Written for YourProperty

A landlord who lost his property following a series of misfortunes has approached the Property Poser panel about recovering the rental arrears from the defaulting tenant.

The reader let the property to the tenant who, at some stage, lost his job and became unable to continue paying the monthly rental.

The landlord, in turn, also appears to have experienced financial difficulties as a result of his own unemployment and, presumably, the loss of the additional income from the defaulting tenant.

He approached the tenant with a schedule setting out repayment terms of the arrear amount, to which the latter agreed, but this came to nought due to the tenant’s continued inability to pay.

The landlord then approached an attorney for legal advice and incurred further costs, only to be told that it would cost a considerable sum of money to take the matter to finality.

At this point, the reader gave up. This was two years ago.

As a result, his financial position saw him default on the payment of his monthly mortgage bond instalments and the property was repossessed by the bank.

The reader now remains liable to the bank for the shortfall between the bond amount and the amount realised on the sale in execution. He now wishes to know what he can do to recover the amount still owed by the ex-tenant.

Something the reader needs to consider is the aspect of prescription, says Stiaan Jonker of Smith Tabata Attorneys in Port Elizabeth.

“In essence, a claim extending beyond a three-year period is said to have prescribed and therefore lapsed.”

Jonker says any action should be taken prior to this point.

“The threat of eviction is also no longer a possibility as the property is no longer owned by our reader.”

Thus, the claim amounts merely to recovery, which is usually addressed by way of demand followed by summons, says Jonker.
“Our reader could institute this claim himself but it can be tricky for a layperson and will usually require the assistance of an attorney.”

Depending on the extent of our reader’s current financial situation, Jonker suggests approaching the Legal Aid Board for assistance.

Something else to consider, says Susan Chapman from Rawson Properties PE Platinum, is instituting action based on the schedule of repayment the tenant agreed to.

“This will depend on the manner in which the schedule was drawn up, assuming that the undertaking constitutes an acknowledgement of debt.”

It is, however, very important for the reader to consider whether he should proceed at all, says Chapman.

“The judgment he obtains may be ‘hollow’ and potentially unenforceable due to the tenant’s financial situation.”

Chapman says this could result in the repayment taking place in very small instalments over a very long period of time, as and when the tenant is able to contribute.

“This unhappy set of facts highlights an important aspect for landlords. Default by a tenant should not be taken lightly.”

The landlord should look to secure his or her rights by putting the tenant on terms whenever he or she defaults, says Chapman.

“Continued default can only result in an untenable situation that may require extreme steps.”

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