Judgment reserved in Joburg lease case

2011-11-03 17:35

Johannesburg - The Constitutional Court has reserved judgment in a case involving a group of residents who claim that cancelling their leases and then increasing rent in a building set for renovation violated their rights.

"These tenants have been living there between four, eight and 17 years and have paid rent religiously," said the tenants' lawyer Daniel Berger SC.

"They have accrued a right of access to adequate housing and by cancelling that right, that right is impaired."

Their rights were based on Section 26 of the Constitution that set out access to adequate housing as a right, he submitted.

The Rental Housing Act also stipulated that a landlord could not cancel a lease on grounds that were unfair.

Pursuit of profit

Berger said the pursuit of profit should be balanced against the constitutional rights of the tenants.

At least seven people living in the building Lowliebenhof in Smit Street, Braamfontein, would be homeless if they had to move out, he said.

The court was hearing argument on behalf of Ntombizodwa Maphango and 14 others who are contesting the cancellation of their leases and invoking their constitutional right to have access to adequate housing.

Heidi Barnes, making a submission as a friend of the court for the Inner City Resource Centre, said depriving someone of rights without good reason was tantamount to unfair practice.

The Rental Housing Tribunal should test whether the cancellation of their leases was done in an unfair manner and there was a need to "hardwire" S26 rights into lease agreements.

Eviction

The applicants had originally taken the matter to the tribunal, but were then forced to go to court instead, after the landlord applied to have them evicted.

The South Gauteng High Court and Supreme Court of Appeal held that the landlord was allowed to do this.

The applicants want the Constitutional Court to order that the matter be properly handled at the tribunal.

The building's owners, Aengus Lifestyle Properties, specialise in buying old Johannesburg buildings and converting them into inner city loft apartments - Tribeca and Fashion Lofts among them.

In the case of Lowliebenhof, rental would have been increased to over R4 000 - between and 100 and 150% of what residents were previously paying.

Aengus's advocate Warren Pye said that when the leases were cancelled, the residents were offered new leases with the new rental amounts - which he described as an invitation to conclude a new settlement.

This should not be viewed as unfair, but as a chance to have first right of refusal.

To what extent is a landlord responsible?

The constitutional right to housing was incidentally related to a lease contract and lease agreements had limits, he submitted.

The judges wanted to know to what extent a landlord was responsible for social costs, and whether it was wrong to be motivated by profit when terminating a lease for the purposes of increasing the rental.

They would also have to decide whether constitutional rights supersede contractual rights.

Before the purchase of the building, tenants received a government subsidy but this was terminated several years ago.

Aengus gave the tenants three months notice of lease cancellation and they were offered cheaper alternatives in their property portfolio.

The tenants said the other units were not in a good condition and that they did not want to move out of Braamfontein.

"[We need to] balance the interests of landlords and the interests of tenants," said Deputy Chief Justice Dikgang Moseneke."

- SAPA