Government buildings, servicing 6 departments shut due to rental disputes

The Department of Public Works wants to apply for legal action against the landlord of 17 buildings servicing 6 departments that were forced to shut their doors on Friday.

Those departments are finance, police, water and sanitation, higher education, justice and defence.

The Department of Public Works and Infrastructure’s (DPWI) acting DG, Imtiaz Fazel, claimed that the closure of buildings in the Pretoria CBD by the landlord of the buildings was “illegal”.

The DPWI is responsible for providing accommodation to multiple state departments and entities from several landlords.

Fazel said the DPWI had decided not to pay rent and “went ahead with not paying rent” as per a notice given to the landlords.

“It is important to note that the closing of the buildings is illegal as no court order has been granted to evict the client departments or close the buildings,” said Fazel.

He said the illegal actions were an attempt to deflect from the evidence of overpayments that the DPWI had presented to multiple landlords and was in the process of resolving.

The issues of overpaying follow the DPWI in 2019 engaging in a process to review and clean up leasing portfolio through:

– Reviewing the price per square metre we have been paying;

– Investigating the invoices we have received;

– Assessing the value and condition of the buildings we have been leasing;

– Reviewing the costs of our month-on-month leases and;

– Scrutinising our historical and long term leases.

The president has also signed a proclamation enabling the SIU to probe leases that the DPWI had with landlords.

“These multiple processes have uncovered several issues that the department is undertaking in remedying. Chief among these has been correcting situations where landlords have been overpaid,” said Fazel.

Fazel said in several cases, the prices per square metre had been inflated well above market rates, while duplicate invoices were submitted for the same work.

“These findings led to a benchmarking exercise of rental rates across the country, with the specific focus on Tshwane. The benchmarking exercise confirmed that, in many cases, the DPWI was being charged well above market rates by some landlords.”

He said the DPWI used this evidence to negotiate lower rentals in line with the current industry standards.

“In December 2021 the DPWI reached an agreement on new pricing with most landlords and new lease agreements were signed.

“We have been meeting with landlords who are disputing the DPWI payment records and gave notice to these landlords that we would stop paying rent going forward, using the advance (historical overpayment) that is already with the companies to correct the overpayments.”

Fazel said DPWI clients were also made aware of these developments.

“Whilst most landlords are working with the DPWI in good faith to correct these problems, one landlord in Tshwane engaged in unethical conduct through the illegal action of shutting the buildings housing several government departments and institutions.”

He said the DPWI was resolving the matter speedily, to find a long-term solution to correct the issue of landlords charging the state inflated rental costs.

Fazel said the department tried to engage the landlord, however, when no agreement was reached, “we went ahead with not paying rent as per the notice given to the landlords”.

Fazel said this led to the landlord closing their buildings.

He said negotiations were ongoing with a commitment from the consultant to unlocking the buildings.

“The DPWI remains committed to negotiating in good faith so that our client departments are not inconvenienced further.

“We have offered the landlord several incentives to bring them to the negotiating table and reassure our client departments and the country that DPWI is committed to resolving the matter speedily, cost-effectively and to find a long-term solution to the issue of inflated rental costs.”

Police spokesperson, Colonel Athlenda Mathe said SAPS management had confirmed that the criminal records centre headquarters situated in Pretoria CBD was fully operational on Monday.

Mathe said the administering of criminal records, issuing of police clearance certificates as well as the processing of fingerprint applications for firearms had commenced normal operations.

Mathe said the public were now able to drop off and collect their documents at the building.

“The SAPS acknowledges the inconvenience caused by the closure of the building since last week Tuesday, and takes this opportunity to thank members of the public for their patience and understanding,” she said about the Bothongo West Plaza which housed the criminal records centre and crime scene management component which was shut last week.

She said the SAPS was not in any rental payment arrears.

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