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Commercial Premises Rent Regulations 1983 (Statutory Instrument 676 of 1983)

 

Statutory Instrument 676 of 1983.

Commercial Premises Rent Regulations 1983

SIs. 676/1983, 264/2001, 135/2004, 109/2006.

ARRANGEMENT OF SECTIONS

PRELIMINARY

Section

  1. Title and operation.

PART I

BOARDS

  1. Proceedings of boards.
  2. Powers of board to obtain information.
  3. Powers of entry and inspection.

PART II

FAIRRENTS

  1. Procedure on receipt of application.
  2. Consideration of application.
  3. Determination of fair rent.
  4. Variation of determination.
  5. Revocation of determination or variation.
  6. Validity of determination or variation.
  7. Notification of decisions of board.
  8. Report of board’s reasons.
  9. Details of determination or variation.
  10. Notice of determination to subsequent lessor. PART III

PROHIBITED PAYMENTS

  1. Excess rent.
  2. Payment of bonus, premium, et cetera.
  3. Refund of deposits.
  4. Recovery of payments in excess of fair rent or in contravention of section.

PART IV

STATUTORY TENANCIES

  1. Limitation on ejectment.
  2. Rights and duties of statutory tenant.
  3. Illegal removal of property by lessor or obstruction in use of commercial premises.

PART V

APPEALS AGAINSTDECISIONS OF BOARDS

  1. Noting of appeal.
  2. Preparation for appeal.
  3. Powers of Administrative Court.
  4. Rent pending appeal.

PART VI

EVASION OF REGULATIONS

  1. Agreement to evade regulations void.
  2. Threats prohibited.
  3. Evasion of regulations prohibited.

PART VII

OFFENCES

  1. Refund of illegal payments or deposits.

PART VIII

GENERAL

  1. Inspection and taking copies of local authority documents.
  2. The serving of notice by post.

IT is hereby notified that the Minister of Trade and Commerce has, in terms of section 5 of the Commercial Premises (Lease Control) Act, 1983, made the following regulations:—

PRELIMINARY

                                                                                             1.   Title and operation

  • These regulations may be cited as the Commercial Premises (Rent) Regulations, 1983.
  • These regulations shall come into operation on the 1st January, 1984.

                                                                                                  2.   Application

(1) Subject to the provisions of subsection (2), these regulations shall apply only to commercial premises situated within—

  • an area for which a municipal or town council has been established;
  • any part of the area of a rural council which is a designated area in terms of the Rural Councils Act [Chapter 211];
  • an area set aside or deemed to have been set aside as a township in terms of the Communal Land Act, 1982; (d) a local government area as defined in the Urban Councils Act [Chapter 214].
  • These regulations shall not apply to the letting of commercial premises by the State or a municipal, town, rural or district council or a local board.
  • These regulations shall apply whether the lease concerned was entered into before, on or after the date of commencement of the regulations.

                                                                                                3.   Interpretation

(1) In these regulations—

“application” means an application made in terms of section 7;

“appropriate board”, in relation to commercial premises, means the board within whose area of jurisdiction the premises are situated;

‘board” means a commercial and industrial rent board established by the Minister in terms of section 3 of the Act;

“commercial premises” means any premises or part thereof occupied under a lease for the purpose of carrying on therein any industry, business, trade or occupation, and includes any ground, parking-space, garage, outbuilding, workers’ quarters and other improvement let therewith;

“depreciated replacement value”, in relation to commercial premises, means the aggregate of the following— (a)   the current cost of erecting the buildings, structures and improvements, less depreciation; and (b)      the current market-value of the land let as part of the premises:

Provided that, in the case of commercial premises which form part of composite premises, the depreciated replacement value of the commercial premises shall be assessed proportionately;

“lease” means a written or unwritten lease;

“lessee”, in relation to commercial premises, includes any sublessee thereof;

“lessor”, in relation to commercial premises, includes the owner thereof, the person to whom the rent therefor is normally paid, a lessee who has sublet the premises or part thereof and any agent of the lessor;

“open market rental”, in relation to commercial premises, means a rental which is comparable with the rental agreed between a willing lessor and a willing lessee for comparable premises in a comparable location, taking into account any normal anticipated increases in rental during the period of the lease, the date at which such rental was agreed, the period of the lease and all other relevant terms and conditions of the lease;

“recurrent expenditure” means expenditure which is reasonable, regard being had to any or all of the following—

