Supervening Impossibility Lease Agreement

Supervening Impossibility Lease Agreement

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Referring to Gamble J in Cloete v Edel Investments (Pty) Ltd 2019 (5) SA 486 (WCC), which concluded that there was in principle nothing that would not frustrate the applicant from being able to be fooled if he had not been deprived of what was due to him and, therefore, nothing prevents the owner: from asserting one of the losses he has suffered. This results in a proportional rental decree according to the rental agreement. However, whether these considerations apply to tariffs and taxes and other recovery fees is less clear, but a tenant remains responsible for all distribution companies that it actually consumes during the lockdown period, for example the electricity consumed on the leased site during the lockdown period. In the absence of a force majeure clause in a rental agreement, South African customary law applies. Under customary law, a tenant is not eligible for a rental permit simply because it is economically difficult to pay the rent due to difficult economic circumstances. To be entitled to a rental permit under the Common Law, the loss of use and enjoyment of the premises leased by a tenant must be the objective, direct and immediate result of the Vis Major. In addition, the tenant must show that the event was unforeseen, uncontrollable and the immediate cause of the incapacity for performance. In this context, if the tenant is not able to use the premises due to the blockage, the tenant can very well claim the remission of the rent. The South African common law principle of impossibility of performance applies to situations where performance of the contract has become impossible after the conclusion of the contract. Where the performance of a contract or the performance of certain obligations within the meaning of the treaty is rendered impossible by reason of unforeseen circumstances or events (i.e. not caused by the parties), the parties are excluded from performance within the meaning of the treaty (or such obligations which have become impossible).

Covid-19: Force majeure — a difficult time to be an owner. If lessors cannot rely on “Force Majeure” clauses in rental contracts, they could invoke the common law of “transfer of the impossibility of service” and even consider operating interruption insurance coverage. Generally speaking, these clauses stipulate that in the event of written notification to the other party, the corresponding obligation will be set apart during the pursuit of the innocence caused and that this party will be released from any liability during this period. In the event that a rental agreement includes a force majeure clause, the specific conditions of the force majeure clause determine whether the tenant is entitled to a reduction in the rent to be paid or to payment. . . .