Lockdown: 32% of SA tenants failed to pay April rent in full

Imagine what the month of May could hold for South African tenants if April was this difficult. Especially if another lockdown extension is announced.

Lockdown: 32% of SA tenants failed to pay April rent in full

On Sunday 19 April, a total of 32% of South African tenants had failed to pay their rent in full for the month of April. This, massively due to the effects of a lockdown and later, a lockdown extension. 

Speaking of lockdown extension, President Cyril Ramaphosa is due to address the nation on Tuesday 21 April, regarding the effects of lockdown and the way forward. 

Rent collection now the main priority

According to the Tenant Profile Network (TPN), as of Tuesday 21 April, 64% of tenants paid on time, 16% of tenants partially paid their April rent and 16% of tenants have still not paid. 

Preliminary data indicates that 64% of tenants are paid on time for April, 2% down from 2019 figures, but far off the 2014 highs when 71% of tenants paid on time. 

“The main priority right now is rent collection, there is still time in April for late payment collection which of course will reduce the number of tenants currently reflecting as partial or non-payers,” said TPN Managing Director Michelle Dickens. 

The real challenge will be in May

The real challenge facing landlords and tenants is the May rent. April seems to be nothing more than a warm-up round. 

“By this stage in lockdown, many tenants have faced a full month without any pay or a smaller percentage of their normal pay. The stark reality for many tenants with limited or no income for the month of April means they are facing 1 May with no savings for rent,” said Dickens. 

Evictions have been specifically prohibited during the lockdown, as have sheriff services for evictions. 

“TPN has seen a 30% surge of tenant letters of demand as landlords continue to demand rent and prepare for cancellation of leases and possible eviction post-lockdown,” added Dickens. 

TPN, however, came up with a solution to take off some of the pressure. Enter the TPN Deposit Utilisation Agreement. 

Tenants who have legitimately lost part or all of their income can submit their Income Declaration Application to the landlord with supporting loss income documentation. The landlord and tenant can agree that the tenant’s deposit may be used as rent, and the tenant agrees to reinstate the deposit after the State of Disaster has been lifted. 

This provides instant liquidity to the landlord with the certainty of deposit reinstatement. The Rental Recovery Pack, which includes the Income Declaration Application, Deposit Utilisation Agreement and Rent Deferment Agreement is free to download and use at the TPN Shop.

Source : The South African More