 Good evening and welcome to Episode 353 of the Private Property Podcast. I'm your host, Usama Ndumuakumalo. As the Friday edition of the Private Property Podcast, we join us for the first time. Welcome to the family you're tuned in to the early daily property talk show in South Africa, catering to your property needs. To all our regular viewers on Facebook, on Instagram, as well as on YouTube, welcome back. You know how we do it every single weekday. You and I have an appointment. We're always tackling a property issue and always having somebody who's a property expert who helps us make better property decisions. And I think if anything today is a Friday, it's been raining in Jobork. We finally have the first summer rains and of course, a lot of our robots in Jobork are also unfortunately not working. It's actually talking to my guests and the team behind the scenes that look, it's we're not there. We're not there. But we're here a few minutes later than we typically are. And then one of the great things, of course, that you can look forward to as it is Friday and you're getting ready for the weekend. Also, the other great shows that you're able to catch across private properties and social media platforms. As it is a Friday, you can catch the home shopper show with Chad that comes to your screens every single Monday and Friday at 8pm. And on Tuesdays and Thursdays, somebody brings you the forming podcast and they're not running a grade series, a gardening series, that you can look forward to very regularly. And I think that's one of the things that so many of us would probably want to help with, especially now that the rains are here. And you probably want to spend a bit of time in your garden. And on Wednesdays, Esti Klassen brings you the first time home by a show. But she's always in conversation with people who have gone and grown their property portfolios from strength to strength. And of course, we are running a great competition here on Private Property where we get to give away 500 rounds in cash every single evening. And all you have to do is turn a chance of walking away with that is comment on the pinned post on our Facebook page. And you also have to watch us live. That's really the only catch with how to claim the money. You have to watch all your name. Then you need to drop us a message to claim the prize. That's that easy. And if we don't have somebody who claims it, the money goes into the money bag and the following day, it just keeps growing. So later on, you'll get a snapshot of who's potentially the winner of that 2,000 rounds that is in the money bag. Imagine starting off your payday weekend with that 2,000 rounds. I know some people saying that, look, the money that we got on Friday or rather than the money we got last week, say, pay Lee, it's almost like really was the September salaries, of course, to last us up to this point. So if you want to make sure you win that money, make sure that you stay tuned and should we call your name, drop us a message. This evening, we're talking about something that I absolutely love. I was even saying to my guests, we're looking at second legal disputes between landlords and tenants. And I think this is one of those things. I'm a landlord. I've been a tenant. And one of the things about sometimes being a landlord is you might be a landlord and also a tenant. And sometimes you might be a residential tenant or a commercial tenant. So really, a lot of us always need to find ways of understanding some of these disputes and how to settle them. And today, we're going to be looking beyond even settling them. We're also just getting a sense, what are some of the typical disputes that we generally get and how do we sort of go about rectifying them? And also, how do we make sure we prevent some of these disputes? We tend to find that more often than not, these things are avoidable. And to help us get a better sense of how we can go about doing that this evening, I'm joined by Leah Harder, who's a director at Harder Incorporated. Leah, good evening. And thank you so much for coming back on the show this evening. Azama, thank you so much for having me. It's only a pleasure. I think, Leah, before we even look at the settling part, right, I think that's sort of the second aspect. What would you say are some of the typical disputes that landlords and tenants would have? Because I think it's great to just first get a sense of what kind of disputes are we actually talking about? Azama, there's so many, but I think the basic ones I can think of at the top of my head are utility disputes, overcharging for water, electricity, or anything else. The disputes are with maintenance. For example, tenants said they've got a big issue with the maintenance matinee. You know, it could be a light bulb. It could be that simple, or it could be something as major as a Giza. And there's disputes as to who's responsible. And just there's a number of disputes that are practically faced by landlords and tenants day-to-day in their relationship. When you started with the utility line, part of me was internally screaming, because I think it is, unfortunately, one of those things, when I think about how rates went up, utility bills kind of went up, I think it was two, three months ago. And it's a shock, right? It's a shock to tenants. And even as a landlord, because you live somewhere. So even if you're living in a property that you own, you've also seen your own utility bill go up. And sometimes you think, well, maybe I'm being mischarged for it. And I know that tenants would be like, there's no way that this is actually my charge. And that's how some of these things often start. Before we look at the settling part, how can we go about almost trying