When a landlord can’t sue a tenant for unpaid rent

In Picardi Hotels Limited versus Thekweni Properties (680/7) (2008) ZASCA 128, the SCA held that a landlord could not sue his tenant for unpaid arrear rentals if the mortgage agreement concluded between the bank and the landlord contained a cession of rentals. Thus, unless otherwise agreed, the landlord had given up his right to sue for unpaid rent by ceding this income to the bank when concluding the mortgage agreement.

Landlords with mortgage bonds registered over their rental properties may have unwittingly surrendered their right to sue defaulting tenants where the mortgage bond contains a cession. Mortgage bonds typically contain a clause such as this:

Cession of rentals and revenues

Should the Mortgagee give its consent to the letting of the mortgaged property, the Mortgagor cedes, transfers and assigns to the Mortgagee all the Mortgagor’s rights, title and interest in and to all rentals and other revenues of whatsoever nature, which may accrue from the mortgaged property as additional security for the due payment by the Mortgagor of all amounts owing to or claimable by the Mortgagee at any time in terms of this bond, with the express right in favour of the Mortgagee irrevocably and in rem suam:

1      to institute proceedings against lessees for the recovery of unpaid rentals, and/or eviction from the mortgaged property;

2      to let the mortgaged property or any part thereof, to cancel or renew and enter into leases in such manner as the Mortgagee decides, and to evict any trespasser or other person from the mortgaged property;

Landlords should carefully check their mortgage agreements on both commercial and residential properties. If they contain a cession of rentals they need to obtain the bank’s permission before they may sue for unpaid rentals. This decision affects both commercial and residential rental properties as the above cession is included as a term of most commercial and many residential mortgage loan agreements.

Unless otherwise agreed, the landlord gives up his right to sue for unpaid rent by ceding this income to the bank when concluding a mortgage agreement.

Retirement age – when must you retire?

#retirement age

https://www.bregmans.co.za/labour-law-attorneys/

Eventually, everyone needs to stop working. Some people prefer to retire at an early age while others choose to work for as long as possible. Whatever your preference, you need to know what your rights and options are.

RETIREMENT AGE

The labour legislation does not deal directly with the issue of retirement age. However, it does say that no one may be unfairly discriminated against because of their age. This means that the employer and employee must agree on a retirement age.

There are three possible situations that you could find yourself in:

·         Your employment contract requires you to retire at a certain age.

·         You have agreed with your employer on a retirement age or there is a company norm.

·         There is no mention of retirement in your contract and there is no agreement.

If you sign an employment contract that stipulates a retirement age, then you can legally be required to retire at that age. The organisation won't be required to give you notice.

If the retirement age is not in the contract but is agreed or if there is an organisational norm, then the employer can give you notice requiring you to retire at that age. The notice period will be the same as the notice period for termination of employment set out in your contract of employment.

When would there be deemed to be an organisational norm? There is a general understanding that the "normal" retirement age is 55, 60 or 65 but this understanding is to

·        the rules of a company's provident or pension fund (but this is not definitive); or

·        company policy.

If there is no mention of a retirement age in your contract and there is no organisational norm, then you can continue to work until you are unable to do your job properly. Your employer can only terminate your contract in accordance with the labour legislation (that is for misconduct, operational requirements or incompetence) and will have to follow the procedures set out in your contract or labour law. The courts have found that it is unfair discrimination for your employer to terminate your employment services just because of your age.

WHAT IF YOU CONTINUE TO WORK AFTER THE RETIREMENT AGE?

There is no legal certainty regarding the rights of an employee who works beyond retirement age. It is thus advisable for the employer and employee to clearly define the terms of employment after the retirement age, for example how long the employee will continue to work for and what notice is required to terminate the employment.

A living, loving trust plan.

I want to protect and care for myself and my family while I am alive, and to leave what I have- and what is needed- to whom I want, the way I want, and, in addition, if I can, save legal fees, administrative and court costs, and taxes to the maximum extent legally possible.

