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Rental of Equipment and Late Payment

8 September 2020

We were recently approached by a client that rents out certain equipment on construction sites and was facing difficulties collecting said equipment when other party to the contract failed to pay the monthly rental amount. The reason for this difficulty was that the other party to the contract was not providing him with access to site.

In this regard, our first advice to our client was to include a provision in the contract which obligates the other party to provide access to the site. This creates a contractual entitlement to our client and a contractual obligation on the other party.

In the event that there is a default in paying the rent for the construction equipment, the client is advised to address a letter to the other party reminding it to comply with the terms of the rental agreement and placing it on terms to make payment of the rent within a specific period of time.

Should the other party remain in default of their payment obligations, a second letter should be addressed to the defaulting party stating that the client will be terminating the rental agreement on the basis of the defaulting party’s breach and attending on site on a specific day and at a specific time and that access should be made available

However, should the defaulting party fail to adhere to the obligation to provide access, the client would need to approach the High Court for an application known as the rei vindicatio. This application is used when a person wishes to recover possession of property that belongs to them but such property is in the possession of another person. The Property is in this case, the equipment which has been rented.

In order to succeed with such an application, the following needs to be proved by the person who has instituted the application:

  1. That the applicant is the owner of the equipment that the application relates to;
  2. The equipment must be clearly identifiable and must not have been destroyed or consumed;
  3. The Respondent must be in possession or detention of the equipment at the time that the application is brought and heard.

If the application is successful, a court order will be granted which the applicant may use to attend at site and collect its outstanding equipment.

While going to court may seem costly and daunting, it is always in your best interest to follow the correct legal procedure as you will be then have a legally binding court order to use to recover your property. Another positive in making an application to court is that you may request that the Court order the Respondent to pay the costs of the removal of the equipment from site due to the fact that such costs arose directly as a result of the Respondents failure to comply with the conditions of the rental agreement.

Lastly, once you are in possession of a court order, it may be prudent to have said court order served by Sheriff as well as by email. In your email attaching the court order, you should notify the Respondent of the date on which you will be attending site to collect the equipment and a warning that a failure to comply with the provisions of the order could lead to a contempt of court application.

Author: Tamlynn Avis, Associate