to avoid some of these disputes? Because I think I can already think at the top of my head, a lot of them who stem from, and I nearly said on OTP, but stem from a lease agreement and some of the terms in the lease agreement, whether the one party didn't read it, and often sometimes the landlord. I mean, the tenant. Before we look at how we should go about settling it, how do we avoid some of these matters? Because we already know not a lot of us, both landlords and tenants alike, can actually afford a legal dispute and having to get attorneys in. So what are some of the ways that we can use to, at the very least, avoid having to get to a legal dispute? Okay, so for me, it's quite simple. First and foremost, it's having a clear and concise lease agreement signed by the parties. Now, there's going to be some amendments to the Rental Housing Act soon, which we'll make hopefully soon. It's been a while now, but we should make a legal requirement to have a lease agreement reduced to writing. I think that's critical. I think that's good form anyway and good practice to have that done anyway. But the major reason for that, for me, it comes down to intangibles, which is understanding of your responsibilities from both sides. So the clear and concise lease agreement, and for example, it says, although it doesn't usually, but the Giza is the tenant's responsibility. It's not usually the case, but let's say that this particular deal, that's what the lease says. It's very easy for landlord to refer back to that and say, listen, tenant, I understand your issue, the Giza's burst, but look in the lease clause 3.1.2 says that it's the tenant's responsibility to maintain and replace the Giza. It's a ridiculous example, of course, because the Giza is usually done by the landlord, but you get the gist of it. If it's reduced to writing and signed by the parties, you can pretty much agree anything you want. So that's number one, clear and concise lease agreement, signed by the parties, and you can always refer back to it. The second thing, it's hugely important transparency in the relationship and the communication. So for argument's sake, when a tenant asks you or has an issue with a utility dispute, as you said now, utility charge, the first thing you need to do is communicate the landlord that's charging you. That's the municipality that's charging the landlord. You just pass it on. In fact, it's actually unlawful to make a profit on electricity and utilities in any event. So all I'm saying is that shows great transparency. If you can attach a great communication, if you can attach the invoice for argument's sake for any municipality, and that's one of the key things is transparency and communication, because it leads to a diminishing of the distrust element in the relationship. So those are my top concerns, lease agreements, and transparency and communication. And yeah, I think one of the things that we do underestimate when we are tenants, I'll wear the tenant hat for a little bit, is we generally just have that sentiment that landlords are just out to make money, make my life difficult, and overcharge me for searching things. And so even though we know that rent is the amount, so the fixed costs are this amount, the unfortunate thing with utility charges, especially when they're not prepaid, is that they do fluctuate. And more often than not, when you do see that increase, your needed assumption is, oh, they're trying to make a quick buck out of me. And sometimes it kind of starts there, where you have that perception, and I know we tend to have it. It's not just a South African thing, almost over a lot of us just seem to feel landlords are just out there for blood. But when you see the figures, as you say, when you actually say, oh snap, this is actually coming from COJ, or whoever, let's say if it's from the complex, this is the amount that's coming through. I think even you as a tenant realize that, okay, this is not my landlord trying to be malicious, or make a bit of money from me. And it's such an important thing for us to be able to do, because unfortunately we're not used to having those kinds of relationships with our landlords. It's usually just that love-hate relationship. It's almost like the relationship with the text man. But you know, I just kind of have to do this thing, but you don't need to kind of be friendly with them. So I really like that transparency becomes a good thing. And I hope the landlords are listening, because sometimes it even goes to, when you start the relationship with your tenant, start it on that front. So don't even wait for the part where they end up complaining, because one of the realities is more often than not, during, you know, when we approach the winter season, that's when some of these bills also tend to go up. So when you've been sending that from the get-goal, they know that if winter comes, and suddenly the electrical bill goes to 2,000 rounds, you're not suddenly being transparent, because you're kind of saving face, but you've been doing it from the get-goal. And I want to find out from you at home, whether you're a landlord or a tenant, have you had certain disputes, whether they ended up being legal disputes, or you are able to resolve them before getting attorneys in the mix? How did that go about? And I really want to hear from both landlords and tenants, some of the issues that you may have had with your tenant or your landlord, and the different ways that you went about resolving those issues. Do share with us down below, whether you're watching us on Facebook, Instagram, or of course, about settling these matters. Let's go for a quick break and see who that potential lucky winner is. And that lucky winner this evening is Utsepo Steven Magubo. Tsepo Steven Magubo. Hope you're watching. 