[Question] Commercial tenants - Is it legal to switch off utilities due to no payments

[Musiclover08]

Hi guys and girls.

I am in charge of a commercial property and one tenant, who runs a furniture factory from the property. I have been going over the books from the previous owner and this specific tenant has never paid for water and lights. I have addressed this and asked for payment but the tenant refuses to pay. Would I be within my rights to switch off water and lights due to non payment? I know that you are not allowed to do so with residential tenants but I should think that commercial tenants fall under a different way of thinking?

[sterne.law@gmail.com]

No, you may not switch it off.
You need to give him notice of breach as per lease.

[sterne.law@gmail.com]

In good news, the WestErnest Cape High court has ruled that the landlord can cut the electricity as a means to mitigate damage.
BUT BEFORE you get too excited, that would be with a court order.

[Musiclover08]

Hi Sterne.law. Thanks for the advice, I did notify the tenant that they are in breach, however looks like I will have to get a court order for the electricity

[Houses4Rent]

Here is the story:

http://1drv.ms/1EiVEuJ

[CLIVE-TRIANGLE]

sterne.law, please advise:

Could the landlord have disconnected the tenant, the tenant, as a result of it being deregistered, could presumably not have compelled the landlord to reconnect?

Or, could the landlord have obtained an eviction order, because the lessee no longer exists?

What other action could the landlord have taken, unjust enrichment perhaps?

[sterne.law@gmail.com]

OnSorry Clive I am not quite sure about the question - if it stems from HR's link, I cant open link.
Regarding compelling the landlord to reconnect - if it is disconnected, without a court order, then the tenant can get a spoliation, which means re-connecting.
Spoliation is an intriguing remedy. It prevents peole taking law into their own hands. To put it into perspective, if I steal your car, you then see it parked on the side of the road, take your keys and drive off. I can bring a spoliation against you, to get your own car given back to me, the thief.
If there is no lessee, then no need to evict (perhaps lost in translation)

Yes, unjustified enrichment is theoritically possible, but one would sue for money owed. It is easier to prove than proving the elements of enrichment.

[CLIVE-TRIANGLE]

Anva_Judgement_14042015.pdfThis is the judgement:

[Dave A]

Personally, I find the issue that the lease was entered into by a deregistered juristic entity a particularly interesting twist.

[CLIVE-TRIANGLE]

Yip. It clearly came as a surprise to plaintiff and I would love to know what process they would have followed had they known.

It also highlighted a few other issues for me:
- Plaintiff had ceded right and title to their debtors to Nedbank. I assume as security for a loan, and the respondent claimed that plaintiff had no right to act against them. I wish the judge had addressed this because can you imagine ....
- I advise all my clients to get disclosures on their customers every year, precisely to make sure that they have not been deregistered. You can guess how well that suggestion goes down.

[sterne.law@gmail.com]

Ok.
Can the landlord disconnect the tenant?
Even though the the tenant had no lease, you still need a court order to disconnect. Otherwise it is self help.

The occupant is an unlawfull occupant, so landlord can apply for eviction order.
Even if deemd lawful, in the absence of a lease landlord can give notice.

The demand for payment will be unjustified enrichment as there is no contract so the claim is in delict.