In a case brought to the Constitutional Court, a group of ousted tenants claim that their right to adequate housing was violated by owners Aengus Lifestyle Properties, who made the decision to cancel their leases and raise the rent by up to 150% at the ‘Lowliebenhof’ building in Smit Street, Johannesburg.
The tenants argued that the cancellation was not compliant with the clause in their lease agreement because it was terminated unfairly and was in defiance of the Rental Housing Act stipulations.
The tenants argued that the cancellation was not compliant with the clause in their lease agreement because it was terminated unfairly and was in defiance of the Rental Housing Act stipulations.
They claim that the impact on the tenants would decrease their quality of life and leave seven of the group homeless.
The Inner City Resource centre submitted the landlord’s right to increase their profit is not a plausible reason to deprive their tenants of their rights. The lease cancellation and increased rent would have a disproportional impact on the tenants and is tantamount to unfair practice.
Aengus, a company that focuses on inner city revitalisation and developing upmarket living spaces in Johannesburg, argues that their action was compliant with their contractual obligations under the cancellation clause in the lease agreement.
Aengus stated that they were compliant under the Prevention of Illegal Eviction Act, which specifies that you can only evict someone if they have alternative accommodation. Aengus claims they offered each tenant alternative cheaper accommodation and three months’ notice of cancellation. Residents were also offered new rental amounts in new leases which, Aengus argued, stands as invitation to decide a new settlement.
Michelle Dickens, Managing Director at TPN, Credit Bureau, South Africa’s only specialist property credit bureau, says eviction procedures have often been the subject of South African court cases and each outcome has the potential to inform future rulings and stipulations.
“Should the court find against the landlord, cancellation of leases, even when done within the terms of a lease agreement, could be set aside as unfair or unreasonable.
As Aengus took these measures in order to increase their profit, this case sets the rights of tenants to adequate housing against the landlord’s right to pursue profit, says Dickens.
“The big questions in this case are: who is responsible for the social costs of cases like these, do constitutional rights exceed contractual rights and how should the rights of tenants and landlords be balanced when situations such as this one arise?”
In a developing economy and industry, capital accumulation is vital to the regeneration of areas like Johannesburg’s inner city. Although this may cause hardships for certain tenants, the long-term effect will create wealth and generate progress within the South African economy, ultimately benefitting all sides.
The tenants have escalated their case against Aengus, starting at the Rental Housing Tribunal, on to the High Court and Supreme Court of Appeal after the landlord applied to have them evicted, and now to the Constitutional Court.
The parties are now awaiting a decision from the Constitutional Court, where judgement is currently reserved.
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