2,000 Rounds is up for grabs right here on the Private Property Podcast of myself, Osamandouma Kumalo. This evening, as we look at settling legal disputes between landlords and tenants, you have until the end of the show, it's up for you to grab that 2,000 Rounds that is in the money bag. And of course, I'm in conversation with Liyad Haader, who's the director at Haader Incorporated. Now, Liyad, in the unfortunate event where whether you're a tenant or a landlord and you do find yourself in a matter where you're now having a legal dispute with your tenant or your landlord, what are some active steps should you be taking? Because I think the reality is more often than not the one party, typically the landlord is the one who would probably know to go to an attorney first as opposed to it being really the tenant who does that first and would know to the itself, whether it's a letter of demand or whatever kind of legal document that gets served. What are some of the dos and don'ts, especially in the early stages of a legal dispute between a landlord and a tenant? Okay, Osamandouma, so now I can speak quite openly about the fact that I represent pretty much 95% of our clients are landlords. So I'm very centric. I'm going to give you a bit more information about that. We litigators, right? Litigators like to litigate. That said, I didn't call three different types of law firm. We looked to settle as a full of first call because we feel that there's much more value in that not only for our clients, but the fact for the tenant as well and the entire relationship is an element of fairness and justice in it. So I've got many thoughts on it. You'll never, I think, regularly or often here from a litigator who's dissuading you from litigating and going against the business model, right? It's quite silly. But I think I said this last time I was on, but I really genuinely mean it. I think there's so much more value to our clients as landlords and settling the matter amicably. Now, here's the main reason for it. And I just was reading a Harvard Business Review at the article earlier today. In America, legal disputes and litigation cost $20 billion to the major corporations. $20 billion a year to major corporations only. It's not the whole country. And the reality is what this report is talking about in the Harvard Business Review is it's not just the money that you're spending on litigation, but it's having key personnel also being kept busy in litigation going to what they call their depositions and what we would call in court here, I guess, court hearings and everything else. And consultations and whatever. So you're not only losing financially on legal fees, you're losing a lot of time. And angst is added to the equation. Now, translate that now from a corporate to an individual landlord. It's amplified by that much more. You're an individual landlord with one property, right? And you've got a tenant in place. Not only are you incurring legal fees, you're already anxious and feeling upset about the tenant and the situation. So your blood pressures through the roof, your health is being affected probably. But you're also spending a lot of time on it. And you probably at times, unfortunately I've seen it with individual landlords, you become besotted almost. You can't let go of the matter. It takes over your entire day. It takes over every thought you've got and you just feel this anger all the time. And I'm saying, trust me as a litigator, do not litigate. I mean, it's crazy. You can use that as a headline, I guess. As I say, business planners will say to me, what kind of businessmen are you? But I'm telling you now, it's a good thing to do. So after a long period of summary on it, I must tell you a personal example. And it literally happened to me in the last week. I've got a, actually a tenant came to me for one of the 5% that happens. It came to me. They've got a company in a commercial office. It's a commercial slash industrial. So they've got an office and a warehouse in there. And they came to me about four months ago with an issue with the landlord. And the landlord happened to know and I thought they'd be reasonable. So I said, guys, you know what? Let's sit around the table and let's not litigate. You're in the cusp of litigation here over a million rent. There was the arrears that accrued after lockdown and everything else. I'm not going to mention clients' names, of course, for confidential purposes. But the one company is in the alcohol industry and the other one's the landlord. And obviously they're heavily affected by the restrictions and the bans being an alcohol industry. So I went to the landlord with them and I said, okay, guys, instead of litigating because you guys had each other's throats, it was quite a buildup of animosity. I said, let's try settle this matter. I know both of you and I think we can settle it. I think they both looked at me quite strangely and saying, you know, why are you considering this approach? And I just said, I can guarantee you long term if we can resolve this matter and you sign your new lease for five years, which is their intention, and avoid litigation, you'll both be happier for it. So fortunately, they both gave me a chance and they listened to me and we mediated of sorts. It was informal mediation where I listened to both sides, I listened to the tenant, I listened to the landlord separately, and then I tried to come up with solutions. And we had a few back and forths. In fact, it took four months. And I can tell you as of last week, sorry, this week, we signed the lease and everyone is as happy as they can be in the circumstances. And when I told you we were on the cusp of