Landlords Hypothec

In terms of the law, the Landlord enjoys a special protection assisting in the collection of arrear rental from tenants, which is called the "LANDLORD'S HYPOTHEC". Any action taken in the collection of arrear rental is based upon this protection. The hypothec allows the Landlord to sell the movable goods of the tenant (and in certain instances movables of a third party) which are on the leased premises, if the tenant fails to pay the rent.

The hypothec exists from the date of the tenant's occupation of the leased premises, but becomes legally enforceable once a Court Order is obtained. Therefore, prior to a Court Order being obtained, the tenant is free to remove the movable goods from the premises at any time. The Landlord may also bring the hypothec into effect by interdicting the tenant from removing goods from the premises. Thus included in an arrear rental Summons is an Automatic Rent Interdict. Service of this Summons on the tenant brings the hypothec into effect. However, if the tenant removes goods, even after service of the summons, the hypothec basically becomes unenforceable, as until it is perfected by means of a Court Order, the hypothec ceases to exist once the movables are removed from the leased premises. The tenant will have committed an offence in removing the movables, but in reality there is no relief for the Landlord. The police will not get involved, as they consider this to be a civil matter.

There is a way to avoid this situation. Section 32 of the Magistrate Courts' Act empowers the Landlord to attach and simultaneously remove the tenant's movables from the leased premises in security of rent. In effect, the Sheriff serves the Summons and attaches and removes the tenant's movable goods to the value of the arrear rental plus costs. The Sheriff pending finalisation of the action then stores the movables. This obviously secures the rental and costs and also acts as an incentive for the tenant to make payment of the arrear rental immediately, as he will want his movables back.

Section 32 Application

Section 32 requires a formal application to Court supported by and affidavit from the Landlord, or the Landlord's agent, in which, the deponent must state under oath:

 
  • The amount of the rent which is due and in arrears in regard to the premises;

  • That despite written notice demanding payment of rental within 7 days of delivery to the tenant either by registered post, or by hand, such arrear rental remains unpaid; OR

  • That he believes that the tenant may abscond in order to avoid paying the rental due.
 

It must be noted that Section 32 can be quite an expensive procedure as the storage costs of the movables add up very quickly. Depending on the results required, these two procedures, Summons (with an interdict) and Section 32 removal, can be used in combination, or one can simply proceed on Summons alone.