Good day We need assistance with mediati...

Asked by Tessa on 18-11-2020 10:58:35
Question posted in the Landlord Tenant Law category relating to KwaZulu-Natal

Good day

 We need assistance with mediating a matter. We are a NPO and we were renting a property during the COVID lockdown period. We gave notice that we are unable to meet our rental obligations and wanted to move as our income was severely affected by covid. The landlords said we are not allowed to break our lease even if we give notice. We therefore stayed another month to try and rectify the problem. After seeing that we would not be able to change the financial situation we moved out and made an agreement to make down payments on the outstanding amount. The landlord wanted us to sign a fixed acknowledgment of debt, which we did not mind doing but we could not commit to a fixed amount. Since then we have been paying them as we can, we have every intention of paying until the debt is settled. They are however now threatening us with going to the papers to damage our name. We are a Christian organization and work with Substance abuse users in our community.

Would you be able to assist in writing a letter to stop them from threatening us? We will keep on paying the debt and want to settle it asap but we are not doing it fast enough according to them.

Information Requested by Lawyer

Posted by Att. Patrick on 18-11-2020 11:06:29

Hi there and thank you for your question,

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.

Please keep in mind that our discussions is for general information purposes only. Our engagement on this website does not create an attorney-client relationship.

Do you mind if I take a moment to review your question? I will come back to you shortly!

Att. Patrick

Information Requested by Lawyer

Posted by Att. Patrick on 18-11-2020 11:08:59

When you say that you are an NPO, is the NPO registered as a company (with a company registration number) or what is the corporate structure? Is it a trust? Or just an unregistered association?

Did you sign an acknowledgment of debt with the landlord with the fixed amount in it? Or wasn't there a fixed amount?

Has the landlord issued a summons for the arrear amount?

Information provided by client

Hi. Registered NPC Company with CIPC.
They supplied us with the Acknowledgement of debt with a fixed amount but we did not sign it as we could not commit to a fixed amount as our Income is not consistent. We did however pay what we could as down payments. They have not issued a summons, just an email threatening us with going to the Newspapers and Social media.

Answer to the Question

Posted by Att. Patrick on 18-11-2020 11:25:26

Okay, so with a registered company you don't have certain protections in the Consumer Protection Act which allow you to cancel a lease agreement on 20 business days' notice. This means that the landlord is most probably correct in saying that you can't simply cancel it. 

But, you can breach the lease (i.e. move out, not pay) and the landlord can then cancel the lease from his side and claim damages from you. The damages are limited to the arrear rental and the lost rental for the balance of the lease agreement. 

BUT, the landlord is under a legal obligation to limit his damages (specifically in relation to the lost rental for the balance of the lease agreement) by finding a new tenant; somebody who is willing to pay the same rental, or a lesser rental, than you. 

Whatever amount the landlord can recover from a new tenant for the remaining term of the lease, must be deducted from your liability to the landlord for the damages. In other words, the landlord can't hold you liable for the balance of the lease but then also get rental from a new tenant. 

So I would caution you from agreeing to that!

All you can agree to is (i) payment of the arrear rental; and (ii) that you accept liability for any shortfall in rental moving forwards, on condition that the landlord mitigates his loss by finding a new tenant.

What I suggest that you do is to continue to refuse to sign the AOD and continue to make payments as best as you can.

If the landlord issues a summons, you need a lawyer to look at it and give you some advice as to whether the landlord's claim has been correctly calculated. 

Then, in relation to the newspaper issue, you should take a hardline approach here and tell the landlord that he must be careful about this tactic because it could be considered to be defamation, which would then give a claim to the NPO for damages, which damages would then be set off against the outstanding rental!

That's about as far as you could take it. 

I, unfortunately, can't represent you directly, and I can't write the letter for you, but if you take into account the above, you should be able to pen something yourself. 

In relation to the defamation, you can also say that if the NPO suffers a financial loss because of the article, then you won't be able to pay him, and you will counter sue for the defamation.  

Answer Accepted

This answer was accepted on 18-11-2020 11:43:19

Information provided by client

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