EXPLAINER | What if I can’t pay my rent during lockdown?

The landlord and tenant relationship can be traced back to the 10th century. It is an intrinsic relationship that is here to stay, however it ultimately evolves.

Landlords and tenants, as an inseparable pair, currently face a significant challenge.  

I write this article with conflicting feelings – on one hand being a landlord’s attorney and, on the other, as a tenant. While my primary aim is to consider the legal position, there are also practical suggestions to manage the relationship during this tumultuous time.

In this unprecedented situation, it is natural that certain tenants will look to their landlords for assistance. The landlord’s position is, however, precarious, despite a popular misconception that landlords hold unlimited funds or can afford to withstand non-payment of rentals.

Landlords pay rates and taxes, utilities consumed by their tenants at their properties, and other operational costs, including staff salaries. Most significantly, most landlords have substantial bond repayments and other debt instruments that they must service.

The below information serves as a guide for tenants and landlords in these challenging times. One must regard the entire contents of this article to understand the legal position and, with understanding of the other side’s position, hopefully reach an amicable resolution to protect the symbiotic relationship between landlord and tenant.

Contractual law and lease agreements

In contractual law, generally, in the event of a vis major (synonymous with force majeure) – a superior power or force which cannot be resisted or controlled – the result is that one or both parties are excluded from liability and from fulfilling their contractual obligations.

In my view, the Covid-19 outbreak, and the resultant government lockdown, fall within the definition of a vis major.

Therefore, a tenant intending to rely on vis major to be exempt from paying rental (in full or partially) must prove that it did not have full beneficial occupation of the leased premises for a defined period.

In this regard, the tenant might be entitled to a remission of rental for the number of days that they were unable to have full beneficial occupation of the leased premises.

Most modern lease agreements contain a rental payment clause that excludes any deduction or set-off for any reason whatsoever.

Furthermore, certain leases also specifically exclude liability against the landlord for any claim, of any nature, for any loss or damage suffered directly or indirectly by reason of vis major

In such cases, despite the lockdown, rental remains payable and the landlord is within its rights to claim payment.

However, if the lease agreement does not contain a rental payment clause, as referred to above, a tenant without full beneficial occupation may seek a remission of rental.

At best, for any tenant that is entitled to a remission of rental, utilities, rates and taxes and other such fixed costs remain payable without any remission whatsoever.

Categories of tenants

Residential tenants will remain in occupation of their premises during the lockdown period and therefore enjoy full beneficial occupation. There is no contractual or other right for such tenants to withhold rental payment.

Retail tenants (with the exception of those that fall within the definition of essential services) will not be in full occupation of their premises during the lockdown period and will not generate any income. Despite this, if their lease agreement contains the aforementioned rental payment clause, they are contractually obliged to continue making payment.

Commercial (offices) and industrial (warehouses and factories) tenants are in the same position as retail tenants.

Business assets in the leased premises

The argument by retail, commercial and industrial tenants is that, practically, even though they are obliged in terms of the lease agreements to pay rental, they do not have the full use and enjoyment of the leased premises.

One must, however, give regard to the fact that although the tenant’s human resources will not be in occupation, the tenant’s business assets remain in the leased premises and the tenants accordingly do still enjoy some use and benefit of the leased premises.

Practical advice

Tenants – continue paying rental as per your contractual obligations. If your lease does not have a deduction or set-off clause, request a remission of rental for the appropriate number of lockdown days.

Landlords – where possible, assist tenants (especially those who are in good standing) through this difficult time with deferred rentals (partially or in whole) with fair repayment terms to be agreed. It is obviously in your best interests to help good tenants survive.

It is important to note that the above is subject to careful consideration of each matter on a case by case basis and that there is no general rule or answer.

Finally, my advice is for everyone to communicate, be fair, respect and be kind to each other and work together to overcome this. Our actions now, as landlords and tenants, will set the foundation for our future beyond this crisis.

By Liad Hadar – 27 March 2020

Liad Hadar is director at Hadar Incorporated – Property Law Specialists. Views expressed are his own. If you are a tenant or landlord and have a follow-up question, you may contact the firm at  liad@hadarinc.co.za.   

