Government measures in key jurisdictions 4th edition - Flipbook - Page 120
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 2 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 most significant impact of the lockdown was the closure of the Deeds Offices during
lockdown level 5. The Deeds Office processes the registrations of transfer of properties and
bonds in terms of the Deeds Registries Act and no transfer of properties or registration of bonds
could transpire, which had a detrimental effect on the cash flow of individuals and entities,
causing hardship.
•
The Deeds Office opened under level 4 with reduced staff. The Deeds Office is currently
operating under lockdown level 2 but, as a result of its closure under previous levels of the
lockdown, a backlog exists which has resulted in delays in the finalisation and registration of
matters (with the subsequent knock-on effect on the economy). The current delay at the Cape
Town Deeds Office is about three weeks, with a total turnaround time of five weeks. The Deeds
Office at King Williams Town, Bloemfontein and Kimberley are functioning normally. There is a
slight delay in turnaround times in Pretoria, Johannesburg and Pietermaritzburg. This can
however change at any moment if a Covid outbreak occurs.
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