Termination of residential leases must be fair, Court holds

In a ground-breaking judgment, the Constitutional Court today affirmed the rights of tenants to challenge excessive rents and unfair lease terminations. The Court ruled that the Rental Housing Act 50 of 1995 entitles a tenant to challenge the termination of their lease on the basis that it is unfair. The Court was giving judgment in a case brought to it by Yvonne Maphango and fourteen other tenants who faced eviction by Aengus Lifestyle Properties from a building in Braamfontein. Three years ago, Aengus told the tenants to pay between double and triple their rent, or leave their homes. When the tenants refused to accept the rent increases, Aengus terminated their leases. The tenants then complained to the Rental Housing Tribunal. Aengus simply sued them for eviction.

In the High Court and in the SCA, the tenants argued that Aengus' termination of their leases amounted to an unfair practice in terms of the Rental Housing Act. Section 4(5)(c) of the Act empowers a landlord to terminate a tenant's lease "on grounds which do not constitute an unfair practice". Both the High Court and the SCA dismissed the tenants' challenge. The SCA found that the concept of an "unfair practice" did not include conduct on an isolated occasion, and so the termination of a lease could not amount to an unfair practice.

The majority of the Court, in a judgment by Cameron J, held that the Rental Housing Act must be interpreted in light of the Constitution. The right of access to adequate housing "imports an inhibitory duty not to impede or impair access to housing". The right also "ripples out to private rights when the state itself takes measures to fulfil the right. These may affect private relationships". The Court held that the Rental Housing Act is an example of this.

The Act "superimposes its unfair practice regime on the contractual arrangement the individual parties negotiate". This means that "where a tenant lodges a complaint about a termination based on a provision in a lease, the Tribunal has the power to rule that the landlord's action constitutes an unfair practice, even though the termination may be permitted by the lease and the common law". This "subjects lease contracts and the exercise of contractual right to scrutiny for unfairness in light of both parties' rights and interests". The Tribunal has "the power to issue a ruling granting the tenants appropriate relief. That may include a ruling setting aside the landlord's termination of their leases". 

The Court held that the Tribunal may have found that Aengus' conduct amounted to an unfair practice, and that the tenants (or indeed Aengus) must be given the opportunity to pursue their complaint at the Tribunal. The Court accordingly granted leave to appeal, but postponed the appeal in order to allow the tenants to lodge a complaint with the Tribunal by 2 May 2012.

Teboho Mosikili, an attorney for the tenants said: "This is an historic judgment, which subjects the conduct of landlords and tenants to the standards of fairness and equity. Because the landlord-tenant relationship implicates a range of fundamental rights, the Constitution could have demanded nothing less. We will be lodging a complaint with the Tribunal in due course."

The tenants were represented in Court by Advocates Daniel Berger SC, Stuart Wilson and Irene De Vos. The SERI Law Clinic and Mdladlamba Attorneys acted as the tenants' attorneys.

Read more on the case and the papers here.

Statement issued by Teboho Mosikili, Attorney at SERI and Kate Tissington, Researcher at SERI, March 13 2012

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