Source: Fin24


As coronavirus threatens jobs, some insurers halt sales of retrenchment cover

Some of South Africa’s insurers have stopped selling retrenchment cover as the novel coronavirus threatens to accelerate the rate of unemployment in the country. During a webcast with financial advisers, insurer FMI – which is part of Bidvest Life Limited – said it had received communication that some of the industry players were no longer accepting new applications for retrenchment cover.

This comes at a time when preliminary estimates published by the South African Reserve Bank on Tuesday show that the country could lose about 370 000 jobs this year.

Insurance to cover retrenchments is not widely available in South Africa. Of the big five listed insurers, only Liberty and Old Mutual offer it. Liberty also underwrites Frank.net, another smaller insurer that offers retrenchment cover. This insurance product normally covers a portion of people’s salaries, usually up to 75% for six months after involuntary retrenchment.

Liberty pauses retrenchment cover

Liberty confirmed on Wednesday that its retrenchment cover is no longer open for new business.

“Liberty confirms the temporary suspension of the sale of retrenchment and the shorter-term insurance benefits covering loss of income. Given the uncertainty related to the Covid-19 pandemic, it is very difficult to assess the potential risks and related cover for new clients,” said David Jewell, the group executive of retail solutions at Liberty.

He said the insurer’s focus right now is on ensuring that it meets all valid claims from current clients and added that existing benefits will remain the same. Old Mutual had not confirmed at the time of publishing the story if it was still selling its Greenlight retrenchment cover.

As for banks, most provide cover to pay customers’ monthly debt instalments in the case of retrenchment. But Absa, which also pays a limited income benefit – only R5 000 for two months – said it is still accepting new applications.

“However, consumers should take note that some of these products have a standard three- to six-month waiting period,” said Dushen Naidoo, managing executive of insurance at Absa Retail and Business Bank SA.

New customers unlikely to be covered for Covid-19

Samuel said FMI was also still offering retrenchment cover to new customers, but only certain people would qualify for it.

These are full-time and permanently employed individuals who received a salary for at least the past two years. But someone who changed employers recently and has not received a salary from the same employer for at least a year won’t make the cut either.

People working in mining, construction and fishing industries are completely excluded, even if they are in supporting roles like IT, states FMI’s criteria. A standard six-month waiting period and several other conditions also apply.

“Yes, understandably there are more Ts and Cs with this benefit, but I just think it’s important that people know the terms and conditions upfront to avoid disappointment at [the] claim stage,” said Samuel.

By Londiwe Buthelezi – 8 April 2020

Source: Fin24


VAT relief for essential services

The South African Revenue Service (SARS) has determined that businesses that import essential goods, as defined in the regulations, do not have to pay VAT on these imported goods. However, when the same essential goods are resold locally, the normal VAT rules apply.


Source: www.pexels.com

The purpose of this regulation is to assist with the cash flow of these businesses, as they now do not have to set-off the VAT paid on imports against the VAT charged on sales, but can simply pay over the full VAT on sales to SARS.

Find out more about SARS Disaster Management Tax Relief below:

Source: Bizcommunity


Business as usual for banks during lockdown

Banks will be open and your money will be accessible during the countrywide lockdown.

On Monday, 22 March President Cyril Ramaphosa announced a nationwide 21-day lockdown to be implemented from midnight on 26 March to midnight on 16 April, in an effort to prevent an escalation of the coronavirus pandemic that was recently declared a national disaster.

A lockdown is an emergency protocol that requires all South Africans to stay at home except for essential purposes. All non-essential activities are suspended, however, grocery stores, pharmacies, banks and other essential industries will remain open.

Enabling normal operations

On 24 March, Trade and Industry Minister Ebrahim Patel stated that the banking sector in the country would conduct business as usual during the lockdown period.

Patel said: “The government is doing what it can to minimise the negative impact on the ability of customers to manage their finances during the national disaster. This includes enabling business and private individuals to continue their normal operations.”

This means there is no need for customers to withdraw all their funds during the lockdown period. Your money can remain in the bank and you will be able to withdraw it whenever needed. Some branches will be closed, so if you need to visit a branch, you should check your bank’s website to find the open branches nearest to you.