some serious litigation, I'm not joking. We were about, or we were, I wasn't going to ever get involved in litigation side of things, but we were about, they were about to go at each other. It would have cost them both hundreds of thousand rounds in litigation fees. It would have not helped either of them to concentrate on their core businesses. The landlord to have a tenant in place and collect rental, and the tenant to operate and try run a business at a profit. So it's testament to the real power of settling matters. And that's why I said in my topic, is settling is a sign of strength. It's not a sign of weakness or people think it is generally speaking. So that's my story on why settling is actually a better thing for you. And you know, as we've been saying, it's strange that a litigator would say don't litigate. And I know there was also just something that you said the last time you were here, but I think it actually speaks because some of my best friends are attorneys, and even they typically would say, try to not, you know, litigate. Try to whatever the matter is, don't go to court. We can send letters, send letters, but really the core of it is let's have a sit down. Let's see how we can manage this dispute outside of court, because those things can drag, plus with it being COVID, we'll probably drag even longer. The cost of it is actually so high. And I think when we look at the residential side is both parties usually just cannot afford that, right? Not just the tenant, but even you as a landlord, for the most part, cannot afford to end up in a long legal dispute with your tenant, who by the time you probably even see court is now no longer your tenant. So I think the very first big thing is the aim should not, the aim should be that you're not, it's not, you're not going to litigate. You're not going to get to court. Try to resolve it as early as possible. And so Leah, we're in the event where we now know that we're not going to be litigating. We want to be able to settle and get in the boardroom with both our attorneys. Then what kind of trips will you share with us when we're in that space? Because I think the reality of a lot of those kinds of disputes is one party sometimes may feel very heavily agreed and still want some kind of recourse or remedy. The other party might think, well, I actually didn't do anything. I shouldn't have to be, whether it's paying X amount. So what are some of the dos and don'ts when we then find ourselves in that particular space where we're very clear that we're not going to try and take anything to court? Because you're a normal tenant in a residential property and you're also a normal landlord who's probably got a few properties in your portfolio. So both parties from a financial perspective certainly don't have the means to want a drawn out thing. What should we be doing and not doing when we're now looking at resolving and settling that matter in an attorney's boardroom, for instance? Okay, so I'm going to say something as equally controversial as don't litigate, coming from a litigator. But I'm speaking now from 11 years of experience in residential evictions. I'm talking to the landlord right now. And a residential eviction is a very costly process. You're looking at $18,000 rent in legal fees plus sheriff's cost and a few months of not collecting rent. Once you've gone to war, you've gone to war. Don't expect the tenant to continue paying once you've decided to try and take them. So again, it's going to be controversial, but this is a very practical tip I've got for any landlord. Offer the tenant money to pay a deposit elsewhere. And I'll tell you why I say that. And it goes against my grain and it also goes against the justice in this world. Someone that really owes you a month or two worth of rental and you're saying, here's money for you to go away, but just hear me out for a second. If you don't do that and you go to war, the reality is you're going to be incurring those legal fees I just spoke about. You'll be then having a matter heard within the next three, four months until you get the eviction order, let's say with the person actually evicted, two, three, four months, and you won't get rental for that time. That's going to cost you much, much more than offering someone seven and a half thousand and let's say that's their rental and say, here's the money, go and pay a deposit somewhere else and please get out of here by the end of the month. It's a bitter pill to swallow, but trust me, trust me again from experience only and from seeing the pain and not wanting to see the pain. It's going legal and having the legal fees rack up and the time that it takes to evict someone, two, three, four months, it's much more painful than that initial horrible sting of paying someone seven and a half thousand rent to leave if that's their monthly rental. Trust me, you'll get them out if they agree to the deal, obviously, you'll get them out quicker and cheaper. Again, those against business model of a law firm, but take this as your free advice for the year and if you can, or matters like this, please do. The only time you should go and litigate a tenant is really being unreasonable. If you as a landlord are being very reasonable and a tenant's being very unreasonable, to the extent that they won't even take money to leave, then you have to litigate and the gloves are off and you're welcome to come to us and the claws will be out and every other sort of phrase I can use will use against these guys. But try to be practical and try to get the quickest possible solution for your own sake. Forget their sake, forget your ego and forget all the angst inside of you and the anger. Just get the result as soon as you can. That's one practical