Covid 19 Lockdown [Level 4] Property Update.
The Lockdown Rules have changed and are changing almost daily.
Today I have some great news for tenants and landlords in South Africa.
YOU CAN MOVE for 1 month, but it does have important limitations.
Click here to access Neil's latest YouTube update 8 May 2020.
In this short video I go into some detail and discuss the practical outworking of moving..
YOU CAN MOVE !
We have some the limitations and unintended consequences of these movements.
Yesterday 7 May 2020, the government gazetted the following;
The Once off movement of persons and the transportation of goods for the purposes of relocation, commencing on 7 May 2020 and terminating on 7 June 2020. [Click here for downloadable document including the moving application form]
So we have 1 month to move!
Obviously this was a very hasty piece of legislation and there are many unknown factors to consider.
In terms of the ruling you will be permitted a once off movement of persons and goods within South Africa and across inter-provincial boundaries if;
- You signed a lease before lockdown or during lockdown
- You bought or sold a property that transferred before the lockdown.
- You will need to complete a form and obtain a permit from a local Police Station commander
- You will need to have on your possession “the relevant lease agreement indicating the date of expiry of the old lease and the date of commencement of the new lease.”
- (Now obviously not much thought went into this statement, as typically the expired lease would say nothing about the new lease , and neither would the new lease say anything about the old lease. I would imagine you would have to take both leases with you to be safe.
- For a sale move, you would need to have on your possession the transfer documents attesting to the change of place of residence or change of ownership of the property.
What the regulation does not address are the practicalities of these movements.
We need to remember that the movement of people is severely restricted to what is currently allowed under level 4 Lockdown.
All estate agency business and private landlords are not permitted freedom of movement to do anything other than go to the shops or avail themselves of emergency services or work related movement allowable under level 4 restrictions.
- OUTGOING TENANTS:
- Deposit refund: If a tenant moves out, by law the landlord and tenant are to undertake a moving out inspection within 3 days of lease expiry. (This is therefore not possible as neither the Landlord or his agent are permitted the movement.)
- The effect of this is that the landlord will not be able to assess damages and will not be able to refund the tenants deposit until the restrictions allow him the necessary movement.
- Both parties may agree to video and photographs to establish the condition of the premises, but I would advise Landlords not to do so as it would be too easy to hide damages.
- Keys: The tenant will have to use the permission granted in his movement form to return the keys to the owner or his agent. Remember, as long as the tenant has the keys he has possession of the property and may be held liable for rental.
- Lease cancellation warning for tenants:
- If your lease provides you with the right give 1 calendar month’s notice, and you have not done so yet, and you elect to move at the end of this month, you may be liable for the next months rental: Therefore get firm agreement of cancellation costs between yourself and the owner before making any move to avoid any surprises.
- If you use the CPA to give your landlord 20 working days notice of cancellation of your lease, the Landlord will be entitled to “reasonable costs” incurred by him as a result of the early cancellation. The courts or the Rental Tribunal my find that you be held responsible for the landlord’s vacancy costs while he is unable to find a new tenant because of the lockdown. Therefore get clear agreement of cancellation costs before cancelling your lease.
- INCOMING TENANTS:
- Keys: The tenant will have to use the permission granted in his movement form to collect the keys from an owner or his agent;
- Incoming Inspection: The law requires that the incoming property inspection be done with both Landlord (or Agent) and Tenant present.
- My interpretation and solution : As the owner or agent will not be permitted to be present, the incoming tenant will have to conduct the incoming inspection by themselves. I would suggest that you take video and photographs to substantiate any damages to ensure that you are not held accountable for pre-existing damages. I would also suggest that these are emailed to the owner (or agent) immediately to date-stamp the damages.
- TENANT SWITCHING : ie when a tenant vacates and new tenant takes occupation on the same day. How do we handle the incoming and outgoing inspections?
- My recommendation :
- The tenants could do the inspection jointly and send the inspection report signed by both parties to the owner/agent. (But this is fraught, as in my many years of property experience, tenants are not very good at spotting damages or succinctly describing such damage. )
- If both tenants agree to the state to the property, then the Landlord will be able to ascertain ex tenant damages and refund the rental deposit
- However: the incoming tenant takes the risk of not having sufficient experience in these matters and may find himself paying for pre-existent damages that he does not spot or report.
In terms of the Government Notice, you will be allowed to move if you bought or sold a property that transferred before the lockdown.
I have two questions to address on Sales:
- What if the property has not yet transferred but an occupation date had been set?
- My Solution Would be to sign a lease that terminates on transfer of the property and then all that I have just discussed will apply depending on your situation .
- What if you sold a property during the lockdown want to take occupation of the property now before transfer?
- My solution would also be to sign a lease that expires on the date of transfer.
Watch out for a video interview with one of Johannesburg’s top property attorneys, Gerhard Faurie, and we will chat about all the ins and outs of the changing lockdown landscape.
If you have specific questions you want me to ask Gerhard, leave your question below the youtube video and we will be sure to address as many of them as we can.