Patel said that the exemptions will also allow essential payment systems to operate, including:

  • The continued availability of banknotes to ATMs, branches and businesses
  • The continued provision of essential ATM, branch and corporate banking services
  • The continued provision of electronic payment systems

Debtor management

Patel also said the management of debtors and the extension of credit will continue as long as the national disaster conditions exist, with the following measures to be implemented for business and individual debtors experiencing financial stress:

  • Banks will institute payment arrangements and debt relief programmes
  • Limitations will be set on the repossession of assets
  • The extension of credit lines.

Credit relief

A number of local banks have already committed to helping businesses and customers to cope with the impact of the coronavirus. As South Africa and the world confront the public health, financial and economic implications of the Covid-19 pandemic, Absa Group is rolling out an extensive relief programme for eligible customers impacted by Covid-19.

We realise that this is a difficult time for our customers and businesses whose financial means are being negatively affected. After careful consideration and engagements with regulators, we are introducing a comprehensive customer, business and corporate relief programme, effective on Monday, 30 March 2020 – Daniel Mminele, Absa group chief executive.

“The programme is in line with the principles of an industry-agreed approach (see https://www.banking.org.za/news/banks-respond-to-covid-19/). We urge those of our customers who are able to continue making their payments, to do so. This will enable us to extend these measures to many more who are in a less fortunate position.”

Eligible customers in need of short-term liquidity relief will qualify for the relief programme that applies to Absa’s credit products. These relief measures will be available to Absa’s corporate, wealth, business bank, private bank and retail customers.

The programme incorporates a three-month payment relief and allows customers in need of short-term financial assistance to reduce their monthly instalments. Customers in good standing – with up-to-date accounts – who have been financially distressed by the pandemic will have the opportunity to apply for payment relief to assist with cash flow needs. Customers who are unable to continue paying, as usual, will be able to sign agreements with the bank to pay reduced instalments or to defer payments for up to three months.

“Relevant agreements will be adjusted by revising the loan period and capitalising interest during the relief period. Crucially, this programme will not attract additional administration fees for customers. Support to corporate and business banking clients will entail solutions based on their specific requirements and operations,” said Arrie Rautenbach, chief executive of Absa Retail and Business Banking (RBB) South Africa.

“The programme is testament to our commitment to finding real, customer-focused solutions, in a time of great uncertainty for everyone.” Businesses and corporates are encouraged to contact their relationship managers for further details. The principles applicable to this relief programme in South Africa are extended to Absa’s other markets in Africa and will be implemented subject to the various conditions, laws and regulations applicable in each country.

“Absa campuses also have small and medium-sized enterprises (SMEs) such as hairdressers, pharmacies, florists and coffee shops, among others as commercial tenants. In recognition of the role SMEs play in creating jobs and sustaining livelihoods, these businesses have been granted a rental respite for the next three months.

“We will continue to monitor the situation closely and adjust our relief programme where necessary,” concluded Mminele.

Home loans

For home owners, you can access funds from your Absa home loan during the lockdown period through the FlexiReserve and the ReAdvance facilities. You can gain access to these facilities using internet banking, Absa’s banking app or the helpline.


If you have deposited extra funds into your home loan over and above your regular monthly repayments, you can access these funds whenever you need them through the FlexiReserve facility.

  • A minimum of R1,000 may be transferred out of your FlexiReserve facility
  • The maximum transfer limit allowed through internet banking, ATM or by telephone is set by you. You can change any of the daily limits on these services
  • You cannot make cash withdrawals or third party payments directly from the home loan account


You can apply to take your existing home loan back up to the original loan amount granted with ReAdvance, without being required to register any further bonds over the property, and no attorney fees are charged for this. However, the necessary credit, risk and affordability assessments need to take place before these funds can be accessed.


“The exemptions will allow banks to work together in ensuring the continued functioning of the payments system, a critical component of the financial system. This includes sharing information and resources to ensure the continued availability of banknotes to ATMs, branches and businesses,” said Patel during his announcement on March 24. “In terms of the National Disaster Management Act, these regulations shall remain in operation for as long as the Covid-19 disaster subsists, or until they are withdrawn.”


