How Covid-19 has shattered the lives of self-employed South Africans

Self-employment is a blessing and a curse at the best of times. Because of the Covid-19 coronavirus pandemic, my means of earning a living disappeared overnight.

In South Africa, there are schemes and funds for all manner of businesses that are perhaps not working well, but there is nothing for us: the forgotten sole proprietors, those who seek to make a living outside formal employment. It's tough and will get tougher.

Let me share a vignette of just one hour of my life, the morning after the lockdown announcement.

This anecdote is particular to my sector, real estate, but I am sure that it will strike a chilling chord with many self-employed professionals.

It was 8am exactly on Tuesday March 24 when my phone lit up.

"Hello."

"Hi, this is Jason, how are you?" the standard South African greeting.

"Well thanks," I answered.

"We can't move in on Saturday."

"But why?"

"It's against the law."

The reality of lockdown slapped me in the face.

"Of course. You can move in before Friday, I will OK it with the landlord."

"No, the removals company is booked up."

My stomach knotted. I had other tenants scheduled to move into Jason's flat when he moved into out. He needed to move out, and in to the next one. I could hear the dominos falling in rapid succession. The phone beeped in my ear, call holding.

"I'll get back to you."

"Hello, Erik speaking."

"Hi, it's Danny, how are you?"

"Fine," I answered without conviction.

"Our Chinese director has been refused entry into South Africa. We are cancelling the new lease."

A quick cash flow calculation. I still had a property sale transferring in one week. I’ll be fine. Another sale only needed a rates clearance certificate issued by the local council to be finalised. Right on cue, an email from the transferring attorneys caused my phone to ping!

"No new rates clearance certificates will be issued by the council. The Deeds Office is also closed until further notice."

No properties could be registered in the names of new owners. This meant no commission paid either. Cash flow now became zero for March and April. What had been on track to be the best first quarter in my career had now become my worst.

I turned my attention to the sale of a large development property. My biggest deal ever. One that I had closed just the weekend before. My telepathic phone lit up again.

"Hi, it's Priscilla, how are you?"

"Great," I said, psyching myself up positively.

"The council will delay the rezoning of the land because of the lockdown so we are cancelling the purchase. The holding cost of such a large property will be too much for us. The interest payable is a lot. Because of the delay we are stopping development," she said.

I responded: "But it's an irrevocable contract, you can't cancel."

"Force majeure – an unforeseen circumstance that no party to the agreement can change," she said. "No one saw this coming."

The phone lit up again. It was Marvin, a personal trainer. "Hi, it's Marvin, how are you?"

"Great, simply great."

"They have closed the gym. I can’t pay rent. The owner must use my deposit."

The dominos were clattering.

"The Rental Housing Act expressly forbids this. It is unlawful to use the deposit to pay rent. We will have to make another plan."

"Whatever man." Click!

An email drops from a specialist rental attorney I keep on retainer. "No evictions are allowed. Nor will the sheriff be serving summonses for debt."

"Hello it's Colin." He is my ultra-reliable building contractor.

"How are you?"

"Simply splendid," I say.

"I can't finish sanding the floor of the apartment in Parkwood you have for rent. The complex security people say it is not an essential service."

After the lockdown is lifted, completing the work will take another week. The apartment will stand empty while the owner will still have to pay rates and the levy. She bought the apartment with her pension payout lump sum as an investment. She needed the rental income to survive. Now she is not only short of an income, she will be making a loss.

"Hi, it's Maurice." An even older man who sold his flat so that he could move into an old age home. He was hijacked and needed to feel more secure.

"The old age home is under lockdown. We can't move in," he says.

This meant he couldn’t move out, and the new owner couldn’t move in. The dominos kept falling. At least he didn’t ask me how I was.

Estate agents, like Schrödinger's cat, are and aren't employees simultaneously. The SA Revenue Service regards them as employees, so pay as you earn tax is deducted from their earnings. However, the unemployment insurance may not be deducted as agents are independent contractors – that is sole traders. Consequently, they do not qualify for unemployment benefits.

There had to be some good news. I dialled into a webinar with the number one estate agent in New York. Ever positive, he exclaimed: "Hey guys. After being locked down in a one bed apartment for 35 days, the prospect will be itching to upgrade to a bigger property. Be ready to sell!"

Boredom was going to be the least of my problems during the lockdown.