COLLECTING ARREAR RENTAL – A LANDLORD’S TACIT HYPOTHEC - By Helani van der Merwe

Arrear rent is one of the most common reasons why lease agreements get cancelled prematurely and is a nightmare for most landlords in South Africa. It is a well-known fact that more often than not tenants enjoy stronger protection when it comes to the legal relation between landlord and tenant. Fortunately, landlords enjoy special protection and have a common law remedy available to collect arrear rental from tenants. This remedy is often referred to as “a landlord’s tacit hypothec” and attempts to balance the interests of landlords and tenants.

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The tacit hypothec allows the relevant landlord to sell the tenant’s movable goods present at the leased property in order to satisfy the arrear rental due to him / her. This remedy is a form of real security recognised in South African law and comes into effect by operation of law, regardless if is stipulated in the lease agreement or not. It is however important to note that this right does not accrue to the landlord automatically and needs to be perfected to be enforceable – thereby requiring the intervention of courts either by way of an interdict restraining the removal of the tenant’s movable goods from the leased property or by way of an urgent ex parte court order to attach the movable goods of the tenant.

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The first option available for an aggrieved landlord to perfect its tacit hypothec is to issue an automatic rental interdict summons in terms of Section 31 of the Magistrate’s Court Act, Act 32 of 1944 (hereinafter referred to as “the Act”). This allows a landlord to include in the summons for arrear rental, a notice prohibiting the tenant from removing any movable goods from the leased premises which are subject to the landlord’s tacit hypothec until an order of court is made in this regard. Once a court has confirmed a landlord’s tacit hypothec, by handing down a judgment against the tenant for the arrear rent owed to the landlord, may the sheriff of the court attach the movable goods by compiling an inventory list of all the tenant’s movable goods situated on the leased premises which may not be removed from the premises.

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Such attached movable goods may later be removed by the sheriff and sold on auction to satisfy the rent owed by the tenant. It is important to note however that any aggrieved party may apply to court to set such notice / order aside, after considering all the relevant facts.

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A second viable option available to a landlord is to apply to a court in the relevant district where the leased property is situated, on an urgent ex parte basis for the attachment of the tenant’s movable goods to satisfy the arrear rental amount owed to him/ her. This remedy in terms of Section 32 of the Act is particularly relevant in circumstances where the landlord believes that the tenant may vacate the leased property, thereby removing the movable goods subject to the landlord’s tacit hypothec, without paying the arrear rental due to the landlord.

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If such order is granted, it allows the landlord to instruct the relevant sheriff to attach movable goods of the tenant which are situated at the leased property as security for the satisfaction of outstanding rent due to the landlord. There are two instances when a landlord can make use of Section 32 of the Act. Firstly, if the landlord has demanded payment from the tenant for the arrear rental amount in writing for seven days or more, or if no such demand was made, if the landlord believes that the tenant is going to remove his/ her movable goods from the leased property in order to avoid the satisfaction of the arrear rental due to the landlord.

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Due to the nature of this application, it affords landlords a much quicker remedy for arrear rental, however with greater difficulty to prove. Because this urgent application is bought on an ex parte basis (without the tenant’s knowledge) the landlord will have to give sufficient evidence to satisfy the court that should the movable goods not be immediately attached, the tenant would remove the said goods without paying the arrear rental. Landlords should further take into account that they must give the court security to pay all damages, costs and charges associated with the attachment and removal of the movable goods when such application is brought. Such security must be tendered in advance to ensure that all costs associated with the attachment and removal is accounted for by the landlord in the event that such order is later set aside.

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It is clear from the aforementioned that our law attempts to bring some sort of an equilibrium between landlords and tenants, and that landlords are not left without any remedies in their endeavours to collect arrear rental from tenants. Landlords’ tacit hypothec affords them some protection against defaulting tenants who fails to pay their rent timeously, and if the correct procedures are followed, landlords can collect arrear rental effectively.

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