Source: Bizcommunity


Nxesi urges employers to comply with labour law during lockdown

Employment and labour minister Thulas Nxesi has pleaded with employers to comply with the labour laws and the Covid-19 regulations. Addressing reporters during a social cluster press briefing on Tuesday, 31 March, the minister revealed that some employers were still not adhering to the relevant laws.

Read More

Covid-19: What are your rights as an employee?

With the implementation of the national lockdown by President Cyril Ramaphosa on 26 March, there has been understandable confusion. While some employees have been told that continuing to work is unlawful, others are legally obliged to continue working. How do you know which category you fall into, and what are your rights in each case?

Read More

Unpacking the UIF Benefit in response to Covid-19

In the wake of the announcement of the national shutdown, the Minister of Employment and Labour has announced the introduction of measures in response to coronavirus (Covid-19) and its impact on UIF contributors. There has also been the establishment of a Rapid Response Teams to be deployed to each province to assist companies with processing of claims in cases where they have retrenchments of more than 50 employees.

Read More

Relief For SMMEs Amid COVID-19

Johannesburg, 23 March 2020: The COVID-19 pandemic, which has been declared a National Disaster and has prompted a 21-day national shut down, is having catastrophic effects on businesses throughout South Africa and around the globe.

Micro, small and medium enterprises are among the hardest hit by the crisis. Government departments have been inundated with enquiries from SMMEs, requesting help to mitigate the devastating impact the pandemic is having on their livelihoods.

Government’s commitment to SMMEs

The Minister of Small Business Development, Minister Khumbudzo Ntshavheni, announced that Government is introducing support measures for SMMEs during this extremely difficult time.

The Department’s proposed Debt Relief Fund will offer qualifying SMMEs much-needed repayment relief, which will assist many business owners who are currently finding their debts unserviceable. In order for SMMEs to qualify for assistance from the Fund, they will need to demonstrate a direct link of the impact, or potential impact, of COVID-19 on their businesses.       

Assistance from banks

Some of the banks have also started announcing lifelines that they will be extending to their SMME customers.

Standard Bank was first to the party, offering a three-month payment holiday for debt repayments for qualifying business customers with an annual turnover of less than R20 million. Furthermore, the bank recently made a statement on Twitter, committing to reach out to their vehicle and home loan customers individually with payment relief options.

Nedbank are encouraging their customers to get in touch with them directly. They will be offering solutions including debt repayment holidays, extended loan periods, or short-term credit extensions on a case-by-case basis. They will make further announcements regarding their relief offerings in the coming days.

Be proactive

Darlene Menzies, CEO of Finfind, stated, “Now, more than ever, it is the performance of the small business sector that will determine the fate of the country’s economy going forward. With a severely constrained fiscus and looming mass retrenchments by corporates, it is critical that the SMME sector is strongly supported through this crisis. This is essential in order to prevent large-scale liquidations of viable small and medium businesses, and the loss of thousands of jobs, adding to the already high unemployment rate. Starting and building a business is not easy, it takes tremendous perseverance and resilience. The financial challenges and cash flow pressures that business owners face each month are currently being magnified, due to the shutdown being put in place to avoid the spread of the COVID-19 virus.”

Menzies urged small business owners who are facing cash flow challenges, to make contact with their banks, suppliers and other creditors sooner rather than later. “It is crucial that business owners proactively communicate their inability to meet payment commitments over this time, rather than taking no action. It is in the best interests of the business and the credit provider to find a workable repayment plan to address the outstanding debt.”

Menzies continued, “In this time of uncertainty, it is important that business owners take immediate steps to ensure they have the cash flow reserves needed for the months ahead. Ironically, the best time to apply for finance is when it is least needed, when business is booming. This is when lenders are more likely to approve credit facilities that are then available to the business owner for these kinds of unplanned crises. Of course, if you haven’t already secured the money you need to bridge you through this tough time, then the next best time to apply for finance is now, before you hit the cash cliff.”

Get the funding help your business needs today

Finfind has included all the latest cash flow solutions available from Government and private lenders across the country, adding to its comprehensive funding database of over 600 SMME finance offerings. If you anticipate needing cash flow assistance in the coming months, you can complete Finfind’s online questionnaire which will automatically match you any finance offerings that match your particular funding  needs. You will also find a link to the Government’s Debt Relief Fund on Finfind’s home page.