Locked down by law - what tenants and landlords need to know

Zero sleeps to lock-down now, and as the enormity of the stay-home regulations sink in, all sorts of practical questions are surfacing, from where can I walk my dog to “How am I supposed to feed myself with no UberEats?’

In today’s Consumerwatch we focused on one such issue - if you were supposed to move in or out of rented accommodation at month-end next week, what now? 

And what if you can’t pay your rent of bond instalment this month?

So much has happened since we spoke Covid-19 this time last week - confirmed cases now up to more than 700, lockdown from midnight tonight, every restaurant and just about every shop and business closed, and for the next three weeks, no-one’s taking the dogs out…

A week is indeed a very long time in the Covid-19 world.

Since Monday my inbox has been flooded with lock-down related practical queries. Such as: what happens if you were supposed to move into or out of your rented or owned home at month-end next week?

Cape Town-based attorney Marlon Shevelew, who specialises in property law, says the lockdown will make it impossible for either the landlord/rental agent or the tenant to stick to the terms of the rental the agreement they signed.

So everything gets put on hold - moving in, moving out, exit inspections, cleaning units pending vacating it; even evictions.

The Disaster Act regulations prohibit people from moving into or out of residential dwellings during the lockdown, Shevelew says.

“People need to stay put where they are; landlords will not be able to enforce leases as they would in the normal course. If a tenant’s lease ends during the lockdown, the landlord is able to move new tenants in," Shevelew said.

“For the same reason that tenants will not be able to move out, a landlord will not be able to give vacant occupation to new tenants. And what if someone’s income has dried up because of the forced lock-down - can a landlord insist on full pay?"

So can a landlord demand full rental from a tenant even if they’ve lost most or even all their income because of the Covid-19 pandemic?

Shevelew said that would not excuse tenants from meeting their rental commitments in terms of their leases.

On Wednesday Trade and Industry Minister Ebrahim Patel published a special Gazette with exemption regulations that enable shopping mall tenants who are competitors to meet and co-ordinate activities; something which competition law usually prohibits.

The three-week lockdown, forcing the retailers to close for business, will decimate their cash flow.

Only those stores which sell food and basic goods will be allowed to remain open.

The special dispensation will allow the forced-to-close to negotiate with shopping mall owners about relief measures such as payment holidays and rent discounts, as well as limitations on evictions.

The exemption applies to three categories of retailers: personal care functions, restaurants and clothing, footwear and home-textile shops.

I’ve been repeatedly asking the banks what practical relief they are going to give to the many, many people who haven’t been able to earn money because of Covid-19 and they are mostly saying “Please tell people to come and talk to us about payment holidays or debt restructuring". But such relief usually comes at a big interest cost.

I hear that the Banking Association of SA will today announce an industry-wide consumer rescue plan of sorts and I’m really looking forward to finding out what’s being proposed.

To be continued…

Meanwhile, to quote from a tweet posted last night by Nando’s, which never fails to read the nation’s mood perfectly:  “I am because we are. Let’s be compassionate, let’s not spread fake news, wash our hands, stop panic buying and respect the rule of law. We’re in this together and we will make it out the other side stronger than we’ve ever been.”

PS. Don’t stress about invalidating your warranty if you are being forced to miss a scheduled car service during lockdown - the manufacturers are making plans for extensions so that you aren’t prejudiced.

For more details about how the lockdown affects tenants and landlords/rental agents, here’s a link to property attorney MarlonShevelew’s blog on the topic.

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