Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd

Fifteen tenants occupied flats in Lowliebenhof, a building in Braamfontein, Johannesburg, under various leases with different predecessors in title. The respondent landlord purchased the building and, following upgrades, sought to increase rents substantially beyond the prescribed annual escalations in the leases (from 10-15% annual increases to increases exceeding 100-150%). Finding itself unable to unilaterally increase rents under the lease terms, the landlord cancelled the leases using termination clauses (requiring one to two months' notice) and offered new leases at much higher rents. The tenants resisted. In September 2008, tenants lodged a complaint with the Gauteng Rental Housing Tribunal alleging intimidation, threats of eviction, and unfair rental charges. Mediation was unsuccessful and arbitration was scheduled for 19 June 2009. However, before that date, the landlord instituted eviction proceedings first in the Magistrates' Court (withdrawn) then in the High Court (29 May 2009). The tenants then withdrew their Tribunal complaint to "concentrate" on the High Court proceedings. The High Court and Supreme Court of Appeal both found the leases validly terminated and granted eviction orders.

• Whether a landlord may validly cancel a lease solely to impose rent increases beyond those permitted by the lease terms
• Whether termination of a lease to circumvent rent escalation clauses constitutes an 'unfair practice' under the Rental Housing Act 50 of 1999
• Whether the Rental Housing Tribunal has jurisdiction to determine the validity of lease terminations
• Whether section 4(5)(c) of the Rental Housing Act precludes termination that constitutes an unfair practice
• Whether the termination of the leases infringed the tenants' constitutional right of access to adequate housing under section 26 of the Constitution
• Whether the leases contained a tacit term precluding termination for the purpose of circumventing rent escalation clauses
• Whether the termination was contrary to public policy
• Whether the appropriate remedy is to refer the matter to the Rental Housing Tribunal

Leave to appeal granted by majority (7-3). Appeal postponed. Parties granted until 2 May 2012 to lodge complaints with the Gauteng Rental Housing Tribunal. If a complaint is lodged, parties may apply for further directions within 15 court days of the Tribunal's ruling. If no complaint is lodged by the deadline, the appeal is dismissed with costs. Dissenting judgment (Zondo AJ, Mogoeng CJ, Jafta J) would have dismissed the appeal with no costs order.

A landlord's right to terminate a lease, even where provided for in the lease agreement, is subject to the unfair practice provisions of the Rental Housing Act 50 of 1999. Section 4(5)(c) of the Act requires that termination grounds must both (1) be specified in the lease AND (2) not constitute an unfair practice. The term "and" is conjunctive, meaning both requirements must be satisfied. An "unfair practice" under the Act may consist of a single act (not only systematic conduct) and includes practices that unreasonably prejudice the rights or interests of tenants or landlords. The determination of whether a termination constitutes an unfair practice falls within the primary jurisdiction of the Rental Housing Tribunal established under the Act. The Tribunal must make determinations that are just and equitable to both landlord and tenant, taking into account prevailing economic conditions, the need for realistic investment returns, and policy frameworks. A court hearing an eviction application under section 26(3) of the Constitution must consider "all relevant circumstances," which includes whether it is appropriate for the Rental Housing Tribunal to first determine whether a lease termination constitutes an unfair practice.

Cameron J made several observations: (1) The history of rent control legislation demonstrates Parliament's longstanding concern with protecting economically weaker tenants while more recently seeking to balance this with landlords' investment interests. (2) The RHA was enacted specifically to give effect to the section 26 constitutional right of access to adequate housing. (3) The Act abolished rigid rent control but replaced it with a more nuanced, flexible system. (4) The statutory framework is "acutely sensitive to the need to balance the social cost of managing and expanding rental housing stock without imposing it solely on landlords." (5) Landlords retain rights to seek rent increases through the Tribunal, which must consider realistic investment returns. (6) If a Tribunal determines termination was an unfair practice, this would be highly relevant to any subsequent eviction application. (7) The development of the common law public policy defense under Barkhuizen was left for another day, given the direct application of the RHA. Zondo AJ's dissent observed: (1) The determination of whether conduct is "unfair" is not a pure question of law but involves passing a value judgment on facts—the rule allowing new legal points on appeal does not apply. (2) In labour law (from which the "unfair practice" concept derives), courts have consistently held that fairness determinations involve moral judgments, not legal determinations. (3) Pleadings serve a vital fairness function that should not be relegated to insignificance. (4) By analogy to labour law, just as employers may terminate employment contracts to effect changes employees won't accept (following proper process), landlords should be able to terminate leases where tenants won't accept proposed rent increases. Froneman J (concurring with Cameron J) observed: (1) Under the Constitution, interpretation of legislation always involves value judgments infused with moral values. (2) Courts have a constitutional responsibility to consider applicable legislation even if not properly pleaded. (3) The rigid pre-constitutional distinctions between questions of law, fact, and value judgment must be reassessed in light of the Constitution.

This case significantly develops South African housing and landlord-tenant law by clarifying the scope and operation of the Rental Housing Act 50 of 1999. It establishes that: (1) The constitutional right of access to adequate housing (section 26) has both positive and negative dimensions affecting private parties, not only the state. (2) A landlord's common law right to terminate a lease is subject to the RHA's unfair practice provisions. (3) Section 4(5)(c) of the RHA imposes a dual requirement: termination grounds must be specified in the lease AND must not constitute an unfair practice. (4) "Unfair practice" encompasses single acts, not only systematic conduct, and includes conduct that unreasonably prejudices the "interests" (broader than legal rights) of landlords or tenants. (5) The Rental Housing Tribunal has primary jurisdiction to determine whether lease terminations constitute unfair practices. (6) The Act creates a balanced framework protecting both landlord investment returns and tenant security of tenure. (7) Courts hearing eviction applications must consider whether referral to the Tribunal is appropriate as part of considering "all relevant circumstances" under section 26(3). The case also illustrates judicial remedial flexibility under section 172(1)(b) of the Constitution. However, the strong dissent highlights tensions regarding: pleading requirements in constitutional litigation; when parties may raise new legal grounds on appeal; the role of tribunals versus courts; and appropriate remedies where parties have made strategic litigation choices.