LEGAL
Day Zero for Rental Market
Landlords take note
BY CILNA STEYN
W
ith the Western Cape ’ s Day Zero fast approaching , the rental market is left with some uncertainty regarding the legal position of landlords and tenants affected by this crisis . Would landlords be required to provide water to tenants ? Would tenants be required to maintain a property including gardens , drains and the likes without water available to them ?
A severe drought like this , is in terms of South African Common Law , Vis Major or an Act of God . South African Common Law is based upon Roman Dutch Law , which is shaped and refined in our Courts by case law . The principle of Vis Major ( Act of God ) indemnifies parties against claims by one another for damages suffered as a result of an Act of God . This principle will always find application in lease agreements .
In rental agreements where no written lease agreement was concluded , in other words a verbal or tacit lease agreement , this principle will automatically contain this protection for both parties . The drought would not allow the tenant the opportunity to cancel the lease agreement or claim damages from the landlord or due to failure to supply water to the premises . The same principal applies to the landlord , this will mean that a landlord will not be allowed to cancel the lease agreement , have a tenant vacate or not allow a tenant to take occupation of a premises because of the drought .
In the majority of written lease agreements , this principle will be dealt with at length . The typical lease agreement will clearly indicate that no Act of God can give rise to a claim against either party . This would have the effect that the tenant would not have the right to cancel the lease agreement because of the landlord ’ s inability to supply water due to drought . An example of this would be a tenant deciding to cancel a lease agreement in Cape Town in order to relocate . If , however the lease agreement is governed by the Consumer Protection Act ( CPA ) the tenant would in any event be entitled to cancel the lease agreement with 20 business days ’ notice and then only face the reasonable cancellation penalty , as contemplated in the CPA . The drought would not give the tenant grounds to cancel the lease agreement , without penalty .
In terms of a lease agreement the landlord has an obligation to provide the tenant with undisturbed use and enjoyment of the premises , water supply to a premises is incidental to occupation , for this reason the landlord would never be allowed to limit water supply to a premises . However , in a case like this where the reason for not supplying water is a result of an Act of God the landlord cannot be held responsible for the lack of supplying the service . It is essential to carefully consider the terms of the lease agreement regarding this aspect and not make any assumptions .
This position is simple enough in lease agreements where the tenant pays utilities billed separately , as this would simply mean that the amount billed by the municipality for water would be less , as the water consumption is less due to the drought - as such not affecting either party in that regard in any way . However , a landlord is not entitled to receiving payment for a service that is not supplied .
This would be the position where a lease agreement provides that water and electricity forms part of the rental payable and not metered separately . If the amount paid to the landlord can clearly be quantified for the portion of water supply , that amount should be reduced to reflect the true water consumption by the tenant . If the amount that is paid for water consumption , cannot clearly be quantified , but simply forms part of the rental amount this could lead to disputes that could run into very costly and time-consuming litigation .
In the face of a natural disaster , as currently present in Cape Town , the principals of fairness and equity would prevail above all else . In cases where water is included in the rental and cannot be quantified specifically , the suggestion would definitely be for the landlord and the tenant to consider this , have a meaningful conversation regarding this and find an amicable solution that would be fair to both parties .
Neither one of the parties can rely on a damages claim , as the other party would definitely have the defence of Vis Major and could lead to thousands of unnecessary court or tribunal cases creating undue pressure on the legal system .
30 MARCH 2018 SA Real Estate Investor Magazine