Landlords, tenants and viewings in Covid times
MAIN IMAGE: Marlon Shevelew, director Marlon Shevelew & Associates
In this time of social distancing and other Covid safety protocols, what are the rights of landlords and tenants with respect to access to rental properties for viewings? Different scenarios must be considered.
Recently, I had a situation where landlords on a property were experiencing a challenge as the current tenants were refusing access for viewings. Initially the tenants limited viewings to certain hours on Saturday afternoon and Sunday morning. Then they refused all access saying viewings pose a health risk to their young child. They eventually suggested that the landlords release them from their lease early, then viewings could take place unrestricted. However, this proposal did not suit the landlords as the lease was in place etc.
What are the rights of landlords in such a situation? According to the country’s current legislation, the landlord’s rights will depend on what the factual circumstances are. I will discuss several different scenarios to illustrate this.
Scenario 1: A landlord brings prospective tenants where the tenants could still notionally advise to renew the lease
Often, leases contain a clause which entitles the landlord (or agent) to bring potential new tenants to the property in the last couple of months of the lease, and not before. If the present lease contains such a clause, then any prospective tenants should only be shown the property in accordance therewith. If the lease does not have such a clause, then notionally the landlord could show the property to tenants at any time during the lease.
In terms of section 14 of the Consumer Protection Act 68 of 2008 (“CPA”) between 40 and 80 days before the expiry of the fixed term of the lease, the landlord must inform the tenant of any material changes to the terms on which the lease will continue if it is renewed for a further fixed term or simply continues on a month-to-month basis.
Where the tenant has yet to exercise the decision to renew, terminate the lease on its expiry, or simply let it continue on a month-to-month basis, the landlord is entitled to cater for the eventuality that the tenant elects to terminate the lease, and would therefore be entitled to show the property to prospective tenants.
Scenario 2: The landlord brings prospective purchasers, rather than prospective tenants
If the landlord is not bringing prospective tenants, but rather prospective purchasers, then the landlord should be able to bring those prospective purchasers regardless of how much time is remaining in the fixed term of the lease, provided that access is requested on reasonable notice and at reasonable times. The reason is that, in accordance with the Roman Dutch law maxim huur gaat voor koop the lease would survive transfer of the immovable property. The existence of a lease is therefore no bar to the property being sold. And by implication the lease should therefore also not be a bar to the property being shown to prospective purchasers.
Scenario 3: The tenants have already signed a renewal
If the tenant has already indicated that the lease should be renewed for a further fixed term, then the position would be the same as in the first instance, namely that the landlord should only bring prospective tenants in accordance with the terms of the lease. If the lease provides that the landlord may show the property to prospective tenants only in a certain period before the expiry of the fixed term, then this should be complied with and prospective tenants should only be shown the property in the period before the expiry of the renewal period.
Scenario 4: The tenants have not signed a renewal, but are going to remain in the property on a month-to-month basis
Where the tenants remain in the premises on a month-to-month basis, the landlord will be entitled to show the property to prospective tenants, since either the landlord or the tenants could terminate the lease on one calendar months’ notice at any time. Therefore, the landlord should be able to market the property to prospective tenants.
Scenario 5: The tenants have already indicated that they do not want to renew and that they will not be staying on, on a month-to-month basis
In the situation where tenants have indicated that they do not want to renew the lease for a further fixed term, and that they do not wish for the lease to continue on a month-to-month basis, then the landlord would definitely have a basis to demand that the tenants provide reasonable access at reasonable times on reasonable notice to show the property to prospective tenants.
What is common to all the above scenarios is that the tenants can be informed that they will not be “released” from the contract but that they are entitled to terminate the lease on 20 business days’ notice, in which case they would be liable for a reasonable cancellation penalty.
What about the health risk during the pandemic?
The Alert Level 3 regulations (regulations 38(1)(c)-(d)), as amended on 11 January 2021, state that it will be presumed to be an unfair practice where a landlord or tenant fails to engage reasonably and in good faith to make arrangements to cater for the exigencies of the disaster, as will any conduct prejudicing the ongoing occupancy of a place of residence, prejudicing the health of any person or prejudicing the ability of any person to comply with the applicable restrictions on movement that is unreasonable or oppressive having regard to the prevailing circumstances. The tenants could potentially rely on this to justify their refusal.
Having said that, the mere fact that there may be a health risk cannot mean that the landlord is under no circumstances entitled to access the property. If the tenant is given reasonable notice and an undertaking is given to take the necessary precautions, subject to what has been said above about the various scenarios, then the tenant can be placed on terms and informed that the refusal to provide reasonable access is a breach of the terms of the lease, and that if the landlord is unable to procure a tenant as a result of said refusal, that the landlord will be entitled to recover the loss of income from the tenant by way of an action for damages.
An alternative, more drastic step would be to approach a court for a mandatory interdict to compel the tenant to give access. The legal costs in such an application would likely be substantial, and therefore such an application should be reserved for situations where the rent is extremely high.
About the author: Marlon Shevelew is the director of law firm Marlon Shevelew and Associates Inc. Shevelew is a well-known expert authority on residential property law in South Africa.