END OF THE FREE RIDE FOR DEFAULTING TENANTS

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INTRODUCTION

Good news for landlords who are struggling with non-paying tenants: our courts have recently held that, under certain circumstances, landlords may lawfully disconnect utilities supplied by landlords to non-paying tenants without first needing to obtain a court order authorising the landlord to do so.

In the past, our courts have held that landlords may not take the law into their own hands by depriving a non-paying tenant of the utilities supplied by the landlord to the leased premises while the tenant remains in possession or control of the leased premises. Faced with the disconnection of its utilities, the non-paying tenant often finds the funds to pay its lawyers to bring an urgent spoliation application for a court order forcing the landlord to restore the supply of the utilities to the leased premises and to pay the tenant’s legal costs. In addition, the landlord may then be faced with a claim for damages.

A spoliation application is a robust and extraordinary summary remedy, brought urgently, aimed at restoring control of property to the person from whom it was taken by unlawful self-help. A spoliation application is used in instances where a person is unlawfully deprived of, or has their possession of property interfered with. Our Courts have recognised rights protected under the spoliation remedy to include not only tangible property (such as a building), but also intangible property (such as the use of a right of way over another’s property).

A person seeking a spoliation order will be required to prove, on a balance of probabilities, that they were in peaceful and undisturbed possession of the relevant property until the unlawful dispossession thereof by the person against whom they are seeking the order.

TWO RECENT JUDGMENTS

In the unreported matter of Velaphi Zungu v Nilgra Flats CC (2017/4419) the Gauteng Local Division of the High Court, Johannesburg was asked to grant a spoliation order on an urgent basis subsequent to a Landlord disconnecting the electricity supply to the residence rented by the Tenant. The Court accepted the fact that the relationship between the parties was governed by a lease in terms of which the residence, in which the Tenant resided, was supplied with electricity. The Court further accepted that the Landlord had terminated the supply of electricity due to the Tenant’s failure to make payment of outstanding rental amounts. The Court found that the Tenant received the supply of electricity from the Landlord purely as a result of a contractual relationship between them. The Court accordingly dismissed the Tenant’s spoliation application, holding that the supply of electricity in such circumstances merely constituted a personal contractual right and did not constitute an act of possession or control of property.

The above logic was confirmed in Eskom Holdings SOC Limited v Masinda [2019] ZASCA 98 (“Masinda”) where the Supreme Court of Appeal (SCA) was called upon to decide whether a spoliation order which had been granted by the High Court, directing Eskom to reconnect the electricity supply to the house owned by Masinda, was justified in the circumstances. The SCA found that Masinda’s right to be supplied with electricity was as a result of her purchase of the electricity from Eskom.  This meant that the rights she enjoyed flowed from a contract of sale which was separate from her right to possession and control of her property. The SCA upheld Eskom’s appeal and found that the Masinda was not entitled to a spoliation order and that the right which she was seeking to enforce was a personal right which could not be enforced by means of a spoliation application.

CONCLUSION

In instances where a tenant’s right to receive a supply of utilities such as water, electricity and wifi is a purely contractual right arising from the terms of the lease agreement concluded between the tenant and the landlord, the landlord may have the contractual right to terminate the supply of those utilities when a tenant has failed to pay for them.  This will depend on the terms of the lease agreement concluded between the parties.

Samantha Frost
Associate
and
Riaan Meintjes
Director
Hayes Incorporated

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