Minister of Trade, Industry and Competition Ebrahim Patel published regulations on March 24 (Government Gazette No 43134) outlining details of a block exemption shielding certain agreements or practices between designated retail tenants and retail property landlords from the application of Sections 4 and 5 of the Competition Act.
The purpose of the exemption is to strengthen the government programmes designed to fight Covid-19 under the National State of Disaster declared on March 15 and to “alleviate, contain and minimise” the economic and social effects of the disaster on the retail property sector and designated retail tenants, including small independent retailers.
The designated trading lines for the purpose of the identification of designated retail tenants are clothing, footwear and home textile retailers; personal care services; and restaurants.
The regulations are intended to ensure that the participants in this sector are in a position to continue normal operations beyond the national disaster.
Category of agreements or practices exempted
With the sole purpose of responding to the Covid-19 pandemic and ensuring the survival of tenants of retail properties during this time, the following agreements or practices are exempt:
- Payment holidays and/or rental discounts for tenants
- Limitations on the eviction of tenants
- The suspension of or adjustment to lease agreement clauses that restrict the designated retail tenants from undertaking reasonable measures required to protect their viability during the national disaster.
To qualify for an exemption, these agreements must extend to all South African retail tenants in the designated retail lines, including small independent retailers, unless otherwise authorised by the minister or the Competition Commission.
These regulations may be expanded or reduced by the minister by notice published in the Government Gazette.
Where retail property landlords and retail tenants identify additional agreements or practices not included in these regulations, the minister can be requested to expand the scope of the exemption.
The retail property landlords and designated retail tenants who participate in any agreements or practices falling within the scope of these exemptions must keep minutes of meetings held and written records of such agreements or practices.
Written representations on these regulations may be made by any person, and must be submitted to email@example.com, within 14 days from March 24.
These regulations shall remain in operation for as long as the period of the State of National Disaster subsists, or until withdrawn by the minister, whichever comes earlier.
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