You have an investment property that you decide to rent out. After all, what better way to acquire an asset than to have someone else pay for it? But landlords, take heed: It takes just one tenant getting involved in illegal activities to result in your investment property being forfeited to the State!

Consider this court case: a landlord leased his farm to tenants, then went about his life oblivious to the fact that his tenants were using the property in order to manufacture illegal drugs. In terms of the Prevention of Organised Crime Act, the farm was declared forfeited to the State, given that it was being put to illegal use. And this despite the fact that the owner was not in any way party to or aware of the illegal operations that were being conducted on his property.

In this case, the court sends a clear message to landlords: owners of properties are expected to take an active role in guarding their property against being used to criminal intent. The mere fact that the owner was not aware of the tenant’s activities was insufficient: the law requires that a landlord is vigilant and actively guards against the risk of his property being used for illegal activities.

It is important for landowners to ensure that they have signed an Agreement of Lease with their tenants. These Lease Agreements should specify what the property may be used for, and allow the landlord to inspect the property from time to time.

The mere right to inspect is in itself insufficient. Landlords should actively enforce this right, and keep a careful eye on what their tenants are up to.

 

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.

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