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The eviction process, both commercial and residential, are typically challenging to resolve and require legal intervention. However, the process involved differs somewhat between the two. In this article we will discuss how to evict a commercial tenant.
The usage of a property determines whether or not the property is deemed commercial or residential. A residential tenant is defined as an individual that resides in a property, whereas an individual that does not live in a property or use it as a shelter and uses the property for business purposes is considered a commercial tenant. This is irrespective of whether or not the property is zoned residential. So at the end of the day, if an individual uses the property for business purposes they are considered a commercial tenant.
Legislative changes in recent years stipulate rigid procedures that landlords must adhere to, in order to evict a residential tenant. Unlike residential leases, which are governed by the Consumer Protection Act (CPA) and the Prevention of Illegal Eviction From And Unlawful Occupation Of Land Act No. 19 of 1998 (PIE Act), commercial leases are not, save for that in some instance the CPA may apply to a commercial lease agreement.
Contract law is applied to the commercial landlord-tenant relationship. Thus, a properly structured lease is vital to best prevent misunderstandings and conflicts and to afford the landlord maximum protection. As is the case with any contractual agreement, a rental contract is legally binding. It normally sets out the rights and obligations of the landlord and the tenant, and sets out the rights of each party in the event of the other party breaching the terms of the contract.
As opposed to paying a set amount of rent per month to rent a property, commercial tenants are usually charged per square metre. The tenant is also charged for utilities such as electricity and water. Landlords must ensure that the lease agreement clearly stipulates all amounts payable by the tenant.
In the case of a commercial rental agreement, there are still procedures that landlords are obligated to follow to evict tenants. The first step is the cancellation of the lease agreement which the landlord can do should the tenant commit a material breach of the lease agreement and fail to rectify such breach after receiving notification thereof from the landlord. The lease will also naturally terminate when the lease term ends, unless the lease provides for an automatic renewal period.
Commercial tenants are not protected under the PIE Act, but Section 14 of the CPA may apply to certain commercial tenants and commercial lease agreements. If the CPA does apply, landlords are required to provide 20 days written notice to the tenant stipulating the breach. Following this, the rental agreement may be terminated if the breach is not remedied by the tenant.
The eviction process for evicting a commercial tenant falls within the jurisdiction of either the Magistrates Court or the High Court. The rental agreement may stipulate the relevant court which the landlord must proceed out of. The matter may be brought to court once the rental agreement has been cancelled. Once the process has begun, it is typically resolved much quicker compared to a residential eviction.
The landlord’s right to safeguard their commercial property income takes priority in commercial eviction proceedings. In addition to evicting the tenant, a commercial landlord may also claim damages. Remember, a well prepared rental agreement is critical to best ensure a successful outcome in favour of the landlord, as it serves as the legal framework for the eviction.
A commercial lease must contain the rights and obligations of both parties to the lease to best avoid disputes and must explain how such disputes are handled. Alan Levy Attorneys have over 20 years of experience and provide exemplary legal assistance to assist landlords with evictions as well as related litigation and dispute resolution services. Contact us for evictions done right.
Additional articles discussing the eviction process and related topics may be found here.
The content in this article is not intended to be used instead of professional legal advice from an attorney. This article is intended to provide educational information to readers on how to evict a commercial tenant, as well as relevant information about the commercial eviction process.