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Landlords beware: What happens when your tenant is liquidated?

Most landlords will argue that they will have no trouble in terminating a lease agreement and evicting the tenant should the lessee go under business rescue, liquidation or sequestration, as a clause was included in their agreement which enables them to terminate in these circumstances.

The clause mentioned above, does not however provide any protection to the landlord as Section 37 (5) of the Insolvency Act specifically stipulates that such a term in a lease shall be null and void.

Thus, if the lease is still intact at the time of issuing of a sequestration or liquidation application, then the landlord will not be in a position to terminate. The decision to continue with the lease, will fall within the sole discretion of the trustee appointed to liquidate the insolvent estate. The trustee now has a discretion to, within 3 months after his appointment, notify the landlord whether he/she desires to continue with the lease on behalf of the estate, alternatively to proceed with cancellation of the agreement.

The rent due for this 3 month period will form part of the cost of the sequestration.

Consequently, the landlord will have a preferent claim against the tenant’s estate, but will have to wait for money to be paid out of the liquidation/sequestration.

How does one prevent such an unpleasant situation?

In short, it is imperative that a notice, as envisaged in each lease agreement, notifying the tenant of its breach or arrear payments, should be sent as soon as reasonably possible, on each and every occasion of default by the tenant.

This advice is based on the matter of Ellerine Brothers (Pty) Ltd v McCarthy Ltd (SCA), where it was held that should such a notice be served before provisional liquidation, and the tenant/trustee fails to comply with payments required, then the landlord will still be entitled to terminate the agreement, even though the tenant is subsequently liquidated or sequestrated.

Thus, the sooner you demand payment in terms of the lease agreement, the better the chance of terminating the agreement if the tenant becomes insolvent.

Charl Ackermann

charl@vwvh.co.za

Director: Rental collection and commercial evictions department

Bianca obtained her LLB degree from the University of Pretoria in 2013. She was admitted as an Attorney of the High Court in 2016 and subsequent as a Conveyancer in 2018. She specializes in the drafting of contracts, conveyancing and all other property related matters. She is dedicated to excellent service and good client relations.

Danie began his law career in Pretoria, Gauteng, where he opened his own law firm in 1994. Through Danie’s knowledge of the world of media and entertainment his clientele extends to music artists, celebrities, television, and film production houses. In 2000 Danie founded the firm West & Rossouw with colleague Sharon West in the Cape Town Southern Suburbs until March 2024 when Danie accepted an appointment to relocate to the fast growing Cape Winelands to join van Wyk van Heerden in their Paarl office. Danie has a strong interest in family law and High Court litigation, with vast experience in several jurisdictions and high-profile cases in the High Court, the Supreme Court of Appeal, and the Constitutional Court. Danie has been actively involved in the organized profession and served on the Cape Law Society and the Law Society of South Africa (LSSA) communication committees and several years as vice-president of the Cape Town Southern Suburbs Attorneys’ Association. During August of 2022, Danie was appointed by the Premier of the Western Cape, Alan Winde as the Western Cape Government’s representative on the Council of the Stellenbosch University.

Alicia obtained her LLB degree cum laude from the North-West University, Potchefstroom, in 2020. She commenced her articles during 2020 at Van Velden-Duffey Inc, situated in Rustenburg, where she acted as a candidate attorney in the civil litigation department.

Alicia was admitted as an Attorney of the High Court during early 2023, and currently practices as such in the litigation department of Van Wyk Van Heerden.

Maryna obtained her LLB Degree at the North West University, Potchefstroom. Originally from Clanwilliam, she went to school in Paarl at Paarl Gymnasium and returned to embark on her professional career at our firm. She joined our team in 2021 as an article clerk and was admitted as an Attorney during 2023. Maryna is currently appointed in our Estates Department in the Wellington Office.

Milton is a well organised Attorney passionate about offering multidisciplinary legal service, focusing on the best interest of his clients. He aims to provide impetus to the vision of creating new momentum in transforming the legal system. He values cost effective solutions on various matters of law, persist on a flexible approach and strive to allocate the necessary resources to satisfy his clients' needs.


