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To Pay or Not to Pay: The Rental Debacle during Lockdown

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Shortly after passing the halfway mark of quarantine, President Cyril Rhamaposa announced a further two-week shutdown.  Judging from social media of late, there are some who may cherish the family time, others who are enjoying the cooking and thumbs that have grown muscles from intense and repetitive scrolling through social media.

But the majority of people face real problems.  It’s not a game –  we have two more weeks, we remain at home, we do not pass begin, we do not collect R200.  The implications are huge.  There are grocery bills, there are monthly school fees, vehicle and account repayments, and rent.

The truth is that six weeks without an income means disaster for some, and property owners are often not as accommodating to their tenants as one would hope.  On the flip-side, we have to understand that landlords may also have mortgages and accounts to pay and this means a ripple effect, in which we are all involved in the circle of debt.

I have had a few queries regarding payment of rent and while my first option is always to engage in discussion between the parties in order to arrive at a resolution, should this fail, the next step would be to look at your contract.

It is at this point that you would realise the importance of having had your contract looked at by a professional before your signed it!  The truth is that the fine print is the most important part of your contract – its the size 8 font that can hang you, or it can save you.  It is therefore a no-brainer that the small price you pay for making sure your contract works in your favour is something that will pay dividends in the future – when you need it most.

President Rhamaphosa has cautioned against the use of the ‘force majeure’ contract clause as an escape from paying that which is due.  In fact, it is always in your best interests to pay even a small portion  toward your debts or responsibilities as a measure of good faith as well to avoid you burying yourself neck deep in accumulated future debt.  However, should it be an impossibility to do so, we turn to the contract and the provisions therein.

‘Force majeure’ is a general standard clause that is inserted into contracts to protect the parties from being sued by not performing in terms of the contract on the basis that it was impossible for them to do so.  Most clauses are drafted in either very narrow terms, alternatively drafted very widely and each contract would differ.  This clause usually covers fires, damage to the building, an act of God, impossibility of performance etc.

In many cases, it may be argued that this clause does not cover the eventuality of COVID-19 and there are many questions to determine and which include:

          Has the clause been included in your contract or will the common law principle of impossibility of performance apply?

          Does the clause apply to one or both parties and does the clause require notice to be given of the impossibility of performance

          can the clause result in the termination of the contract should

 

These are just some of the questions that require answers and should an individual decide to rely on it for non-payment, it is essential that you seek legal advice in order to not land up in even deeper water.