REALWorld Law

Commercial leases

Financial security

What additional form(s) of security can be provided to a landlord to protect against a failure by the tenant to meet its obligations?

Zimbabwe

Zimbabwe

Parties have freedom to contract in this regard, but it is a typical practice for the landlord to request a deposit in terms of the lease agreement prior to the tenant being permitted to occupy the premises. This is normally the equivalent of one month’s rent. This deposit is normally used to cover the landlord against any damage due to the negligence of the lessee or to set off against any rental due.

In terms of the commercial Premises Lease Control Rent Regulations, a landlord is not permitted to retain a deposit for more than 14 days from the date on which the lessee vacates the premises.

The landlord enjoys protection for the payment of arrear rental by means of the Landlord Hypothec. The Landlord Hypothec allows the landlord to sell the movable goods of the lessee which are on the leased premises, in the event that the tenant fails to pay the rent. Section 34(3) of The Magistrates Court Act [Chapter 7:10] allows the landlord to approach the court for an order to attach the property based on the hypothec, seizing the movables of the lessee which are on the property, as may be sufficient to satisfy the amount of rent due and in arrear, together with the costs of such application and of any action for the rent due and in arrears.