Milton obtained his LLB degree in 2020 from the University of the North West. He was admitted as an attorney of the High Court of South Africa on 3 March 2023. He specializes in Civil and Commercial Litigation, Alternative Dispute Resolution, Mediation, Contracts, Sports Law, Construction Disputes and Insolvency.

Anika obtained her LLB in 2020 from the University of Stellenbosch. She completed her articles at Van Wyk Van Heerden in 2022 and was admitted as an Attorney of the High Court at the beginning of 2023.

She currently practices in the Conveyancing Department where she assists estate agencies and developers, as well as marketing of the firm.

Gawie obtained his BComm and LLB Degrees at the University of Stellenbosch during 2009 and 2011 respectively. He completed his Master of Laws during 2017 in the Law of Trusts and completed a Post Graduate Diploma in Financial Planning during 2019.

He joined the team at Becker Bergh & More Inc. for his articles in Upington during 2013 and worked at the firm for 9 years attending to litigation, conveyancing and commercial matters. He was admitted as Attorney and Notary Public during 2015 and as a Conveyancer during 2016.

Gawie was appointed in the Conveyancing and Commercial Departments of Van Wyk Van Heerden during 2022 in the Wellington Office, providing clients with expert advice on the structuring of transactions, the registration of Trusts as well as general Conveyancing.

Liesl graduated from the University of Stellenbosch with an LLB degree in 2005.  During University she developed a special interest in and passion for Family Law.  Due to the fact that Liesl specialised during her articles, she completed the Practical Legal Training Course presented by UNISA, in conjunction with her articles, which she commenced with Miller du Toit Cloete Inc in 2006.  She was admitted as an attorney of the Western Cape High Court, with Right of Appearance in 2007.

Liesl co-presented a paper titled “African Charter on the Rights of Children” at the London Metropolitan University Summer School in 2011 and received her Certificate of Completion in this regard.

Liesl commenced her articles at Miller du Toit Cloete Inc, under the guidance of Zenobia du Toit, in 2006 and went on to practise as a Senior Associate there for nearly 14 years. After moving to Paarl, she practised as a director of Family Law at Clark Cupido Attorneys.

Liesl joined Van Wyk Van Heerden Attorneys in April 2022, as head of their Family Law department.  She has practised exclusively in Family law and ancillary matters for 16 years.

Roeline specialises in Estate Administration. Roeline obtained her B.Com Law, LLB and LLM (Estate Law) degrees at North-West University in 2006, 2008 and 2010, respectively.
After she completed her articles in 2010, she joined a financial institution as an estate administrator.

She joined the team in 2022 and attends to all Estate matters.

Aleisha grew up in Durban and relocated to the Western Cape to attend the University of Stellenbosch where she completed a Bachelor of Arts Degree in Social Dynamics from 2011-2013. Thereafter she obtained her LLB degree through the University of the Free State with distinction from 2014-2017. She joined Van Wyk Van Heerden in 2018 as candidate attorney and gained experience in various fields of the law, with a special interest in Property Law and the Administration of Deceased Estates. After qualifying as an Attorney and Conveyancer during March 2020 Aleisha joined the team assisting in the Conveyancing and Estates Departments of the firm.

Gaynor obtained her LLB degree in 2012 from the University of Stellenbosch. She then completed her articles at a law firm in the North West Province where she gained experience in General Litigation, Family Law and Debt Collection. In 2016 she moved back to the Western Cape and finally joined the firm in November 2018 where she currently heads up the Debt Recovery Department.

Mariska obtained her Bachelor of Arts and LLB degree from Stellenbosch University in 2018 and 2020 respectively. She completed her Master of Laws, with a special interest in Children’s Rights, in 2021.

She commenced her articles at Van Wyk Van Heerden in 2022 and was admitted as an Attorney of the High Court at the start of 2024.

