How to minimise your loss after a tenant disappears
Your tenants suddenly decided to leave, in the middle of a lease contract, surely you can go ahead and recoup all possible monies owed through selling anything left at your property and find a new tenant to avoid losing any more money, right? Wrong.
Natalie Muller, head of rentals at Jawitz Properties in the Western Cape and Gauteng says that things can get tricky with an absconding tenant.
“You need to issue a cancellation letter terminating the lease and indicating the final date of the lease,” explains Muller. “If the tenant’s furniture remains in the property, you have to make arrangements to store the furniture, but this can be at the cost of tenant. You do have to advise the tenant that the furniture needs to be removed or it will be sold to defer costs.”
Important: You are not allowed to sell the items without a court order.
Your absconding tenant is still liable for performing in accordance with the clauses of the lease and needs to note that even though they have left the property, they need to formally cancel the lease as per the provisions in the Consumer Protection Act. The Act is defined as allowing the tenant the right to terminate their lease agreement with 20 business days’ notice for whatever, as well as, no reason at all.
“This right, however, is subject to penalties and most leases make provision for a penalty that the tenant can be held liable for rental of two to four months depending on the time it takes to find a replacement.” The landlord will have the right to claim the costs involved in finding a replacement tenant, as well as the costs to return the property back to the original state it was when the tenant first moved in.
Landlords need to know that unless the lease with the tenant has been cancelled, an inspection carried out and the absconding tenant notified of the penalties and charges, they cannot allow a new occupant to move in. It is also important to note that any viewings done at the property without the absconding tenant being present, need to be done having given the absconding tenant a notice of the intended viewing. “Even though the tenant has left they still have the right to the lease, pending the formal cancellation,” Muller says.
According to Muller a landlord should consider themselves lucky if a tenant has left occupancy of the property without owing money. If the right processes are followed, the landlord should be able to rent the property within days of finalising the new lease.