Magistrate Court proceedings will be in the form of an Automatic Rent Interdict Summons. High Court proceedings may be brought by way of either action or application. The proceedings are founded in civil litigation and are based on the terms and conditions of the lease agreement.
Speak to us at Eviction Lawyers, a division of Le Roux Attorneys regarding your commercial eviction case should you need legal advice or representation
Process by the magistrate court
In the Magistrates Courts, the process will follow the route of a summons being issued, while in the High Court one has the election of either proceeding with a Summons or an Application. The benefit selecting the Application procedure is that it is usually finalised much faster, granted that there are no disputes of fact in the case.
It may sometimes be useful to split the claim for arrear rental and damages from the claim for eviction as the eviction claim could be finalised much quicker. The number one priority in most evictions is to eject the tenant from the premises so that new suitable tenants can be placed, returning the property to profitability.
What is considered a commercial property?
A typical commercial eviction is the ejectment of persons from office space, retail space or industrial space.
In determining whether an eviction falls under Residential or Commercial, one must have regard to the use of the property. The zoning of the property and the entity of the tenant does not assist in making this determination as only the actual use is relevant.
Influence of the consumer protection act on commercial evictions
A further issue that must be determined is whether the Consumer Protection Act (CPA) has any bearing on the Lease Agreement. Certain tenants under the CPA may have extended time to remedy any breach of the agreement, and may even have the right to terminate a fixed term lease with 20 business day’s notice. Other tenants may be excluded from the CPA.
Companies Act & Business rescue
Under the new Companies Act, a company may apply for business rescue if it finds itself in a position where it cannot satisfy the demands of creditors, but has a reasonable belief that the business could be rescued. In such a case a moratorium is placed on all legal action, which means that the Landlord may not thereafter terminate the lease, start eviction proceedings or take any action to recover arrear rental while the company is under business rescue.
While it is accepted that business rescue proceedings allow some businesses to return to profitability, it is often employed as a delay tactic to prevent creditors (such as landlords) from taking legal action against them and evicting them. It may be suitable in some circumstances to either co-operate with the Business Rescue Practitioner in restoring the business, or it may be feasible to approach the High Court to set the Business Rescue aside, depending on the specific circumstances.
The effect of Business Rescue on the Landlord could be fatal, especially if the property in question is bonded and the Landlord does not have alternative means of making the bond payments. The Business Rescue proceedings will delay all enforcement action by at least 3 months, but in practice, this often takes much longer.
Laws that may have an effect on a commercial eviction
Each case will have to be assessed on its particular set of facts as the Consumer Protection Act 68 of 2008 affords certain tenants’ rights in respect of rectifying breaches of the lease agreement and time periods for cancellation of the lease agreement. In addition, the Companies Act 71 of 2008 makes provisions for a company to apply for business rescue. This will affect the commercial eviction process as legal action may not be brought against the company or pending legal action against the company is brought to a halt. The owner does, however, have the option of launching a High Court application to have the business rescue set aside.