She currently practices in the Litigation Department where she assists with, inter alia, Magistrate Court litigation; Divorces; and Evictions.

Leonette completed her studies at the University of Pretoria and obtained her LLB degree in 2009. She practised in Rustenburg for 8 years and specialised in debt Recovery, debt review and related matters.

Leonette joined the firm in 2017 and manages all correspondent work.

Carla grew up in the Free State and decided to relocate to the Cape Winelands to study law at Stellenbosch University. She obtained her LLB degree in 2002 and furthered her studies at the University of Cape Town’s School for Legal Practice where she received the Dean’s award for the best student in Business Management and Administration.

She joined the litigation department at Van der Spuy & Partners as a candidate attorney where-after she decided to pursue a career in property and commercial law, specializing in sectional title schemes, security estates and developments, servitudes, subdivisions and consolidations as well as commercial contracting.

Carla heads up the Conveyancing Department of the firm and mainly assists estate agencies and developers and is actively involved in the marketing of the company.

Charl obtained his law degree at the North West University in 2008. And finalised his articles at Van Velden & Duffey Attorneys where after he practised at the same firm and became a director in 2014.

Charl was recruited by Van Wyk Van Heerden in 2017 to strengthen and assist our growing litigation department. He handles a wide range of litigation matters including company, family, insolvency, banking and delictual law.

"Quick, practical and commercial resolution is first priority"

Willem van Heerden is a Director at Van Wyk Van Heerden in the dispute resolution, litigation and mediation department. He specialises in contractual disputes, company law, shareholder issues, evictions, family law, banking law and insolvency law. He provides sound strategic advice and direction on all commercial and company issues.

He is an accredited commercial mediator as well as a business rescue practitioner.

He has encouraged the appropriate use of mediation in the resolution of all disputes.

He has acted for various international and cross border trade, transport, agricultural and construction companies. Willem has acted for major banks, insurance houses, leading retailers, property groups as well as high network of entrepreneurs and individuals. He serves as a trustee on a number of trusts.

Willem has written various articles and is a co-author of a published legal book on farm evictions.

Qualifications

  • BCom (Northwest University)
  • LLB (Northwest University)
  • Postgraduate Diploma (VRIJE University Amstelveen )
  • Admitted as an Attorney of the High Court of South Africa
  • Accredited Business Rescue Practitioner (University of South Africa)
  • Accredited Commercial Mediator

Nazlee Abrahams grew up in Paarl and obtained the degrees B.Sc. and LLB from the University of Stellenbosch in 1992 and 1997 respectively.

She commenced with her articles at Van Wyk Fouchee in 1998 and was admitted as an Attorney with right of appearance in the High Court in 2000 after which she consequently became a Director at the firm.

In October of 2002 she was admitted as Conveyancer and also Notary Public in 2006. She currently manages Bonds registrations in the Conveyancing Department and further specialises in family & marriage law, drafting of wills, administration of estates and all notarial work.

Nazlee makes a valuable contribution in pro-bono work when the opportunity arises and invests a considerable amount of time in community service. She also serves as the current Chairperson of the governing body of William Lloyd Primary.

Anville specialises in Property Law, General Commercial Law, Estate and Tax Planning, Administration of Deceased Estates and Trust Law. Through the years, he contributed to the community life in Paarl. He was a founding member of the Drakenstein Rotary Club in Paarl, founding member of the Paarl Attorneys Association, served as Captain, President and Chairman of the board of the Paarl Golf Club and has played a major role in establishing the Boschenmeer Golf and Country Estate.

Anville obtained his BA LLB degree at the University of Stellenbosch in 1974. He served his articles with Silberbauers Attorneys in Cape Town and joined Solomon Miller, Hymie Maisel and Willem Gaum in Paarl in May 1977.

He is an experienced and seasoned attorney who commenced his career in litigation and migrated into Commercial, Trust and Tax work. He obtained his post graduate diploma in Tax Law at the University of Cape Town, with distinction, in 1993.

Anville celebrated his 40th year in practice in 2017.