This week, the Property Poser experts deal with a rental query from a rather unusual source – an electrical contractor who was hired to do work at a restaurant.
The restaurant in question is in a leased portion of a larger building and the restaurant owner, who is merely a tenant, indicated that the owner of the building would make payment for the work done.
The reader says he then contacted the landlord who confirmed that he would be responsible for the payment but that he first wanted to speak to the tenant.
The contractor duly carried out the work. It seems that some time passed but payment was not forthcoming from either the tenant or landlord.
Unfortunately, the reader did not have a formal contract or anything in writing stating that he was contracted to perform the work.
The building owner is now not interested in making payment, particularly as he is in a similar position since the restaurant owner left during his lease. His stance is that, as he did not appoint the electrical contractor in the first place, he should not be responsible for payment.
The reader now asks where his remedy lies – against the former restaurant owner or the building owner or both.
It would appear that the amount due is quite low as he has asked whether the matter could merely be referred to the small claims court for adjudication, says Sean Radue of Radue Attorneys in Port Elizabeth.
“On the given facts, it seems that there was some indication by the building owner that he would be responsible for our reader’s payment.”
This was, however, subject to the caveat that he wished to discuss the matter with his tenant first, says Radue.
“There was possibly no resolution between them as to liability for and division of the costs. This is possibly why the owner never came back to the reader with a formal undertaking of payment.”
Radue says the liability for payment may well be addressed in the lease agreement but the reader is not a party to that agreement and is thus not bound to its terms.
“On the face of it, our reader conducted the work without being clear as to which party was ultimately responsible for his payment.”
According to Radue, the restaurant owner benefitted from the work being carried out, at the contractor’s expense, therefore the reader may have a claim of unjustifiable enrichment against him.
“Practically speaking, however, the fact that the restaurant has closed down may mean that the remedy is valid but not worth pursuing.”
Even if he managed to contact the restaurant owner, the business could be in liquidation, in which case the reader would merely submit a claim and join the queue of creditors, says Radue.
“The building owner could be a party to a legal process but it seems unlikely that any claim would be successful.”
But, says Radue, if the works carried out ultimately benefitted the building owner, unjustifiable enrichment could again be considered as the basis of a claim.
“As far as the question of the small claims court is concerned, this avenue is only available to ‘natural persons’, not businesses or other juristic entities.”
In addition, the small claims court has a monetary jurisdictional limit of R12 000, says Radue.
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