Property Law Update: Leases, Remission, and Covid

Property Law Update: Leases, Remission, and Covid

This is yet another judgement dealing with the devastating effect that Covid and the lockdown provisions had on businesses. In this recent judgment, a hotel group, as a tenant, failed to maintain the rental payments and the landlord validly cancelled the lease and obtained an order for the eviction of the tenant. Of note was the Court’s confirmation that, as far as the hotel group’s argument regarding its entitlement to remission of rent was concerned, even if it were found to be warranted, it is not for a tenant to decide the amount thereof and to withhold it. The parties must agree thereto or a Court must be asked to determine the amount.

In addition, and importantly, the Court reiterated that when a lease agreement stipulates that rental is payable at the beginning of a month, this may be indicative of an intention by the parties to contract out of the principle of reciprocity that generally applies to lease agreements. This means that the tenant’s obligation to make payment of the rent is no longer reciprocal to the obligation of the lessor to grant beneficial occupation of the premises. The result? A tenant is then unable to argue that because it did not have a beneficial occupation of the property, it is not liable for the rental.

Read the full judgement here: https://stbb.co.za/wp-content/uploads/2022/11/stbb_plu22-2022_s1.pdf