Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd

Fifteen tenants occupied flats in Lowliebenhof, a residential building in Braamfontein, Johannesburg, under various lease agreements (Ithemba, Union, Eagle Creek, and Artisan agreements) concluded between 1994 and 2007. The leases contained escalation clauses limiting annual rent increases (10-15% or amounts tied to specific cost increases). Twelve leases contained "Tribunal clauses" requiring the landlord to seek approval from the Gauteng Rental Housing Tribunal for rent increases exceeding the escalation clause limits. Ten leases contained "succession clauses" allowing spouses and dependants to continue occupation. In 2008, Aengus Lifestyle Properties purchased the building. In October 2008, Aengus notified tenants it would terminate existing leases and offer new leases at restructured rates that at least doubled the rent. Applicants could not afford the increases (e.g., from R1,300 to R3,400 per month for the first applicant earning R5,000 monthly). Aengus did not approach the Rental Housing Tribunal for approval. Seven applicants faced homelessness; others would suffer significant reduction in living standards. Aengus sought eviction. The High Court granted the eviction order, declaring the leases validly terminated. The SCA dismissed the applicants' appeal.

• Whether the lease agreements contained a tacit term prohibiting termination of leases solely to impose rent increases exceeding the escalation clause limits
• Whether enforcement of the termination clauses to evict tenants constituted an unfair and unreasonable infringement of the tenants' section 26(1) constitutional right of access to adequate housing and was therefore contrary to public policy
• Whether the termination of leases in these circumstances constituted an 'unfair practice' under section 4(5)(c) of the Rental Housing Act 50 of 1999 and Regulation 14(1)(f) of the Gauteng Unfair Practices Regulations
• Whether a lessee's section 26(1) right to security of tenure can be infringed by lawful termination of a lease in accordance with its terms
• The proper interpretation and application of 'Tribunal clauses' requiring landlord approval from the Rental Housing Tribunal for rent increases
• Whether section 36 of the Constitution (limitations clause) applies to constitutional challenges to enforcement of contractual terms

The SCA dismissed the appeal against the High Court's order declaring all leases validly terminated and ordering eviction of nine applicants. The eviction applications for seven applicants were postponed pending joinder of the City of Johannesburg and a report on alternative accommodation. The applicants sought leave to appeal to the Constitutional Court.

The binding legal principles established are: (1) A tacit term cannot be implied in a lease agreement to prohibit a landlord from exercising an express termination clause, even where the motive is to impose rent increases exceeding contractually agreed escalation limits, because parties cannot be presumed to have agreed to give lessees indefinite occupation rights. (2) The termination of a residential lease in accordance with its express terms does not infringe a tenant's section 26(1) constitutional right to security of tenure, because a lessee's security of tenure is inherently circumscribed by the lease agreement itself and never endures beyond the notice period. (3) The termination of a lease agreement does not constitute a "practice" for purposes of section 4(5)(c) of the Rental Housing Act 50 of 1999, as that provision contemplates incessant and systematic conduct rather than an isolated act of termination. (4) A landlord's motive for exercising a contractual termination right (including to increase rent beyond agreed limits) is generally irrelevant to the lawfulness of the termination, absent abuse of rights.

The SCA made observations that: (1) Even if the respondent landlord was making a loss on the property (which the applicants disputed), this would justify terminating leases to make the business commercially viable. (2) The landlord had renovated the building for the benefit of tenants. (3) Maintaining the applicants' leases at agreed rentals would force the landlord's inner city business venture to run at a loss. (4) Section 36 of the Constitution may be relevant to constitutional challenges to enforcement of contractual terms, requiring analysis of whether rights can "in principle be limited" and whether the limitation is "fair and reasonable in the circumstances" - though this appears to conflict with Barkhuizen v Napier which held the limitations clause plays no role in such challenges. (5) Leases of indefinite duration are recognized in South African law. (6) The distinction between lessees and bondholders is that an owner's right to possession is of indefinite duration, whereas a lessee's is not. These observations were not essential to the decision and reflect the Court's reasoning on factual and policy considerations.

This case is significant because it addresses the intersection of contract law, constitutional housing rights, and statutory tenant protections in South Africa. It determines the extent to which landlords can exercise contractual termination rights to circumvent rent control provisions and the constitutional right of access to adequate housing under section 26(1). The case has far-reaching implications for the landlord-tenant relationship and whether termination of residential leases is subject to constitutional and statutory control. The SCA's decision significantly narrowed the circumstances in which tenants can challenge terminations as unreasonable or oppressive, potentially allowing landlords to avoid compliance with the Rental Housing Act and constitutional standards by simply terminating leases on notice. The case also addresses whether security of tenure (recognized as a component of section 26(1) in Jaftha v Schoeman) applies to leasehold interests and can limit a landlord's contractual termination rights.