Disputes between landlords and tenants: a tale of a building in Braamfontein, Johannesburg - 02 May 2012
The relationship between landlord and tenant is often a difficult one, compounded often by the fact that many lease agreements – particularly in the context of residential schemes – are not written down on paper. But even where agreements are written down, the relationship is still fraught with difficulties. As a recent Constitutional Court decision has shown, both landlords and tenants need to be aware of the legislative provisions governing lease agreements, as well as need to be aware that a lease agreement is not as straightforward as any other agreement, primarily because lease agreements facilitate the livelihoods of individuals.
The case of Maphango & Others v Aengus Lifestyle Properties dealt with a rental dispute between various tenants of a residential building in Braamfontein, and its landlord, Aengus Lifestyle Properties. The landlord had recently effected improvements to the building, and as a result thereof, sought to increase the amount of rental payable by its tenants. In order, however, to effectively force the tenants to accept the higher rentals, the landlord utilised its powers to terminate the lease agreement, and offered the tenant a new lease agreement but with a substantially increased rental payable.
The question in the case turned on whether the landlord could use the power of termination as a way of coaxing the tenant into accepting a higher rental. On the one hand, one could argue that an agreement is simply that – an agreement. The agreement provided that the lease would renew automatically unless either party terminated the agreement by written notice. There was accordingly no dispute that the landlord was entitled to exercise its power to terminate the agreement in writing, and indeed the landlord thought its actions justified in simply complying with the agreement.
On the other hand, however, the termination was in effect used as a stick to coax the tenant into paying a higher rental. This, the court found, did not show due regard to the provisions of the Rental Housing Act, specifically because the Act prohibits the termination of a lease by a landlord on the ground of an unfair practice. Such practice includes oppressive or unreasonable conduct exercised by the landlord towards the tenant, or conduct which unreasonably interferes with or limits the rights of the tenant. In addition, each party has an obligation of good faith towards each another.
Whether the practice was unfair or not lay within the power of the Rental Housing Tribunal, established in terms of the Act to enact a “complex, nuanced and potentially powerful system for managing disputes between landlords and tenants.” Such a system would provide a balanced determination of the dispute, taking into account both the actual lived circumstances of the tenant, as well as the prevailing market forces facing the landlord which may have necessitated a rental increase.
Despite the tenant referring the dispute to the Tribunal, the landlord sought eviction proceedings against the tenants. The court found that this did not demonstrate an appreciation for the provisions of the Rental Housing Act, and in light of the extensive powers afforded to the Tribunal in resolving a dispute of this nature, refrained from making a ruling on the fairness of the landlord’s termination. Instead, the dispute was essentially referred back to the Tribunal for determination.
The lesson of this case is a valuable one for landlords and tenants alike. Bodies, such as the Rental Housing Tribunal, are often set up to deal with matters of this sought, but perhaps due to a lack of communication are not well-known to members of the public, and certainly not well-known to the everyday person on the street who, firstly, may not have a written contract, secondly, may not be aware of his/her rights in terms of the Act or the Constitution, and thirdly, may not have the resources to approach a legal practitioner able to advise accordingly.
This is disappointing, as the Tribunal is empowered by statute to effect a mediatory and fairly cost-effective role for lease disputes, and to make a determination that would be just and equitable to both landlord and tenant. This doesn’t mean that the relationship between landlord and tenant may be any easier – but it does mean that the resolution of any dispute could be solved that much quicker than engaging upon a protracted legal route.