In this discussion, the effect of the Lockdown on residential tenants is discussed. The effect on corporate tenants may have different consequences and the impacts may vary in such scenarios.
The Disaster Regulations which were recently implemented, have the effect that all residential tenants who were scheduled to vacate the leased premises at the end of March 2020 are now prohibited from doing so until such time as the Lockdown has been lifted.
This will have the effect that tenants are not allowed to vacate the leased premises and are consequently not able to take occupation of the new leased premises until the Lockdown has been lifted.
The knock-on effect is that the tenant is not required to pay rent for the new premises and the landlord of the new premises is not able to let the premises to someone else during the Lockdown period.
It is perhaps advisable for landlords who have tenants in the leased premises who are not able to vacate the leased premises to grant monthly lease extensions for the duration of the Lockdown period. The tenant would then be obliged to continue paying rental during any such extended periods. The lease agreement would continue on a month to month basis.
It may be prudent for landlords to consider implementing a lower rental during the Lockdown period to assist those tenants who have previously demonstrated a diligent rental payment history, or to conclude an agreement providing that the difference between the lower rental (implemented during the Lockdown period) and the usual rental that would have been paid in terms of the lease agreement, is repaid over a period of time once the Lockdown has been lifted.
We suggest that any amendment to the terms of the lease agreement or the extension of the lease agreement be properly recorded in writing and signed by the parties.
Landlords and tenants are to proceed with caution and ensure that any written agreement or addendum is recorded in writing and provides for the withdrawal of any indulgence at any time at the instance of either party or for either party to institute legal action if the other party reneges on such agreement.
Rushmere Noach is operating remotely during the Lockdown period and will be available to assist all clients as and when required.
This article is not intended to provide legal advice; it is for general information purposes only and to provide a general understanding of the law. It is advisable that advice relating to the specific circumstances of your matter be sought from an attorney before acting upon the content of this article. This article is written at a particular point in time and accordingly may not always reflect the most current legal developments, legislation and/or judgments which may be applicable from time to time. The author and/or Rushmere Noach Incorporated are not responsible for any errors or omissions in the content.