It is widely acknowledged that the landlord largely gets the short end of the stick when it comes to landlord-tenant law and that more often then not, the tenant’s rights are stronger than a landlord’s right. In trying to bring equilibrium to this issue, our law has a specific remedy for the landlord in order to try and protect the landlord’s right to rental debt owed to the landlord by means of the landlord’s hypothec.
This article is aimed at bringing awareness to the subject of the landlord’s hypothec and specifically how it is practically implemented in our courts.
This article will address the following –
- What the Landlord’s hypothec is .
- How to go about implementing and executing it by means of the Rental Interdict Summons; anD
- Alternative to the Rental Interdict Summons which includes a possible urgent ex parte application in cases where the landlord believes that the tenant may abscond without settling the rental debt.
WHAT US A LANDLORD’S HYPOTHEC?
In South African law, the landlord’s hypothec is recognised as a form of real security much like in the Roman and Roman-Dutch era and has been around for centuries. Real security is defined as the “right over a thing, moveable or immovable, granted to a creditor in order to secure his/her claim against the
debtor”. Essentially, it is security made against a debt incurred by the debtor and as it is tacit it is an accepted part of our law and does not need to be agreed to, for example, in the lease agreement.
RENTAL INTERDICT SUMMONS
The starting point for any landlord should be to pursue the rental debt by means of a rental interdict summons. In this regard, Section 31 of the Magistrates Court Act (“the Act”) sets out the process for pursuing and perfecting the landlord’s hypothec.
A functional aspect of an automatic rental interdict is that it allows a landlord to include in his/her summons whereby he/she claims the outstanding rental owed, a specific notice forbidding or interdicting the unpaying tenant from removing any furniture and/or any effects thereto until such time as the debt is extinguished and/or the landlord agrees to allow the tenant to remove the items. In doing so, the sheriff must take and inventory of the moveable’s at the property which are not allowed to be removed. This is otherwise referred to as the “attachment” process, which later allows the sheriff to only execute/remove any items contained in the inventory list. Items that cannot be attached by the sheriff is among others, the necessary beds or clothing of the debtor, necessary furniture and/or tools used for the debtor’s trade.
In addition to the above, the notice will operate against anyone with knowledge of such notice and can be later set aside by any prejudiced party should the court deem it appropriate after consideration of all the evidence before it.
It is only once judgment has been obtained against the judgment debtor by the landlord, and the hypothec has been “perfected” (or confirmed by the court) will it be permissible for the movables be removed from the property and sold by way of auction.
In the event that the tenant does indeed remove the items from the leases property without the landlord’s consent, the tenant can be held in contempt of court or alternatively even be brought up on theft charges. It is however, important to keep in mind that once the sheriff has removed the items, the storage of these items at the sheriff can be costly and requires the landlord to cover such costs upfront before possibly being reimbursed by the tenant in terms of the cost order at a later stage. Moreover, the auction in itself can also be an expensive stage in the process, sometimes exceeding the value of the goods removed from the premises. It is for this reason that the landlord needs to seriously consider whether it is feasible to try and sell the movables by auction as it could rather be an exercise of “throwing good money after bad money” and in the authors’ experience, more often than not, it unfortunately isn’t.
URGENT EX PARTE APPLICATION TO REMOVE THE ITEMS PRIOR TO JUDGEMENT
The prejudiced party, being a landlord, can simultaneously apply for an attachment order in terms of Section 32 of the Act.
In terms of Section 32, the landlord is allowed to apply to the Magistrates court for the attachment and simultaneous removal of the tenant’s moveable property in security of unpaid rental. The application can be made by the landlord himself/herself on an urgent basis or alternatively by someone on their behalf (e.g. attorney/relative). It is important however to note that the application can only be brought once the landlord has placed the tenant in default and a period of 7 (seven) days or more has lapsed. If not demanded, the applicant and/or landlord will have to prove to the Court that if the property is not attached immediately that the tenant may abscond from the property (or the country) or remove the moveable’s in order to avoid the payment of rental and as such the landlord will suffer damages.
Again, one needs to be mindful of the costs associated herein (i.e. attorney’s fees, sheriff’s costs, auction costs, demand for items) and the landlord needs to prove that there is a reasonable belief that the tenant will abscond or remove the items very shortly.
The benefit of his route is that it affords quicker relief than normally permissible owing to the nature of such an application.
Ex parte is a Latin term which means “sole interested party”. It is an application brought by one person before a court and requires little to no notice to be afforded on the other party. This would safeguard your interests as a landlord as the opposition would not be aware of your intention to attach their property, which would have otherwise afforded them the time and opportunity to conceal, destroy or move the specific items which were to be attached.
Together, these two options afford the landlord with tangible protection leading up to getting a judgment for the outstanding rental and allowing the landlord to perfect the hypothec once same has been received, thus mitigating some of the loss/damage the landlord has sustained. It is important to note, that the success of these remedies is dependant on the specific circumstances you face as a landlord there is no “one glove fits all” scenario and should the landlord wish to pursue their hypothec, an experienced attorney should be consulted.
Written by Anja van Wijk and Kyle Venter