents seminars on behalf of LSSA: LEAD, educating attorneys nationally on eviction procedures and rental claims. She is one of the drafting attorneys of the TPN (Tenant Profile Network) Residential Lease Pack.
Cilna authored The Landlord’s Guide – Property Rental and Eviction in 2015 and regularly publishes articles in newspapers and peer-review magazines. She also appears on television and radio, participating in discussions relating to property law and, in particular, evictions. As the managing director she is dedicated to leading SSLR Inc in accordance with its core values.
Cilna is passionate about property and understands the pressures of being a landlord. Her attention to detail and knowledge of property law makes for efficient evictions.