tip that I can give you and that's probably my number one tip for eviction issues between clients because it also gives the tenant the out. You say, tenant, you're unhappy, I'm unhappy. He has money to go somewhere else as a tenant. You're not happy here, go there and I'm going to help you on your way. I promise you that if you do that, hopefully one day if you're a landlord listening to this and you've had the troubles of evictions before and you know it's costly, you know it's time consuming, you'll hopefully thank me when you've successfully done this kind of settlement in a matter and realize that you've got your property back earlier and you can start renting out to a more suitable tenant for your sake. One of the things I appreciate about you is you're a typical attorney who's, I'll say out for, let's see how many clients we can get in as much as possible because you also understand the fundamental big picture. I think when we look at tenants in certain matters, certain matters really don't need to even get an attorney involved, right? Yes, there are certain instances where we absolutely have to especially, as you're saying, when you're dealing with unreasonable tenants but others, and I've never fully and completely in areas and so giving them that kind of out certainly does help substantially because they're thinking, how am I going to then find another place where I'll probably need to pay that seven and a half thousand as a deposit and their first rental upfront and probably be somebody else's problem. I'd rather just stay here and I know that the landlord can't suddenly block my services or whatever the case is. In the event where you then are dealing with an unreasonable tenant and you have to litigate and this is particularly for landlords, what are some of the things that you should not do in that process? And already I hinted on some of the stuff that some landlords unfortunately do where they think I'll block your, I'll switch off water and electricity or whatever the case is but once you now know, you're going to an attorney, you're going full on litigation, what are the dos and don'ts when you're now in that process and your attorneys are now handling the matter? Okay, so Zama, once you go legal then what I would say is take a step back, trust the professional you've gone to, especially if you've gone to a property law spec and hopefully you have because it's a big mistake in my mind if you don't. So once you've gone, trust the professionals. It's like you were the doctor who's performing heart surgery on you. It's not as drastic but it's like your equivalent of your investment laugh line, you know, you need to step back and let the professional take care of it. It's easiest and then done but try relax and try understand that it's now under control and it's going to be handled. Don't do anything unlawful or anything silly. You know, I've got a phone call as you would imagine as a landlord attorney the other day and the landlord's representatives have said, okay, can we lock out now? And I said, absolutely not. I said, but they said to me, will it hurt our case? And I said, to be honest with you, it won't hurt your case. So when we bring the eviction application or the rental collection, it will not hurt our case theoretically but what it will do is make you act unlawfully which means that the tenant, and this is advanced for tenants because I'm actually absolutely pro tenants not being locked out unlawfully, you can go to court and get a spoliation order against the landlord. Now landlords are starting to be very concerned about this because not only can you get a cost order against you in a court application which could be substantial and cost you a lot of money but also it's actually a criminal act in terms of the Rental Housing Act. So you're just going to be careful. I mean, I don't know anyone first and who's ever been prosecuted criminally for breaching the Rental Housing Act but it's a concern. You don't want to be the first bar or girl that gets prosecuted criminally in that regard. So just be a bit wary of that. Actually very wary, not a bit wary. So let's go, let a professional handle it. Do not do anything unlawful. And if you can, this is a do right now, try to be reasonable with your tenants and try to communicate with them still and say it's gone to my attorneys. I don't want to have the anxiety, I don't want to have the emotional approach to it because it's with them now but if we are able to settle this thing amicably, maybe I can write off some of your ears and I can let you off the hook for some of it, please would you commit to leaving by a certain date. That's something the attorney can then pick up on and reduce to writing and have signed by the parties by way of a settlement agreement. So I'm not encouraging you to go chase the tenant after you've gone legal but sometimes that the fact that it's gone legal is that extra push for the tenant to take you more seriously as a landlord and now then capitalise on that and say okay there isn't an attorney on board but you can still settle the math amicably directly with the tenant if you want to and the attorney will confirm that in writing to be made a settlement agreement. And getting some of the comments and how long sometimes the justice system will be resolving certain things the court retakes you would know that you probably don't want to find yourself in that space so you really do want to make sure that you settle outside of court as much as possible and I think the really big thing and I've never heard it anyway with different guests and even different attorneys the option of giving the tenant the rental amount and be like you can go find a place elsewhere that's the tip that I'm