The Department of Public Works (DPW) and the owners of the properties which are rented out to the department’s clients have established methods that will help ensure that the backlog of expired leases is cleared by the 31st of December 2013.
The two sides met at the DPW’s headquarters in Pretoria on 11 December 2013. The main purpose of the meeting was to inform all landlords that the department was aware of the challenges of the expired lease agreements; indicating the measures that the department would undertake to address these challenges, provide a platform to listen to problems of the landlords, as well as attempt to jointly find solutions.
Speaking during the meeting, the Head of the Department’s Property Management Trading Entity (PMTE) Mr Dhaya Govender mentioned that there were just over 1 500 leases that have expired. He said according to directives given by the National Treasury (NT), the leases that have expired may be extended by way of new written agreement not exceeding a period of three (3) years and with an annual escalation rate not exceeding 5.5%.
When the landlords wanted to know how negotiable the annual escalation rate of 5.5% was, Mr Govender explained that this was not a rate determined by the DPW, but was a National Treasury (NT) directive.
Mr Govender also reiterated a concern raised by the DPW Director-General Mr Mziwonke Dlabantu in a prepared speech that was read on his behalf by the Corporate Services Acting Deputy Director-General, Mr Clive Mtshisa, over exorbitant rates charged by landlords.
Mr Govender said in some instances, the Department had to pay over R200 per square metre, which is way over the limit. He stressed that coming out of this bi-lateral meeting; the department would expect to pay lower rates. Mr Govender said as the department was developing new approaches to conducting its business, cost reduction was going to be a key driver of the business approach.
He said DPW standardised contracts and the declaration of interest, as well as the anti-fraud and corruption forms that landlords are expected to sign, would be shared with the property-owners for their comment.
The landlords welcomed the new standardised lease agreement, saying it would clearly outline as to who does what, with regards to the leased properties. Both the DPW officials and the landlords agreed that they have to engage further and more frequently about the new developments, both at national and provincial levels.
