South African Independent Tenants Association Proposed Joint Legal Action Against Landlords in the High Court

The lockdown in South Africa has put a massive strain on the economy. According to Statistics South Africa, 73% of small enterprises warned that if the lockdown continues for longer than three months, it is most likely that they won’t survive, we have now reached the tipping point as we enter the thirteenth week of lockdown.

By now, the majority of Independent Retailers have exhausted their capital reserves, maximised credit facilities with banks and done everything within their means to soften the impact of this lockdown.

Dr. Ivor Blumenthal, CEO of SAITA says: “Truly Small Retailers and Businesses fall between the cracks when Governments recognise Small as businesses doing R80 Million Rand turnover instead of the more likely R15-R20 Million. Landlords are used to bullying Small Tenants into leases and then holding them to those leases for ridiculous periods of time.”

During the past week South African Independent Tenants Association (SAITA) has engaged with counsel to establish what relief there is in law for SAITA members against Landlords who persist in demanding full or part rentals during the period of the Covid-19 pandemic.

There is a solution; a joint legal action against landlords in the High Court with a view to having the matter finally settled by the Constitutional Court if need be. There is an opportunity for Independent Tenants to join SAITA as members and be part of this very vital case.

SAITA’s objective is to approach the High Court on behalf of members to rule on the interpretation of rental clauses insofar as they relate to the Covid-19 pandemic. Specifically, whether tenants are obligated to not pay rent or to have rent already paid refunded.

SAITA will be the party undertaking the action to ensure no reputational risk for tenants with their landlords.

We anticipate opposition from landlords and that our action may need to be finalised in the Constitutional Court. To ensure the action is affordable for all members and of benefit to all members, now and in the future, we need to act as a collective.

“We urge all SAITA Members, and Retail, Commercial and Industrial Tenants who have not yet joined SAITA to join us, in what we believe will be the most important and worthwhile cause which you will have, to benefit both your businesses and yourselves as the people responsible for funding those businesses. We have no idea how long Covid19 will continue to play havoc with our economy and your business. Even if you have re-opened your business, we believe you should be compensated from unnecessary Rental charges for April, May and for as long as this Lockdown lasts. This is the best solution which SAITA can offer you,” ssays Ivor Blumenthal, CEO of SAITA

To join SAITA and be part of this landmark action, email saitacommunication@gmail.com with YES COVID LEGAL in the subject line. We will email willing participants a schedule explaining what we believe are affordable costs and an explanation of all documentation required from each participant.

In-response to a question about costs, Blumenthal explains that the “War Chest” necessary to properly lodge the action and defend against Landlords who have very deep pockets, will require a minimum of 375 SAITA Members to contribute a once-off payment of R4000.00 each.

SAITA takes the view that two outcomes will be required.

The first objective is to achieve a Court Decision requiring Landlords to discount rentals where no trading has been possible through no fault of the Tenants, with no conditions such as Lease Extensions and where Deferment is not an alternative to complete discounts. Dr. Blumenthal says that his team believes that this “is achievable in a time period which possibly could save many hundreds of small retailers who simply do not have the resources required to pay unfair and immoral Rent Bills, when they have no access to any income and turnover whatsoever.”

Blumenthal adds that the second outcome is Legislative changes, which will take longer to achieve but has to be fought for if SAITA is to do justice to the cause of its Small Retail, Commercial and Industrial Members.

In the words of Henry Ford, “Coming together is a beginning; keeping together is progress; working together is success” – ensure our collective success and join SAITA today!

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