In recent years, legislation has leaned towards granting residential tenants’ rights and instituting strict procedures for landlords to reference when initiating an eviction.
However, this is not the case for commercial tenants. A commercial tenant is an organisation or an individual who uses the building for non-residential purposes, whether on a residential property or not.
Unlike residential agreements, there is no legislation that specifically governs commercial leases. Therefore, it is essential for a professionally prepared written lease to be in place (signed by both landlord and tenant) to avoid any disputes or misunderstandings.
Cancellation of a Commercial Lease
If a landlord wishes to evict a tenant, they must follow due process. The first step to an eviction is to cancel the lease; either on expiry of the lease or on the basis of a material breach of the terms of the rental agreement in place.
A commercial tenant may be protected by the Consumer Protection Act. If a fixed-term lease is in place, Section 14 of the Consumer Protection Act will apply whereby. In terms of this section, the landlord must give the tenant twenty business days’ written notice of a breach of the lease agreement. Should the tenant fail to rectify the breach within the specified notice period, the landlord has the right to cancel the lease agreement.
However, Section 14 does not apply if the tenant is an organ of the state, in other words, a municipality or a state department, if the landlord and the tenant are both people of the law, once-off leases or if the tenant is a person of the law with a turnover of more than R2 million per year.
The Eviction Process
Commercial evictions do not involve the physical removal of the tenant, but landlords do have the opportunity to claim damages as well as rent in arrears once the legal proceedings have commenced. Generally handled promptly by the High Court or the Magistrate’s court, the specific court may be determined by the lease agreement and the jurisdiction of the Magistrate’s court.
Commercial property disputes are seen as ‘urgent’ due to the property owner running the risk of losing income during the eviction process.
If a tenant is under business rescue, it may prove more difficult for a landlord to start the eviction process.
Occasionally, tenants abscond with their movable property once the eviction notice has been served to avoid settling rent in arrears. If this is a concern on the landlord’s part, it is advisable to apply for an urgent application (before the court) to allow the landlord to attach and to secure the moveable property commonly known as the hypothec. Should the tenant attempt to remove the movable property, it is seen as a criminal offence. However, once the tenant has removed the moveable property the landlord has no recourse or rights to these items.
The official landlord may not necessarily be the property owner. A property management professional or agent may act as the applicant in the eviction process if they have retrieved the property owner’s permission to do so.
Seek Professional Advice
Whichever side of the scale you are on, you need to ensure that a signed agreement is in place reflecting all the conditions and requirements. Contact a lawyer who specializes in evictions to assist you and to guide you through this sometimes-messy process.
