According to Sharrock (2007) a hypothec is a type of security which one person acquires over another’s property in the event that the latter becomes indebted to them. In the event the lessee falls into areas with his rental payment, the lessor of the immovable property acquires, a hypothec over movable property belonging to the lessee, which is present on the leased premises.
The lessor perfects his hypothec, meaning he acquires a real right to the property, if he has the property attached, whilst it is on the leased premises. Upon attachment, the lessor obtains a preferent claim to the proceeds of a property over other creditors of the lessee.
The hypothec remains the force until the lessee is able to pay the rental owed. If the rental is not paid, the hypothec remains in force whilst the movable property remains on the leased premises. In the event that the lessee attempts to remove the movables from the leased premises before the lessor has attached such property, in order for the lessor to exercise his hypothec he must attach the movables while they are in transit, before they reach their destination. This simply put means; if a tenant removes the movable property in an attempt to defraud the lessor of his claim. The lessor can still claim the movable property while it is being transferred to its new destination. However once it is on the new premises it is un-claimable.
If a third party claims ownership of movables found on the premises which are let, the onus is on the third party to prove his ownership. Strictly speaking, the third party should let the lessor know that the property belongs to him A sub-lessor’s movables are also subject to the lessors hypothec, but only to the amount of which the sub-lessee owes the lessee rent.
A lessor’s hypothec comes into operation when (and continues for as long as) rent is owing and unless the goods have been attached in terms of a Court Order, the lessor’s hypothec is lost when goods are removed from the hired premises, even by the lessee himself.
The lessor can, however interdict the lessee from removing goods from the premises. The lessor’s hypothec terminated upon payment of the arrear rent by the lessor or any other person. The termination of the lease does not terminate the lessor’s hypothec. It is only terminated on reimbursement of rent owing to the lessor by the lessee.