The lessor may uphold the lease contract and claim rent (specific performance ); or Claim cancellation of the lease contract (i.e. cancellation clause); or Claim damages where financial loss is suffered. Most important remedy is the TACIT HYPOTHEC TACIT HYPOTHEC The tacit hypothec is used to secure the lessor’s claim for arrear rent by hypothec over movables. (clause) All movables on the property let (invecta et illata/movables) are subject to the lessor’s tacit hypothec. Movables here includes fruits and crops yielded by the property, whether standing or separated and money found on the premises. There is no reported decision that has yet extended the Hypothec beyond arrear rental and insolvency preference matters. Tacit hypothec applies to the movables of: (a) the lessee; (b) sub-lessee; and
(c) third parties provided that the lessor must perfect the hypothec AND only to the extent of the lessees full arrear rental. The Security by Means of Movable Property Act: places a limitation on the lessor’s tacit hypothec: Section 2(1) (b) movable property to which an instalment agreement applies, shall not be subject to a landlord’s tacit hypothec. This is in line with the National Credit Act. [Explain why?] Tacit hypothec – third party’s movables: 1. Bloemfontein Municipality 1929 AD 266: If goods owned by a 3rd party are brought onto the property with the: (1) knowledge and consent of the owner of the goods, with (2) the intention that they remain (3) indefinitely for the (4) use of the lessee, then the owner of the goods must give (5) notice of their ownership to the lessor, failing which the (6) lessor is unaware that the goods do not belong to the lessee, the third party’s goods will then be subject to the Hypothec.
2. Paradise Lost 1997 (2) SA 815 (D): It was stated that if the lessor by the exercise of (1) reasonable care, could have (2) established that the goods were not those of the lessee but belonged to a third party, the lessor cannot be heard to say that he or she was misled into believing that they were the lessee’s movables. 3. Eight Kaya 2003 (2) SA 495 (T): A lessor is not entitled to perfect his tacit hypothec by simply seizing invecta et illata and if he does, against the lessee’s wishes, the lessor is a spoliator and can be ordered by the court to restore the goods to the lessee. To PERFECT the tacit hypothec over the invecta et illata the lessor is required to obtain a judicial court order, in the absence of such a court order, the movables may be removed by the lessee and the lessor’s security would be lost. Perfecting the tacit hypothec The Magistrate’s Court Act, provides TWO important remedies for the Lessor’s protection: (1) An Automatic rent interdict by issue of summons and operates pending a court order (section 31); (2) An Attachment order granted by the court on application (section 32) – Affidavit must allege that: 2.1 The premises is situated within the courts jurisdiction;
2.2 Rent due and arrears is within the courts monetary jurisdiction; 2.3 A 7 days letter of demand to remedy the breach was issued; 2.4 Lessee intends to remove the movables to avoid payment.
- Fall '18
- Common Law, Lessor