Hi, I have a restaurant in Parkhurst. We...

Asked by LeaseQuery on 19-07-2021 10:05:57
Question posted in the Landlord Tenant Law category relating to Gauteng

Hi, I have a restaurant in Parkhurst.  We're a new restaurant, opened end of Feb 2021.  Things have been a bit hard due to our reserve funds not coming through as yet.  In May, we paid a portion of the rental on 3rd of May and the balance on the 7th May.  All previous payment were on time.  In June, we didn't have the funds to pay the rent and had to make a plan to pay.  The landlord gave us until 3pm on the 11th June to make payment and we unfortunately only managed to pay at 7:51pm that same day.  At 3:25pm he issued us a letter of demand.  July's rental hasn't been paid yet, we have been promised the funds this week so should be able to pay but we received a second letter of demand on the 9th July, giving us 7 days to pay.  We didn't make the deadline of 16th July.  On Saturday 17th July, the locks to the doors at the front of the restaurant were changed, which the landlord didn't inform us of, he did however send us communication that he will be enforcing hypothec as per the lease agreement.  He has also advised that he will be looking for a new tenant but I will still be held liable for the lease and costs.  I just need to know what my rights are, if any and if I'm struggling to pay the rent while the restaurant is operational, how am I going to be able to pay if he prevents me from opening.  I understand the equipment etc is not removable due to this clause, but what about stock, fresh produce, meat etc, can this be removed.  There are some items in the restaurant that were borrowed to me until I can get my own, am I entitled to remove those.  Also, once I make payment this month, can he stop me from trading, have I lost all rights? Thanks

Information Requested by Lawyer

Posted by Att. Patrick on 20-07-2021 09:42:12

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

Answer to the Question

Posted by Att. Patrick on 20-07-2021 09:50:34

The first thing to note is that enforcing a landlord's tacit hypothec as per the lease agreement is NOT the same as changing the locks. What the landlord has done is basically illegal. He is not allowed taking the law into his own hands. He can't resort to 'self-help'. He needs to cancel the lease agreement and then go to court for an ejectment order so that the sheriff can kick you out.

What you are entitled to do is to go to the Magistrates Court now, today, and apply for a spoliation order, sometimes called a Mandament van Spolie (read this article) in order to get you back into the premises. The sheriff will assist you. The important thing is that this application is heard without notifying the landlord. You just go to court. 

This you must do if you want to continue running the restaurant. 

If you don't want to continue, then you'll need to adopt the attitude of "I can't operate if the landlord doesn't perform in terms of the lease and give me the use and enjoyment of the property." In that instance, you could send him a letter of demand saying that he has locked you out and this constitutes a repudiation of the lease agreement and you are giving him until 5pm today to open up again and restore your possession, otherwise you will cancel the lease agreement.

There is some fancy footwork to be done, arguing this or that. Maybe your tacit will need to change if he opens up again. But you have a couple of different ways forwards. Most of it depends on what you want to achieve. 

If there are items on the property which don't belong to you, then they would not form part of the hypothec and the true owners can approach the landlord in order to remove those items.

"Also, once I make payment this month, can he stop me from trading, have I lost all rights?" --> It really does depend on whether he has cancelled the lease agreement, or not. What could happen is that you pay, and then he says 'why have you paid when I cancelled the lease agreement already, but I'm keeping your money.' 

So you need to tread carefully and figure out what the factual situation is before doing anything further. i.e. is there a lease, or has it been cancelled, or what does the landlord intend doing! 

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