Ruling reaffirms ‘fair’ grounds
SA’S transformative constitution makes a commitment to maintaining a society based on democratic values, social justice and fundamental human rights. SA is, however, also committed to the principles of free market and capitalism.
When it comes to rental housing, a balance has to be struck between the contractual and commercial rights of landlords with the socio-economic rights of tenants, bearing in mind the deep patterns of poverty and inequality which still exist in the country.
In Maphango v Aengus Lifestyle Properties (Pty) Ltd the Constitutional Court was faced with this balancing act. In essence, the court found that the Rental Housing Act, 1999 strikes the required balance by prohibiting unfair rental practices, as determined by the provincial Rental Housing Tribunal.
The court was faced with the question of when a landlord may cancel a lease and evict tenants. A group of tenants, including Maphango, of an apartment block in Johannesburg’s inner city, faced eviction following the termination of their leases by the land- lord which had dones so with the sole purpose of entering new tenancies at substantially higher rentals. The termination notices made no reference to renegotiating of rental amounts.
The tenants lodged a complaint with the Gauteng Rental Housing Tribunal established under the act. This act serves to give effect to the constitutional right of access to adequate housing, which includes the right not to be subjected to unfair rental practices. The complaint was that the purpose of the lease terminations rendered it unfair. The complaint was referred to arbitration before the tribunal.
Before the arbitration could take place, the landlords approached the high court for an eviction order.
The high court granted the eviction order, which was confirmed by the Supreme Court of Appeal. The tenants took the matter on appeal to the Constitutional Court.
The Constitutional Court considered the Gauteng Unfair Practice Regulations, made under the act, which stipulate that all acts must be performed in good faith.
The act prescribes that unfair practice rulings may include a determination regarding the amount of rental payable by a tenant. The question be- fore the court was therefore not whether the landlord was entitled to terminate the lease in order to secure higher rental but whether the termination constituted unfair practice.
The Constitutional Court ruled that the high court ought to have stayed the proceedings before it to enable the tenants to resuscitate their tribunal complaints against the landlord, and to enable the tribunal to determine whether the termination of their leases was an unfair practice. The court found that the applicants were entitled to appeal to the Constitutional Court but that the appeal would be held over to enable the landlord and tenant to bring suitable
The effect of the judgment is not that it prevents landlords from ever terminating lease agreements or evicting tenants
lproceedings before the tribunal to determine whether the termination of the lease constituted an unfair practice.
The effect of the judgment is not that it prevents landlords from ever terminating lease agreements or evicting tenants. There are grounds on which to do so after the appropriate procedure has been followed.
Landlords will have to consider their motive when terminating residential lease agreements; by making sure that their motive is “fair” and that the basis for cancellation is specified in the lease agreement.
An example of a fair motive would be where there has been a material breach of the lease by the tenant.
In the light of the judgment, it is also imperative that landlords do not institute eviction proceedings against tenants until such time as any complaint lodged with the Rental Housing Tribunal that the termination is an unfair practice has been finalised.
This does not mean that the tenant is permitted to continue occupation of the premises free of charge pending proceedings before the tribunal.
Tenants would still be under an obligation to effect payment of the rental amount as contractually stipulated before the cancellation.