Can I force my tenant to trade?

“I own a small shopping complex. A key tenant, who must give six months’ notice if they don’t renew their lease, has just given notice. I don’t have a problem with that, but with months to go before they exit they have now stopped trading. This will have a big impact on feet to the complex if they don’t trade and I’ve asked them to continue trading until they vacate the premises, but the client refuses and says he’s cutting his losses. Can I force him to trade for the remainder of the lease agreement?”

Whether you can force the tenant to continue trading all depends on the terms of your lease agreement. 

In the case of Edcon Limited v Bay West City (Pty) Ltd, a landlord sought to force the lessee to continue trading after the latter gave notice that it would close its shop due to financial reasons. The lessee did however, continue to pay rent and maintain the premises. The landlord argued that, in order to attract customers and remain competitive in the market, tenants could not be allowed to simply close their doors whilst paying rent and are thus required to trade. The court however disagreed and held that, as long as the tenant honoured the lease, the landlord could not insist that the tenant continue trading where a term in the lease requiring the lessee to do so, did not exist. It further held that, should the lessee be obliged to carry on business for the full duration of the lease, even when suffering a loss, such onerous terms must be stipulated in the lease either expressly or by implication. 

Accordingly, unless there is a clear provision in your lease agreement that obliges the tenant to keep trading at full capacity for the remainder of the lease, you will not be able to force your tenant to continue trading. However, should there be such a provision you may be able to force your tenant to honour the agreement and continue trading.

It is accordingly advisable that you consult with your attorney regarding the lease agreement and to what extent it provides for the obligation to trade or continue trading during the period of notice. It may also be worthwhile to review all your other lease agreements to determine if the aspect of trading is adequately dealt with in your leases.

March 11, 2019
The Mortgagor’s surrender: understanding the cession of rights in mortgage bonds

The Mortgagor’s surrender: understanding the cession of rights in mortgage bonds

Most people are familiar with the concept of transferring ownership of a tangible object– e.g., the sale of a car or home. But what happens when the subject of the transfer isn’t the object itself, but the right to that object? This is where the concept of cession comes into play. A cession agreement is a powerful legal mechanism that allows one person to transfer their personal right in an object to another, often as a means of securing the fulfilment of an obligation.

Property Owners! The Energy Performance Certificate (EPC) Cut-Off Date Looms.

Property Owners! The Energy Performance Certificate (EPC) Cut-Off Date Looms.

In a country where three-quarters of the national energy supply is still derived from coal, the urgency for sustainability and energy efficiency has never been greater. As South Africa works toward fulfilling its climate commitments—including the UN Climate Promise to achieve net-zero emissions by 2050—efforts to improve energy use across both public and private sectors have taken centre stage. A key initiative in this transition is the implementation of Energy Performance Certificates (EPCs), introduced by the Minister of Mineral Resources and Energy and governed by the National Energy Act 34 of 2008.

Sealing the Deal: Navigating Document Signing Alternatives for Unique Needs

Sealing the Deal: Navigating Document Signing Alternatives for Unique Needs

What is Conveyancing?

Conveyancing is the process whereby the legal ownership of a seller over an immovable property, like an erf, a farm, or a sectional unit, is transferred to a purchaser. The legal process of preparing binding deeds of sale, transfer and/or bond documents is facilitated by conveyancers.

Sign up to our newsletter

Pin It on Pinterest