PIE Act: When good laws help bad people - Vivienne Vermaak

Key topics:PIE Act often exploited by unlawful occupiers, harming landlords financially.Evictions are costly, slow, and civil-only, with no real deterrent for squatters.DA pushes law reforms to criminalize land invasion and protect property rights..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Vivienne Vermaak*.Sometimes a bad law is merely a good law taken too far. The principle of it might be sound and it aims to benefit the right people, but the wrong people take advantage. This might be the case with the PIE Act (Prevention of Illegal Eviction from an Unlawful Occupation). In many cases, the perpetrators of the unlawful occupation have more rights than landowners or at least are savvier in applying the laws in their favour.In South Africa, this has resulted in an interesting domino effect that is shifting rental patterns, home buying, and adding to an already complicated housing problem. Laws that were originally intended to protect the most vulnerable in our communities are now exploited by people with criminal intent. While the noble purpose was to protect farm workers, live-in domestic workers or people with temporary financial vulnerability, these are the exact people who do not have the resources or will to pursue their legal rights, while the squatters (unlawful occupiers) do. Erik Peers, a realtor in Johannesburg’s Northern suburbs, says dealing with evictions is a reality all estate agents face, and that ‘squatters’ often don’t look like you think they look. “They are not the poor and the homeless; they drive luxury vehicles and have resources, bolstered by a sense of entitlement because they feel untouchable, which they technically are, because of how the law is executed in real terms.” Peers recalls a case where a tenant in unlawful occupation of a R10 million property defaulted on rent after having produced fraudulent proof of payment to secure the rental. When the landlord showed up to discuss the situation, the tenant blocked the entrance and called the police, who refused entry to the landlord, instructing her to get a court order. “It becomes an onerous burden on the estate agent and homeowner,” says Peers..Read more:.Worldview: ANC defends SA sovereignty, rejects US criticism over land reform law.According to PIE, illegal occupants or rent defaulters may not be evicted without a court order. If they gain access to your house, whether by unlawful entry or paying a few months’ rent and they decide not to leave, they have possession and a court order is needed to get them out. This could take a year or more. Then, after the order is served, they still have 30 days to vacate the premises. The landlord or owner is also under obligation to find alternative accommodation before the eviction can be finalised. Depending on the complexity of a situation, legal fees for an eviction could cost between R15,000 for an unopposed eviction or R40,000 if there is opposition. If traditional means fail, you can hire companies like Property Recovery, who offer a full service, from start to finish, including upfront mediation, guaranteed eviction orders and expedited and forced removal. Everything is legal, above board and done swiftly. According to their website, most cases are resolved after the first negotiation attempt. While intimidation, violence, and threat of violence is not legally allowed, it is reliably understood that the negotiation team would typically include at least one large individual. If that fails, the owner might be asked to sign a legal lease over to the eviction specialist who simply sends a new team of tenants in to share the house legally. Depending on the mood and creativity of the home-sharing team, a series of territory-marking exercises is often enough to seal the deal. In America, these counter invasions take a hilarious turn as Youtubers livestream their antics, which include playing a recording of 3,5000 Hz (the most irritating sound to a human) at full blast, while banging cutlery on the walls and producing disgusting smells. While the counter measures are entertaining, what is most remarkable about these videos is how the illegal occupier simply stays put, even resorting to calling the police on the homeowner for disturbing their peace. Many squatters sit out their time till the court order arrives, in the meantime sub-letting the rooms to make money. They are career criminals.Peers says the fact that illegal occupation and eviction remain a civil matter, makes it harder to get rid of people. “If it was a criminal act and people faced jail time, it might make a difference. In the meantime, we might not be able to collect rent on that property, as tenants waiting out an eviction order have no incentive to pay.” He says that in the UK, squatting in a residential building is a criminal offense, carrying a sentence of up to 6 months in jail or a fine. “Contrast this with South Africa, where unlawful occupation is primarily handled through strict civil court eviction. The effect of this is that the squatting tenant is not punished by law. There is no disincentive for them not to squat again.”The DA (Democratic Alliance) is building cross-party support for urgent PIE Act reforms, which includes the criminalisation of land invasion incitement and tightening of court rules. The ANC has provisionally shown some support for this as urgent, as departmental reforms can be expected to be made only by 2030. The DA’s push for these law amendments is aimed at criminal syndicates and political opportunists who prey on desperate people. The groups ‘sell’ land they don’t own or make it available as a living space with the promise of services being supplied. They pocket the cash and disappear. Overnight, hundreds of people move on to the land, and the municipality is left to spend billions on emergency services instead of using housing budgets to deliver real housing. If the DA’s Private Member’s Bill succeeds it will strengthen property rights across the board, as it now becomes a criminal matter.In the meantime, individual homeowners have to brace themselves for increased risk and costs associated with renting out a property. Eviction services could cost up to R70,000, but the loss of rental income for a year while you wait for the court case to be settled could be much more. This, in turn, is leading to more people becoming reluctant to rent out properties, leading to the scarcity of affordable housing, as agents and owners now have to work in additional background checks and possible eviction costs into the deals. A huge additional cost is the necessity of security in South Africa, not just for protection against normal crime, but to guard against illegal house occupations, which can take place in a matter of hours. It all adds up..Read more:.When good intentions backfire: From raccoon mobs to policy failures – James Peron.A further inadvertent corollary of PIE is that the Act the law pays special protection to single mothers, children and the disabled as a particularly vulnerable sub-group. Some estate agents are choosing to avoid renting to this category in the first place. “The law ends up hurting the people it is supposed to protect the most,” says Peers. “It is an unintended consequence but one everyone in the housing market, owner tenant and agent is feeling. I now advise investment buyers who intend to rent for income to not only check not only the quality of the electricity and plumbing, but how long it takes a matter to go to court in their area. It has added a whole extra layer of admin and specialist knowledge into my portfolio.”Buying, selling, and letting property is a game of survival in South Africa: outwit, outlast, outplay. Let the buyer beware, but also the unlawful occupier..*Vivienne Vermaak is an award-winning investigative journalist, writer, and public speaker. Vivienne is a Senior Associate of The Free Market Foundation.

PIE Act: When good laws help bad people - Vivienne Vermaak

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