Whilst it is accepted law that a landlord is entitled to give a commercial property tenant only one month’s notice to vacate the premises where the tenancy has continued by agreement on a month-to-month basis following the lapsing of the original agreement, the Johannesburg High Court recently set out the circumstances where, and for how long, the eviction from commercial property can be suspended to enable the tenant to relocate.
AGB Properties CC v Sello 2018(1) SA 535 (GJ)
- The landlord had already secured a new tenant, Pepkor, which intended opening an Ackermans store when it gave the tenant, sole proprietor of the Kempton Gate Pharmacy, one month’s notice to vacate its premises. The tenant objected that the one-month notice period was contra bonos mores (against public policy), and thus unenforceable under the common law, because of the potentially devastating effect eviction would have on the business and its 22 employees, some of whom were single-parent young women.
- Judge Spilg in the Johannesburg High Court pointed out that the court retained a residual common-law power to suspend (but not decline) an eviction order so as to give a tenant a reasonable time to vacate the premises.
- The court’s powers to suspend are the same, whether the eviction is from a commercial or residential property. A reasonable period for a commercial property is determined by the nature of the business conducted there and the time reasonably required for the tenant to relocate his business activity.
- The commercial realities underlying the balancing of the parties’ competing contractual or other economic interests have to be taken into account.
- In this case, the tenant had never breached the lease and always paid the rent on time. The landlord however had negotiated a new lease with Pepkor without informing the tenant, or affording the tenant a fair opportunity to relocate without suffering prejudice, when the landlord could have done so.
- The economic reality was that the tenant faced financial ruin if he did not find suitable alternative accommodation. Giving the tenant three months to relocate would serve not only the interests of the tenant and his employees but also the clients and customers which his business served.
- The court relied for its decision on the leading case of City of Cape Town v Rudolph and Others 2004(5) SA 39(C), where Fairbridges Wertheim Becker acted for the City.