Taking the proper steps when evicting a non-paying commercial tenant

If you let a commercial unit, it is probably in the expectation that the tenant will pay rent. Sometimes, however, tenants stop paying rent – and then refuse to vacate. Before you decide to evict and in order to avoid a protracted legal battle in court, we recommend that you take the appropriate steps in order safeguard yourself when entering into a lease.

Pursuant to the Commercial Buildings and Commercial Units Act, a commercial unit lease must be in writing. If the lease fails to set out appropriate eviction procedures for non-payment of rent, the landlord may find himself in a predicament! If the tenant refuses to vacate the commercial unit at the end of the lease term the landlord will have to initiate appropriate litigation proceedings (which are usually lengthy –longer than 1 year). Once a judgement or appropriate enforceable title has been issued the landlord will be in a position to file an enforcement motion, on foot of which he can demand the vacation/return of the unit.

The landlord can also serve an enforcement motion directly on the tenant without bringing a lawsuit to vacate the commercial unit. A prerequisite for this is that the lease must to be drawn up in the form of a directly enforceable notarial deed. This document must make provision or specify that the tenant is required to vacate in case of non-payment of rent.

The rent payment date and lease expiry date must be duly indicated and the tenant must consent to enforced execution of the obligation. In this case, the landlord will not need to specifically prove the maturity of the tenant’s obligation, as the notarial deed serves as appropriate evidence. Under the notarial deed option, enforcement proceedings and vacation of the commercial unit move at a significantly faster pace.

If the lease stipulates that the tenant is to pay overheads directly to suppliers/utilities (electricity, management costs, etc.), the landlord will unfortunately still have to prove the debt for these costs through litigation. However, the landlord can avoid this by stipulating in the lease an average for these monthly overheads (a certain amount), usually with an appropriate increase/decrease clause relative to the actual costs.

Where the tenant continues to use the commercial unit after expiry of the lease term and the landlord fails to file a motion for a commercial space vacancy order within 1 month after of the expiry date, it is deemed that the agreement has been renewed on equal terms for an indefinite period. In this case, the landlord will have to terminate the lease agreement in litigation proceedings.