  • the amount expended by the lessor in supplying electric current,, water, fuels sanitary and other services and amenities, and in meeting the cost of rates in respect of the premises;
  • the amount expended by the lessor in meeting insurance premiums in respect of the premises, their equipment, furniture and other contents;
  • the cost to the lessor in respect of maintenance and cleaning of the premises, their equipment, furniture and other contents;
  • the amount of collection charges;
  • the cost to the lessor in respect of the caretaking of the premises, their equipment and contents, and the upkeep of the grounds;
  • any amount expended by the lessor on the provision of furniture and equipment;
  • any other amount expended by the lessor in connexion with the letting of the premises;

“rent”, in relation to commercial premises, includes, in addition to the sums payable periodically by the lessee for use and occupation of the premises, any moneys which the lessee pays to or on behalf of the lessor in respect of the amenities, services, facilities and other things provided therewith by the lessor.

(2) For the purposes of these regulations, the identity of commercial premises shall not be regarded as having changed by reason of any change in the premises or in the amenities, services, facilities and other things provided therewith by the lessor.

PART I

BOARDS

                                                                                           4.   Proceedings of boards

  • The procedure followed by a board shall be as simple and informal as possible and the board shall act in such a manner as it deems best fitted to do substantial justice to the parties.
  • The quorum of a board shall be determined by the Minister by notice in the Gazette.
  • All questions or matters requiring a decision of a board may be decided by a majority vote at any meeting and in the Commercial Premises (Rent) Regulations, 1983 event of an equality of votes, the chairman shall have a castingvote in addition to his deliberative vote.
  • The chairman of a board shall cause to be maintained such records of the proceedings of the board as he considers appropriate, and those records shall be kept and filed at the Ministry of Trade and Commerce.
  • The Minister shall appoint an official in his Ministry to act as secretary to a board.

                                                                               5.   Powers of board to obtain information

  • A board may, by notice given under the hand of its secretary, require any party to an application to produce, within a reasonable time, to be specified in the notice, such information as it considers relevant.
  • A board may, by notice of not less than seven days, given under the hand of its secretary, summon any person—
  • who, in its opinion, may be able to give information which is relevant to an application; or
  • who it suspects or believes to have in his possession any book, document or thing which is relevant to an application; to appear before it at the place and time specified in the notice in order to give such information or produce such book, document or thing.

                                                                                    6.   Powers of entry and inspection

Any member of a board shall be entitled, for the purpose of carrying out his duties, to enter and inspect any commercial premises to which an application relates or which are connected with an application at any reasonable time, after due notice to the lessor and lessee of such premises.

PART II

FAIRRENTS

                                                                                                  7.   Applications

(1) A lessor may apply to the appropriate board for—

  • the determination of a fair rent; or
  • the variation of such a determination; in respect of commercial premises let by him.

(2) A lessee may apply to the appropriate board for—

  • the determination of a fair rent; or
  • the variation of such a determination; in respect of commercial premises hired by him.

(3) An application shall— (a) be in writing and in duplicate;

(b) be submitted to the secretary of the appropriate board; (c) include the following information—

  • the description and situation of the premises concerned; and
  • the name and postal address of the lessor; and
  • the name and postal address of the lessee; and
  • the existing rent; and
  • a copy of the agreement of lease, if any;
  • in the case of an application for the determination of a fair rent, include the following information, in addition to that mentioned in paragraph (c)—
    • the rent which the applicant is requesting the board to fix as the fair rent of the premises concerned;
    • details of the premises concerned and the amenities, services, facilities and other things provided by the lessor;
  • in the case of an application for the variation of a determination of a fair rent, include, in addition to the information mentioned in paragraph (c), details of the determination and the variation thereof requested by the applicant;
  • be accompanied by the written representations of the applicant, in duplicate, in support of his request, and shall state whether or not he wishes to be heard in person or through his legal representative;
  • include such other information as the board may require or the applicant may wish to place before the board; (h) be accompanied by a fee of twenty-five dollars:

Provided that, if the secretary of the board requires more than two copies of the application or the written representations of the applicant, the applicant shall furnish such number of copies as the secretary may direct.

                                                                                 8.   Procedure on receipt of application

Upon receipt of an application, the secretary of a board shall serve written notice thereof on the lessor or lessee, as the case may be, affected thereby, which notice shall—

  • be accompanied by a copy of the application and the representations of the applicant in support thereof; and
  • require the lessor or lessee upon whom it is served to submit, in writing, any representations which he may wish to make as to why the application should not be granted, to the secretary, within a reasonable period, to be specified in such notice, and to state whether or not he wishes to be heard in person or through his legal representative.

