DOES A TENANT STILL HAVE TO PAY THEIR RENT DURING LOCKDOWN?

THE DEFENCE OF ‘VIS MAJOR’, OR ‘FORCE MAJEURE’

We have been inundated with requests for advice on this. Fake news has also been doing the rounds, stating that the government had ‘suspended’ the payment of all rent to landlords. 

This is clearly nonsense.

In a nutshell, Vis Major is a Latin term meaning an event of such magnitude, making the performance of obligations on a contract impossible. 

Such an event must, however, be outside the control of both contracting parties, and will have the effect, where vis major is proven, that contractual obligations are suspended. In some instances, contracts can be cancelled, depending on the nature of the contract.

The underlying principle of our common law as confirmed by our courts

In the Supreme Court of Appeal matter of Transnet Ltd t/a National Ports Authority v Owner of MV Snow Crystal (250/07) [2008] ZASCA  the court held that the following factors must be considered to determine whether or not the defence of force majeure applies:

• The relationship of the parties (e.g. landlord/tenant, seller/purchaser)
• The circumstances of the case (e.g., tenant in occupation and use of rented premises not interrupted)
• The nature of the impossibility (e.g. cannot occupy the property at all for the duration of the lockdown)

Clearly, in most instances, tenants will be in lockdown mode in their rented properties and now is the time that they should prioritise the payment of their rental. 

The fact that their income may have diminished as a result of COVID-19 would not excuse them from paying their rent. Best to negotiate a deferred or reduced payment but it is really up to the landlord to agree to this. 

Should a tenant not be able to move in over month-end during lockdown then clearly such contract would be suspended until such time that they can move in.

Where holiday accommodation was booked over the Easter Weekend for example, and which period falls within the lockdown period, such contract may be cancelled in its totality. The person should be able to claim a refund – unless arrangements have been made to postpone such booking with a full credit banked for the benefit of the holiday tenant. 

In most instances, commercial lease agreements have a provision excluding defences such as force majeure.  This means even if a business cannot operate from the rented premises during the lockdown period, they still remain liable for the payment of their rental and the commercial tenant cannot rely on the COVID-19 lockdown to suspend their rental payments. 

DOES A HOMEOWNER STILL HAVE TO PAY THEIR LEVIES IN AN ESTATE OR A COMPLEX WHERE THE USE OF SUCH FACILITIES HAVE BEEN SUSPENDED?

Levies are payable for the maintenance of infrastructure and the use thereof by homeowners and is usually made up of the infrastructure to provide water and electricity and ‘luxury’ facilities such as the use of swimming pools and golf courses.

The liability to cover these costs arises from legislation, e.g. the Sectional Title Management Act and as such, is a cost arising from co-owning the Common Property. 

As such, the contractual principle of Vis Major would not apply, and trustees are denying access to facilities such as swimming pools and golf courses are doing so in compliance with the State of Emergency regulations and directives by government.