MONEY CLINIC: Is it legal for our landlord to charge us a R500 late penalty fee during Covid-19?

A Fin24 reader financially affected by the coronavirus outbreak has been charged a penalty every month for late rental payments. He wants to know if he is legally obligated to pay it.

He writes:

My wife and I have been affected financially by the Covid-19 pandemic, just like everybody else. We have been making partial payments for our rent, but always clear the balance by the time the next bill comes.

Our problem is the rental agent is charging us a R500 penalty every month for late payment and still demands the rent in full. No eviction threats have been made yet.

Is it really legal for them to put the penalty on us every month, because this has inflated our rent amount by R500, and who knows how long this coronavirus crisis and lockdown is going to last?

Liad Hadar, Director at Hadar Incorporated Attorneys & Conveyancers responds: 

Dear Reader, 

With regards to the late rental penalty – we must first analyse the terms of your lease agreement. 

Assuming that your lease agreement contains a late penalty clause, which allows for a R500 penalty for late payment of rental (i.e. rental not paid into the landlord or his/her agent’s account timeously), this penalty is justified as it was contractually agreed upon. 

If there is no such clause in your lease agreement and assuming that you have never actually agreed to such term as a tacit term either, the penalty is unlawful and stands to be removed. 

If the clause is in your lease agreement, our practical solution is to ask the landlord for an indulgence and request that such penalties be removed, especially given the current crisis. Your intention to pay, and efforts to do so, albeit late, are a sign of good faith and I would ask the landlord for assistance in this regard.

Compiled by Allison Jeftha. 

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