Stay secure when tenants go into business rescue
There are two words that every landlord and property practitioner fears: Business Rescue. The reality is that multiple companies over the past few years have struggled financially. By the third quarter of 2024, CIPC data indicates that 424 South African businesses have liquidated and 178 entered business rescue in an effort to keep the business in operation.
Understanding the impact of business rescue on landlords
It is easy to understand why the consequences of business rescue strikes fear into property investors and practitioners. Once a tenant is placed in business rescue, no further legal proceedings can be instituted against the tenant and the business rescue practitioner can order that any monetary obligations of the tenant (i.e. paying for the rental and utilities) be suspended for the duration of the business rescue period. This leaves landlords with substantial damages that only continue to grow whilst the tenant remains in business rescue, which can take months to finalise.
To help navigate this complex and stressful scenario, the TPN legal team prepared a brief overview of the current position regarding business rescue in South Africa, with a detailed guide to the process behind business rescue proceedings, so that landlords and agents are aware of the exact process and the implications thereof.
Download: A landlord’s guide to business rescue proceedings
Read the article: Business rescue – Some relief for landlords on the horizon
In the most recent update to the Commercial LeasePack, we have added new documents to protect against these losses through a rental guarantee – a form of security that allows landlords to pursue the damages suffered because of the business rescue proceedings of the tenant. This is similar to a deed of suretyship and provides the landlord with a different debt collection route. In essence, the new TPN Rental Guarantee provides alternative methods of collection in the event that a tenant is placed in business rescue.
Protect your property and profits with the right tools
To safeguard your properties and prevent the financial strain that often accompanies business rescue proceedings, it’s crucial to act now. With all the documents and support that comes with the TPN Commercial LeasePack, you’ll now also have access to the newly released rental guarantees, offering you powerful, alternative routes for debt collection.
Empower yourself with the tools to secure your investments and ensure your cash flow remains protected, no matter what challenges your tenants encounter. Learn more about the Commercial LeasePack here.
