Cape Argus - March 2004

GRAHAM NORRIS
Property Editor

Unfair: draconian conditions for blacks

A CAPE TOWN commercial property agent has lashed out at partisan landlords who "refuse to participate in the spirit of the new South Africa" by demanding often "draconian" conditions from black tenant applicants.

Alyce Collins, managing director of Collins Commercial Properties, says the company's leasing brokers were often faced with embarrassing demands from landlords once landlords perceived that the new potential tenant was not white.

"Our brokers in their enthusiasm to conclude a transaction and assuming that they are now transacting business in a more enlightened South Africa, are regularly set back in their negotiations when a landlord, on discovering that the potential tenant is black, suddenly demands double deposits or more onerous conditions to be included in the standard lease document."

There was also a suspicion, Collins said, that landlords were also less attentive to the demands of their black tenants.

"For instance, one of our new black restaurant tenants who suffered severe flooding damage through a fault in the building, has battled for an inordinate period to get the landlord to repair the problem and replace damaged furnishings, including a ruined expensive carpet.

"Because a tenant is black, landlords automatically believe their premises will be subject to abuse, they won't be able to collect their rents or other tenants will suffer a loss of business. Ironically these are the self same difficulties they find with white tenants as well who are poor traders but the perception is that black tenants create problems automatically, just because they are black.

"The real truth is that when it comes to serious business operators, our experience is that black tenants as an economic group are generally better tenants than their white counterparts and are generally the first to pay the rent. For instance, compared with white-owned restaurants who go under, it is rare for a black restaurant to go insolvent."

Collins refused to concede that white tenants were more desirable than black tenants whatever parameters were selected in judging a potential trader's fitness as a tenant. She said that even when her company represented black tenants with "impeccable references and trading records", most landlords were reluctant to do business.

"Virtually all Cape Town landlords employ a far stricter scrutiny and lease conditions over black tenants than they do for white. How else can you explain the phenomenon that there very few, if any, black traders in our larger commercial shopping nodes.

"The exception is downtown Cape Town where private black business has been the catalyst which has been largely responsible for keeping the central business district alive commercially, including the large white chains. If landlords applied the same norms to white tenants as they do to black they would have fewer failures all round."