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Debt management for tenants/lessees

<span> <h2 class="sectHeading">Debt management actions</h2></span> <p> Debt management actions are elevated on five levels – known as Dunning Levels (DL) 1 to 5. Debtors who ignore a warning will see the DL escalated to the next level. For example; if you ignore DL 1, the City will take a DL 2 action against you. </p><p>In terms of the City’s <a href="https://resource.capetown.gov.za/documentcentre/Documents/Bylaws%20and%20policies/Credit%20Control%20and%20Debt%20Collection%20Policy.pdf" target="_blank">Credit Control and Debt Collection policy</a> and in conjunction with debt management action already taken, your electricity may be disconnected and/or (in the case of residential properties) your water restricted to trickle feed for non-payment of your rental arrears.</p><p><strong>Read more about the different levels below:</strong></p><p><strong>DL 1: </strong>Blue letter or Important Notice (IMP) – received by the tenant (debtor) at no cost.</p><p> <strong>DL 2</strong>: Letter of Demand (LOD) – sent to the debtor by our third-party attorney through registered mail. The legal cost is charged to the debtor’s rental account. The third-party attorney acts on instructions given by the City.</p><p> <strong>DL 3:</strong> Summons – drafted by the third-party attorney for the debt owed to Court. This is delivered to the debtor by the Sheriff of the Court.</p><p> <strong>DL 4</strong>: Default Judgment – the attorney drafts an application for a Default Judgment which is either be granted or rejected by Court. </p><p><strong>There are additional DM actions between level 4 and 5: </strong></p><ul><li> <strong>Warrant of Execution (WOE)</strong> – a debtor’s movable goods are attached (seized)</li><li> <strong>Emolument Attachment Order (EAO)</strong> – a court order whereby the City can attach part of the debtor’s salary or wages</li><li> <strong>Financial Inquiry </strong>– a procedure to inquire into the financial position of the debtor in which Court will grant a maximum amount payable to the City</li></ul><p> <strong>DL 5:</strong> Eviction – the ultimate action that can be taken. The City obtains an Ejectment Order from Court, and if the tenant fails to leave their leased premises, the Sheriff will forcibly evict them before securing and returning the City’s land/asset.</p> <span> <h2 class="sectHeading">Debt arrangements</h2></span> <p> All debts management actions can be interrupted if the tenant can settle their debt in full or secure a debt arrangement – even if this takes place on eviction day.</p><p>A debt arrangement is a written agreement between the City Manager and a debtor, whereby the debtor can pay off their debt in installments over a maximum period of 24 months at zero percent interest. </p><p>The debtor will remain on their current Dunning Level (DL) until the debt is settled in full. Once the debt is paid off, the DL will be reset to zero. </p> <span> <div class="notification with-heading dark-copy pink bg-light-grey"><div class="graphic with-border"> <i class="info note"></i> </div><div class="desc"><h4>Please note</h4><p>If the debtor doesn’t honour the terms of the debt arrangement, debt management actions will resume from the last DL.</p></div></div></span>

If you are leasing City property, the following debt management actions apply.

Credit Control and Debt Collection Policy

1558125

2023-05-31T10:00:00Z