Alert Level 4 Lockdown Implications for the Property Sector

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Alert Level 4 Lockdown Implications for the Property Sector

Alert Level 4 Lockdown Implications for the Property Sector

Legislative changes for Alert Level 4 have been gazetted, which affects Occupational Health & Safety, Permission for Movement, Evictions and the reopening of the Deeds Office all which have a significant impact on landlords and tenants, buyers and sellers in the commercial and residential sectors of the real estate market. Grosch Properties advises all to take heed of these changes and to contact your our office or individual property agents should you have further queries or clarification.

Occupational Health and Safety

Both landlords and tenants in the commercial property sector must be aware of amended directives by the Department of Employment and Labour with effect March 2020 under Occupational Health and Safety Act (OHSA) and the National Disaster Management Act. The directive imposes adjustments to deeming a workplace fit for use to both employees and the public as per national regulations. Including the implementation of social distancing, hand sanitizers and disinfectants, use of PPE, symptom screening, cloth masks and ventilation. Directive options may differ between 10 employees and 500 employees and commercial tenants are advised to review these measures. Leasing of commercial properties and zoning must be taking into consideration by landlords who will have to enforce these new directives. Necessary building insurance and compliance audits will have to be revisited including the clearance certificate which requires an annual update.

Movement during lockdown 

Adjustments to the National Disaster Management Act relating to the movement of persons and goods came into effect during Alert level 4 on 7th May 2020. Which facilitate the movement across provincial, metropolitan or district boundaries during this period of Alert level 4 as a once-off movement only. 

The movement of persons and goods where:

  1. New lease agreements were entered into before or during lockdown period or;
  2. The transfer of immovable property occurred before the lockdown period.

Requires a change in residence, including the transport of goods to a new place of residence within South Africa, this is limited to a once-off move between 7th May 2020 and 07th June 2020.

Requirements for a move of this nature include the following:

  1. Obtain a permit to travel across provincial, metropolitan or district boundaries from the station commander of a police station or a person designated by him or her.
  2. The permit must correspond to Form 1 to the gazetted directions (click on the link and complete page 6)
  3. Indicate the persons who are part of the household who will be required to move
  4. Have in your possession the relevant lease agreement indicating the date of the expiry of the old lease and the date of commencement of the new lease, or the transfer documents confirming the change in place of residence or change of ownership of property.

The new regulations do not allow removal companies to operate only rules for public and private transport must be followed.

Eviction processes

A significant change under Alert level 4 is that courts may grant eviction orders but it may only be executed after Alert level 4 ends (at the discretion of the courts).

Credit bureau TPN indicates that 16% of tenants did not pay full rent in April and a further 16% did not pay any rent at all, with an expectation for further deterioration of payment as lockdown continues. Landlords and Tenants are well advised to note that now:

  1. Sheriff services will commence for all legal practitioners, therefore Court documents, applications and action can be served. 
  2. Granting of Eviction orders are allowed. A competent Court may grant an order for eviction. Provided that any order of the eviction shall be stayed and suspended till the last day of Level 4. Unless a Court decides that it is not just and equitable to stay and suspend until the last day of the alert level.
  3. It is important to understand the difference between the “execution of an eviction order” and the “granting of an eviction order” under this current Alert level 4.
  4. The Minister has stated no person may be evicted during Alert level 4, this is correct, and is considered an “execution of an eviction order” the implementation of this eviction order can only be done when the current Alert is lifted and regulations allow. However, applications for evictions can be done during Alert level 4.

If tenants are unable to honour rental agreements due to loss of income of in part or full it is advisable to communicate with your landlord and Grosch Property agents to make further arrangements. As regulations under the National Disaster Management Act are determined by the Minister these may change without prior notice. We advise you to check the relevant government websites or maintain contact with your knowledgable Grosch Property consultants pertaining to the real estate sector.

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