Gideon Pretorius founded Gideon Pretorius Inc. 21 years ago and has since become the go-to expert in property law, specifically with regard to retail and commercial properties.
It was our privilege to ask him 5 Questions.
When making your choice of specialisation, what was it about the property industry which appealed to you and how has the industry changed since when you started out?
When I started my own practice in 1996, I was fortunate enough to be appointed by some of the managing agents and major pension funds who managed and owned retail properties.
I attended property management meetings obtaining insight in the expectations of owners, which I then combined with legal solutions.
I found the fast pace, dynamics and complexities within the industry intriguing.
The effect of the economy on the legal approach, i.e. in growth spurts landlords had a more robust approach whereas in times of financial pressure, settlements were more prevalent.
I have always enjoyed the bird’s eye view across the industry, as I deal with a wide variety of regional and other retail centres and have seen different trends developing across the board.
More role players were introduced during the industry boom, some of them less conservative which made for an innovative approach to matters.
Over the years, the agreements of lease have not only grown in inches, but have also become a lot more detailed and comprehensive.
The introduction of the Consumer Protection Act, as well as the recent application of the Ubuntu principle (general fairness) to the industry will continue to drive a more equitable approach towards tenants, not mentioning “Business Rescue” and its effect.
The balance sheet of a property is only as good as its collected rentals.
Advising landlords, what are the core principles to mitigate risk in terms of arrears and bad debt?
There is a correlation between the collectability of arrears, the size thereof and the period it remains unpaid.
Rental arrears require swift and decisive action. Notwithstanding the use of technology, eg. bulk sms, adverse reporting at credit bureaus and fast legal handover with detailed monthly reporting, I believe that, in the retail industry, the future lies in the taking of informed decisions by the landlord.
Many times landlords are caught off guard with tenants failing or going into business rescue, where the financial risk posed by the tenant has not been adequately managed.
Compare this to the approach banks follow with credit facilities, where financial statements are analysed and consulted upon.
A tenant may be granted a 5 year lease worth R5m without any initial or annual analysis of its financial position or that of sureties.
In order to be effective in the future, I suggest property/asset managers to have detailed knowledge of the nature and trends of the tenant’s business other than just turnover reporting. This will enable the landlord to give effective instructions to attorneys and also partake in the consideration of any business rescue plan with much more insight.
In 2015, you brought a few experts together, being Judge Willem van der Merwe, Prof Chris Cloete, Advocates Chris Erasmus SC and Ben Ritgard and formed The Tribunal for Commercial Property.
What is the purpose of this tribunal and why is it relevant for this specific industry?
The industry requires swift resolution of disputes for various reasons. The relationship between the landlord and the tenant is often destroyed in an open court process.
Over the past 25 years, I lived through an increased frustration as to the ineffectiveness of the civil court process to meet the needs of landlords and tenants alike.
The benefits of a specialised tribunal, where leases have standard terms as an alternative to the court and other general tribunals was not difficult to comprehend.
Armed with 28 practicing counsel spread over South Africa and trained at the University of Pretoria in commercial lease arbitration, comprehensive rules aiming to have a 3 month turnaround, all under the watchful supervision of retired Judge Van der Merwe (or his successor), are very exciting.
Matters are also dealt with in “reverse” requiring detailed consultations before instituting a claim instead of doing so before a trial a year or two later where memories have faded, documents lost and witnesses no longer employed or available.
The primary complaints against arbitrations are that they take as long as court cases and cost more, but these factors have been addressed by the Tribunal and I am very excited about the recent increase in referrals.
You have built not only a very successful firm, but also a strong legacy in terms of your proven excellence and expertise in the field of property litigation.
What are the secrets of your success and what advice do you have for young people considering a career in law and to candidate attorneys who are yet to decide their field of expertise?
Secrets of my success? Relationships, relationships and relationships.
Over and above, without giving away all my secrets, passion, loyalty, ownership, innovation and reliability and last but not least, never to lose your sense of humour.
As candidate attorney, there was a slogan above the photocopier (where I spent most of my time) that read “Our clients are not here because of us but we are here because of them”.
Combining industry experience over many years and having fulfilled numerous roles in the property industry, as property manager, ad-hoc developer and lecturer, the tools available to me as a lawyer was calibrated to achieve the required results.
Young people should pursue their interests and passion as a key element of making a decision and not only focus on monetary return and instant gratification.
A word of wisdom is to slow down: it’s no use winning the race with no memories of the journey.
Law and litigation is heavy weight career choice.
How do you achieve balance and what are your core coping mechanisms and sanity checks in this extremely cut-throat industry?
In achieving balance, it was when I started hearing my wife and daughters and realised that they did not want all the things I brought home, but rather me at home.
My coping mechanisms are my relationships with my partners and employees, knowing that we can count on each other in an office environment with no politics. No self inflicted urgency in dealing with matters, being prepared for cases and focusing on the weak points, as the good ones will look after themselves.
Sanity check: the moment when I don’t have fun anymore or lose my sense of humour!
Copyright © 2017 by Natalie du Preez.
This interview was conceptualised, conducted and authored by Natalie du Preez and is original content, which is property of the author, all rights reserved. This article or any portion thereof may not be copied, shared or reproduced or used in any manner whatsoever without the express written permission of the owner.