Government measures in key jurisdictions 5th edition - Flipbook - Page 123
SouthAfrica
Property
Have any changes
been made to
the laws around
property, rent and
enforcement?
•
The impact of Covid-19 is severe and there will undoubtedly be parties who seek to avoid
their contractual obligations. Whether or not they can be saved by a MAC clause will
ultimately depend on the precise wording of the MAC clause and the allocation of risks. It
will also depend on the facts and the effect of the pandemic on the business in question.
•
When circumstances occur which renders performance under a contract impossible, the
principle of supervening impossibility of performance in terms of the common law may also
excuse parties from performance. Supervening impossibility of performance occurs when
performance was possible on conclusion of the contract, but subsequently has become
impossible through no fault of the parties. This could be the result of a vis major or casus
fortuitous.
•
The test for performance is that it must be objectively impossible. Where a party can
perform, albeit at a higher cost or with economic hardship, the RSA courts are unlikely to
consider this supervening impossibility. On the other hand, the courts have also been clear
that it is not complete factual impossibility that is required but rather that performance has
become so difficult and onerous that it can, under no circumstances, be reasonably
expected that a party must comply.
•
If supervening impossibility can be proven, the obligations of the parties under the
contract will be discharged and the contract will be terminated. This differs from force
majeure, which often allows for a suspension of performance and only provides for
termination in the event that the force majeure is not resolved within a period of time.
•
RSA is now under lockdown level 1 legislation promulgated by the Government of the
RSA. Many borrowers are now open but are still struggling to meet their obligations in
respect of payment of their rentals. Landlords have however been encouraged to
negotiate with tenants in respect of rental and other obligations, and in practice certain
retail tenants have, in terms of the common law, refused to pay rental and have been
granted discounts or rental free months by landlords.
•
The banks and financial institutions have provided relief to certain individuals and
entities. This is however not a blanket exclusion in respect of payment holidays to every
person and entity. Banks and financial institutions may, for example, either grant a one
month or three month payment holiday, depending on the financial position of the
individual or entity and provided the individual or entity was not in default with
payments when the lockdown started. Other banks have indicated that customers in
selected industries who can indicate their income has been affected by Covid-19 may be
offered a 6 month payment break.
•
The financial institutions are granting further bonds in respect of properties owned and
granting bonds to prospective purchasers.
•
The Deeds Office that processes the registration of bonds and transfers in terms of the
Deeds Registries Act in Cape Town is up to date, resulting in a turnaround time of about
6 to 8 days from date of lodgement to date of registration of the bonds or transfers.
Covid cases were reported but this resulted only in the Deeds Office in Cape Town
closing for a day in December 2020 and January 2021. Strangely there has been a mini
boom in the property market due to Covid and interest rates are at an all time low.
•
Turnaround times in the Deeds Office in Pietermaritzburg is approximately 3 weeks due
to Covid, but has been picking up after a huge backlog. This has a devastating impact in
that transfer and bond registrations cannot transpire speedily which has a detrimental
effect on cash flow of individuals and entities. King Williams Town has a turnaround time
of 6 – 7 working days and is in the same position as the Deeds Office in Cape Town.
Government measures in key jurisdictions
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