                                                                                      9.   Consideration of application

(1) Where a lessor or lessee upon whom a notice is served in terms of section 8 fails to submit written representations within the period allowed, the board concerned shall forthwith—

  • in the case of an application for the determination of a fair rent, fix as a fair rent for the commercial premises concerned the rent requested by the applicant;
  • in the case of an application for the variation of a determination of a fair rent— (i) grant the application, if grounds warranting the variation are disclosed therein; or (ii) dismiss the application if no such grounds are disclosed therein.

(2) Where written representations referred to in paragraph (b) of section 8 have been received within the period allowed, the board shall—

  • if no request for an oral hearing has been made, forthwith consider the application in accordance with the provisions of this Part;
  • if a request for, an oral hearing has been made, consider the application in accordance with the provisions of this Part at a time and place fixed by the chairman of the board and notified by the secretary of the board to the parties concerned:

Provided that, in the case of an application for the variation of a determination of a fair rent, if the board is satisfied that the application fails to disclose any ground warranting a variation it may refuse to consider the application, which shall thereupon be dismissed.

(3) After consideration of an application in terms of subsection (2), the board shall— (a) in the case of an application for the determination of a fair rent, make such determination; (b) in the case of an application for the variation of such a determination—

(i)   grant a variation of the determination; or (ii)          dismiss the application.

10. Determination of fair rent

(1) A board shall fix as the fair rent of commercial premises—

  • a rent which will provide the lessor with a reasonable return on the depreciated replacement value of the premises, after allowing for recurrent expenditure by the lessor in respect of the premises; or
  • the open market rental; whichever is the lower: Provided that—
    • where the rent of the premises has been agreed between the parties, and the board is satisfied that no alteration of the agreement is justified, the board shall fix as the fair rent the rent so agreed;
    • where, in the circumstances of any case it is not possible to have regard to any open market rental, and the board has not acted in terms of proviso (i), the board shall fix the fair rent in terms of paragraph (a).
  • In fixing a fair rent for commercial premises, a board may specify different rents for different periods during the currency of the lease concerned.
  • Where an application relates to commercial premises let by a lessee to a sublessee and the amenities, services, facilities and other things provided therewith by the lessee for the sublessee are materially different from the amenities, services, facilities and other things provided therewith by the lessor for the lessee, the board concerned shall have due regard thereto and, in such circumstances, may, in any determination made by it, specify different fair rents in respect of the premises as let to the lessee and the premises as let to the sublessee.

11. Variation of determination

A board shall not grant an application for the variation of a determination of a fair rent unless—

  • a material or substantial change has occurred, or will occur, in the premises concerned or in the amenities, services, facilities and other things provided therewith; or
  • a material or substantial change has occurred, or will occur, in the recurrent expenditure of the lessor; or
  • the true facts were not placed before the board at the proceedings resulting in such determination and the failure to do so was not attributable to the fault of the applicant for the variation of the determination; or (d) such other circumstances exist as justify such variation.

12. Revocation of determination or variation

Where a board has acted in terms of paragraph (a), or subparagraph (i) of paragraph (b), of subsection (1) of section 9, the party in default may apply to the board, not later than one month after he has obtained knowledge of the board’s decision, for the revocation of the determination or variation, as the case may be, and the board may, on good cause shown and after giving the other party concerned an opportunity to make written representations, grant such application.

13. Validity of determination or variation

  • Subject to the provisions of subsection (2), a board shall specify the date from which the determination of a fair rent made, or the variation of such a determination granted, by it shall have effect which shall not be a date prior to the date on which the application for such determination or variation, as the case may be, was received by the secretary of the board.
  • Where a board determines as a fair rent in respect of commercial premises—
  • a rent which is lower than that payable in respect of those premises on the date of commencement of these regulations, and the application for the determination was received by the secretary of the board within two months of such date, the determination shall have effect from such date;
  • a rent which is higher than that payable in respect of those premises in terms of a subsisting lease, the earliest day from which the determination may have effect shall be the day following that on which such lease expires, whether by the effluxion of time or in consequence of notice duly given by the lessor:

Provided that the provisions of this paragraph shall not apply to the case where the lessee is a statutory tenant in terms of Part IV.

(3) The determination of a fair rent in respect of commercial premises, as varied from time to time in terms of this Part, shall remain in force—

  • where the premises are let on the date on which the determination is made or takes effect, whichever is the later, while the lessee in occupation on that date remains in occupation;
  • where the premises are not let on the date on which the determination is made or takes effect, whichever is the later, while the lessee to whom they are first let thereafter remains in occupation.

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