Wills and Trusts are both estate planning documents used to pass assets on to beneficiaries at death.  However, there are distinct advantages to using a Trust over a Will.  Fully funded Living Trusts can cost significantly less than Will-planning/ Estate winding-up procedures.

Please see this article on our website and contact me if you’d like some more information. Ideally, please let me know what your concerns are and how I can address and solve them.

Contracts in restraint of trade – the law

Contracts in restraint of trade – the law

An agreement in restraint of trade is prima facie enforceable. The onus rests on the party seeking to avoid a restraint clause to prove that it is contrary to public policy.

The approach to restraints of trade is neatly summarised by Malan AJA in Reddy v Siemens Telecommunication, as follows:

·         A court must make a value judgment with two principal policy considerations in mind in determining the reasonableness of a restraint.

o   The first is that the public interest requires that parties should comply with their contractual obligations, a notion expressed by the maxim pacta servanda sunt.

o   The second is that all persons should in the interests of society be productive and be permitted to engage in trade and commerce or their professions.

·         Both considerations reflect not only common-law but also constitutional values. Contractual autonomy is part of freedom informing the constitutional value of dignity, and it is by entering into contracts that an individual takes part in economic life. In this sense freedom to contract is an integral part of the fundamental right referred to in s 22 of the Constitution that guarantees ‘[e]very citizen … the right to choose their trade, occupation or profession freely’ reflecting the closeness of the relationship between the freedom to choose a vocation and the nature of a society based on human dignity as contemplated by the Constitution.

·         In applying these two principal considerations the particular interests must be examined.

o   A restraint would be unenforceable if it prevents a party after termination of his or her employment from partaking in trade or commerce without a corresponding interest of the other party deserving of protection. Such a restraint is not in the public interest.

o   Moreover, a restraint which is reasonable as between the parties may for some other reason be contrary to the public interest. In Basson v Chilwan and others Nienaber JA identified four questions that should be asked when considering the reasonableness of a restraint:

§  Does the one party have an interest that deserves protection after termination of the agreement?

§  If so, is that interest threatened by the other party?

§  In that case, does such interest weigh qualitatively and quantitatively against the interest of the other party not to be economically inactive and unproductive?

§  Is there an aspect of public policy having nothing to do with the relationship between the parties that requires that the restraint be maintained or rejected? Where the interest of the party sought to be restrained weighs more than the interest to be protected the restraint is unreasonable and consequently unenforceable. The enquiry which is undertaken at the time of enforcement covers a wide field and includes the nature, extent and duration of the restraint and factors peculiar to the parties and their respective bargaining powers and interests.

Can I list a debtor as a bad payer with the credit bureaus?

A credit granting business client can list a business or individual, who has defaulted on payment in accordance with the National Credit Act (NCA) regulations, directly onto the several Credit Bureau Default Listing databases.

This listing will immediately appear on the person's Consumer Credit Report as adverse information under Default listings. In the case of a business, the Default listing will immediately appear on the business's Business Credit Report under Default listings.

Default listings will negatively influence the person or business's credit rating and will reflect on their credit report for a minimum of two years.

These are the steps to follow:

·         In terms of section 72 of the NCA, a creditor is obliged to give the consumer 20 business days’ notice of its intention to list any default information on a consumer’s credit report. The written notice may be contained in a written notice that is sent via registered post or in an e-mail. The onus would be on the creditor to prove that any such written notice had been duly given to the consumer. It is important to note that the aforesaid applies to “default” (aka adverse information as defined in Regulation 17 – such as a failure to pay) and would not apply to information listed under the consumer’s payment profile as such information is classified as account information which is essentially information that relates to how a consumer pays his or her account on a monthly basis.

During that 20 days period, the consumer can challenge the accuracy of the information proposed to be reported to a credit bureau or to the National Credit Register.

A creditor can list judgment information on a consumer’s credit report without being obliged to give the consumer written notice of its intention to do so.