By Michael Monyebodi, Phukubje Pierce Masithela Attorneys
The Constitutional Court recently delivered a land mark judgment where it upheld the rights of tenants to challenge the termination of unfair lease agreements and excessive rentals.
In its ruling, the Constitutional Court reaffirmed the powers of the Rental Housing Act, 50 of 1995 (“the Act”) and held that tenants are entitled to challenge the termination of their leases on the basis of “unfair practices”.
The Powers of the Rental Housing Tribunal
In the recent judgment of Maphango and Other v Aengus Lifestyle Properties (Pty) Limited CCT 57/11  ZACC 2, the Constitutional Court had to decide on the question of whether the landlord, Aengnus Lifestyle Properties Pty Ltd’s termination of its tenants’ lease agreements in order to increase its rental constituted an unfair practice in terms of section 13(5) of the Rental Housing Act 50 of 1995 and whether the Rental Tribunal has powers in terms of the Act to make such determination.
The facts of the Maphango case briefly were that Ntobizodwa Yvonne Maphango and fourteen other residents (“the Tenants”) of the Lowliebenhof apartment block in Braamfontein challenged the cancellation of their leases by their landlord, Aengus Lifestyle Properties Pty Ltd. The landlord purchased and upgraded the building and subsequently offered each of the Tenants an opportunity to enter into a new lease on the same terms but at much higher rentals.
In its findings, the Constitutional Court overturned the decision of both the South Gauteng High Court and the Supreme Court of Appeal by affirming that although section 4(5)(c) of the Act empowers a landlord to terminate a tenant’s lease, such termination should not “ constitute unfair practice”.
In its majority judgment by Cameron J, the Constitutional Court held that “by terminating the lease, the landlord did not wish to bring the lease to an end, it wished to circumvent the rent escalation clauses, and to avoid compliance with tribunal clauses”. According to the majority judgment, even in those instances where the lease agreement and the common law permits the termination of the lease agreement, the Rental Housing Tribunal is empowered by the Act to make a determination as to whether the termination constitutes unfair practice or not.
Although the Judgment has been viewed as ground-breaking, it should be noted that in an event where a similar dispute arises between tenants and landlord, tenants are advised to lodge their complaints with the Rental Tribunal. Tenants should also bear in mind that the Act is a very complex piece of legislation and launching complaints under it will require a good understanding of the process and as such tenants should seek legal advice and assistance when launching complaints. A detailed complaint should be submitted to the Tribunal and substantiate fully the nature of the dispute and the relief sought.
It is important to note that the Constitutional Court in Maphango’s case postponed the matter and directed the complainants to launch their complaints with the Rental Housing Tribunal before 02 May 2012, in order to allow the Tribunal to make a determination regarding the dispute in question.
MICHAEL MONYEBODI, ASSOCIATE
PHUKUBJE PIERCE MASITHELA ATTORNEYS
13 APRIL 2012