certainly going to care with me because we often I think as landlords sometimes think well I've already lost out on two months with the rental why should I have to stay with this person and not understanding the longer term part is that if they then decide to stay four more months and obviously raking up not just the rental so they're living in a place where the utility charge is not prepaid they're also raking that up and potentially even damaging your place because we also know that unfortunately tenants who go into areas due to leave the place in a slightly undesirable way is it not rather financially better for you to give them that amount you know blame it on the game write it off and you know that within a week or two you're able to already put your apartment up or your property up and getting your tenant Neat before I let you go any final tips for our viewers at home when it comes to settling a legal dispute whether you know they're a tenant themselves or if they are a landlord So Zama I just want to touch on what you just said I think you're you seeing a bigger picture and I love that you understanding that it's an infinite game not the finite game where there's no full-time score here you're looking to create an asset that's worth something in your property and you've got to look long term and I just want to touch on that point of paying the controversial point of paying a tenant who's in arrears to leave just do the maths guys I mean it's very simple as a landlord you've got a tenant who already owes you a month or two otherwise you wouldn't be doing any of this right so you're ready in let's assume the rentals five thousand a month you down ten thousand ran plus potential utilities and let's say you go legal and the person digs their heels in and you and even if they don't oppose it they just stay in the premises you're looking at three months worth of non-rental again that's an extra fifteen thousand ran on top of the ten that's twenty five thousand rents then you're looking at legal fees that's rounded up to twenty thousand rents so now you're looking at forty five thousand rents before you potentially have your tenant out compare forty five thousand rents as much as it hurts and the bit to pull the sweater against seven and a half thousand rents paying someone to leave even if you add the current arrears of ten thousand rents at seventeen and a half thousand rent versus forty five thousand rents and you get your premises back almost immediately as you say maybe two weeks you've got to think bigger picture you've got to think that's settling is that ultimately the better results for you pride aside ego aside principles aside for now principles cost money they love to say and it's very very true you can go after them you can sue them you can do anything you want you can get judgment against them there's no guarantee you get your money back and when you evict them there is a guarantee they'll get evicted because i've got a motto at our firm that's a question of when not if we will always evict someone just how long will it take but that time period and that does cost are just not worth it so in closing my final tip about in addition to that tip of paying seven and a half thousand rent whatever their monthly rent is for them to leave is to think strategically about every single matter as a landlord if you want to if you want to save money and time and anxiety settle matters settle them quickly and settle them fairly and to the tenant who are out there trust me you lucky that you're not getting a letter from our firm or summons or eviction order take that money and run trust me it's better for you long term it doesn't affect your credit rating that way you won't have judgments against you you won't have all the anxiety yourself of being sued and have been dragged to court so it's good for everyone so be fair to each other be open minded to settling ego's aside principles gone settle settlement and quick resolution to matters is the big win for everyone Lia I love that you know settle settle quickly and the big one settle fairly and I think one of the big things as a landlord in particular is understanding the fundamental long term view when it comes to real estate it's not just that one tenant or that one property and you know those three months if you've got that asset you know that you might be looking at holding on to it for five, 10, 15, 20 years and so when you take that long term view you know that seven and a half thousand rounds is really a drop in the ocean in the grand scheme of things and I think of anything if you ever find yourself in a legal matter certainly do go to Hada Incorporated because one of the things that you know you're going to be guaranteed is that they're not going to be pushing litigation and as much as it would make business sense for them but what we're looking at how do we resolve this quickly and fairly and as a landlord that would certainly be something that you are looking out for Lia we're going to leave it there this evening thank you so much for joining us on the show it's always such a pleasure to have you Thank you so much I'm looking forward to the next time and that is Lia Hada who's a director at Hada Incorporated wrapping up the Friday edition of the private property podcast with myself Uzaman Dumwak Oomalo and unfortunately what's happened with my Google has not you know dropped us a message down here below meaning Monday the manual is over we're going to tap 2005 and address in the money bag well it is my time to go and of course I'll be back on your screens on Monday evening at 7 p.m. you can look forward to the whole shoppers show with child this evening at 8 and until then hope you're staying home and staying safe