Rent Agreement Extension During Lockdown

In the absence of a force majeure clause in a lease agreement, the South African common law applies. Under common law, a tenant cannot apply for a rental permit simply because it is economically difficult to pay rent because of the tense economic situation. To obtain, according to general law, a tenant`s decree, the loss of the use and enjoyment of the rental premises by the tenant must be the objective, the immediate and immediate result of the Vis Major s. In addition, the tenant must prove that the event was unforeseen, uncontrollable and the immediate cause of the inability to perform it. If the tenant is unable to use the premises following the closure, the tenant may be entitled to a tenant`s authorization where possible. Since the renewal of existing leases (leasing or license) for the renewal of their “Tenure” is contractually encouraged by the parties, it is possible to extend the duration of expiring contracts for a shorter period of approximately 3 to 5 months, including during the current national freeze. There are also other legal considerations that may affect a potential right to grant a rental licence, such as legislation such as Consumer Protection Act 68 2008 (CPA). The CPA applies to a client (i.e. a tenant) who is a natural or legal person with an asset or annual turnover of less than R2 million.

What is a force majeure clause and what does it look like? A force majeure clause generally excuses the performance of certain exceptional events such as pandemics, acts of war, strikes, lockouts, riots, cyclones, floods, fires, explosions and acts of God. As a general rule, these clauses provide that a party`s inability to meet or comply with the terms of the agreement (due to the exceptional event) cannot be invoked against the party concerned or be considered a violation of the agreement. “We tried a mix and conformity of what works with each owner. Some have practically agreed to extend the lease by three months, in some cases we have opted for a combination of rent-free for two months, but we have extended the contract by two months. Some have agreed to charge us for nothing but higher rent after July. It`s a zero-loss situation for homeowners, because we have to remember that some IMEs have to be used with their rental income,” she explains. As the whole country becomes impossible in a state of gridlock and transfer in these 19 COVID, tenants, housing and student housing companies are all in bargaining mode with landlords and are trying to reach a consensus on extending existing leases until the end of the pandemic. This “relief package” focuses on small, medium and micro-enterprises (SMEs), i.e.

companies with annual turnover of up to R80 million in all sectors, and aims to provide support and support to MMS that cannot operate during the national blockade.

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