Page 81 - Q&A

Should I still pay my rent during lockdown?

August 2020
“My employer has been closed for most of the lockdown and has been forced
to cut staff salaries. Although I understand his predicament, it has now placed
me in a situation that I can’t pay my rent. I was wondering whether the same
applies to my lease agreement and whether I will be excused from paying rent
because of Covid-19?”
Although, many sectors have felt the bite of the Covid-19 pandemic, the
residential sector has certainly taken its share of knocks. Many tenants like you
have found it difficult to pay rentals with pay-cuts, layoffs and loss of income
affecting their financial stability. In turn this has affected many landlords with
rental income plummeting due to non-payment and in turn affecting their
ability to stay up to date with their financing.

So where does this leave tenants and landlords?

A lease agreement establishes a landlord-tenant relationship whereby the Property
landlord provide use and enjoyment of property in return for payment of rental.
Should one party breach their obligation to the other a breach of agreement
occurs entitling the innocent party to terminate the agreement.

The question then arises, whether situation like Covid-19 will excuse a tenant from
not paying their rent and accordingly not being in breach of their obligation
to pay. Here, the lease agreement itself becomes important to ascertain
whether provision has been made for any circumstances under which rental
payment may be postponed/delayed/waived. Some agreements, particularly
in commercial lease agreements, may cater for a variety of situations that
may provide respite to a tenant in respect of rental obligations. However, if the
agreement is silent on any such relief which can accommodate the Covid-19
scenario, then non-payment, no matter how justifiable the situation may be,
will amount to a breach of agreement.

Accordingly, if your lease agreement does not provide for any relief, and you
know that are behind/will fall behind with your rental, it is better to approach
your landlord and try and negotiate a rental payment holiday or a reduction in
rental. For many landlords it will also not be in their interest to now loose a good
tenant and they may be open to discussing options that can help provide you
relief. In turn, the landlord could also look to obtain a payment holiday from his
bank or claim from his insurer for loss of income (should he have such cover)
to alleviate the pressure on his side. Either way, it would be a more prudent move
to approach your landlord timeously than default on your payments and risk
termination of your lease.

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