Rental Collections

Rental Collection

Definition: Rental collection is the legal process of pursuing the payment of rent which is in arrears.

Rental collection in South Africa now falls under the scope of the Debt Collection Act 114 of 1998 which ensures professional conduct throughout the collection process. The code of conduct applies to landlords and any person who is serving to collect debt from a debtor.

Rent Arrears

Payment of rent is part of the lease agreement which is a legally binding contract. The tenant is obliged to pay their rent in full each month and on the date stated in the lease. Failure to do this is a breach of contract and vindicates legal action in order to remedy the situation.

In order for a period of grace to be applicable, there must be an agreement between the landlord and the tenant within the lease contract which makes provision for such a grace period.

Process of Rental Collection

Letter of demand

Upon late payment the landlord may have verbal contact with the tenant requesting payment. Should the tenant fail to make the payment, the landlord may issue a formal letter of demand in terms of the Consumer Protection Act allowing the tenant a period of 20 days to make full payment. The letter of demand must contain no less than the following:

• Names of parties involved
• The date
• The address of the property
• The amount overdue which includes rent and any other applicable services
• Reference to the breach clause in the lease agreement
• Signature of landlord or agent

Summons

Should the tenant fail to pay within the 20-day period, the legal process may begin and a summons may be issued to the tenant to claim for the arrears. The tenant may be liable for cost of the summons as well as any other legal costs related to the rental collection process which were incurred by the landlord.

Cancellation of lease

Cancelling the lease must be in accordance with a cancellation clause which forms part of the lease agreement. The landlord is required to give the tenant notice of the intention to cancel the lease which states the tenant must vacate the dwelling. The tenant will still be held liable for the payment of rental arrears even once he or she has vacated the property.

Eviction

Should the tenant fail to vacate the premises voluntarily, the landlord may apply to the court for an eviction order. Once again, the tenant remains liable for the payment of arrear rent even after the eviction ruling by the Rental Housing Tribunal of South Africa.

A Landlord’s Hypothec

The landlord’s hypothec serves to provide security against unpaid rent. The hypothec is a tacit which means that it is not necessary for a written agreement between the landlord and the tenant in order for it to come into effect.

Upon obtaining an interdict which restrain the removal or sale of movable goods on the property pending the payment of rent, the hypothec allows the landlord to obtain certain rights on goods on the date that the rent is in arrears.

However, the hypothec is not applicable to goods which have been removed from the property before the hypothec has been perfected.

Van Deventer & Van Deventer Incorporated – Property Attorneys in South Africa

Contact us for professional and efficient assistance with the legal process of rental collection.

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