• lease agreement - rental escalation - Braamfontein - right to housing - Constitutional Court

In this matter, SERI is working with Mdladlamba Attorneys in Johannesburg to represent 18 lessees of a block of flats. Stuart Wilson from SERI is one of the counsel acting for the appellants.

The respondent - a property developer who purchased a residential building in Braamfontein called Lowliebenhof which was occupied by the appellants - terminated the appellants’ leases in order to increase their rentals in excess of the amounts permitted by the escalation clauses contained in the agreements themselves. The appellants argue that this is unlawful because -

• Each of the lease agreements contains a tacit term prohibiting the termination of the lease for the sole   purpose of circumventing the escalation clauses; or
• The termination of the appellants’ lease agreements breached their rights of access to adequate housing in section 26(1) of the Constitution. As such the respondent’s purported termination of the appellants’ leases was contrary to public policy.

The case was heard in the Supreme Court of Appeal (SCA) on 17 May 2011. Judgment was handed down on 1 June 2011, where the SCA dismissed the appeal. On 22 June 2011, the appellants launched an application for leave to appeal to the Constitutional Court against the SCA judgment. They seek a declaration that the termination of their leases was unlawful because they were terminated with the express intention of more than doubling the rent, in violation of clear contractual and legislative provisions governing the procedure and conditions under which the landlord can do so. On 1 August 2011, the applicants were granted a hearing in the Constitutional Court concerning their application for leave to appeal the recent SCA judgment. The hearing was held on 3 November 2011. The Inner City Resource Centre (ICRC) was joined as amicus curiae and was represented by Advocates Heidi Barnes and Khanya Jele, together with Norton Rose Attorneys (read the amicus' submissions here).

On 13 March 2012, judgment was handed down. In a majority judgment written by Cameron J, the Court found that that the High Court and SCA failed to give adequate weight to the Rental Housing Act and that the landlord’s conduct may have amounted to an “unfair practice”. The Rental Housing Tribunal is empowered to determine whether a landlord committed an unfair practice, and it might accordingly have ruled in the tenants’ favour. The applicants are directed to lodge a complaint with the Gauteng Rental Housing Tribunal before 2 May 2012. On 2 May 2012, the complaint to the Tribunal was filed.

• Statement of Complaint to the Rental Housing Tribunal (2 May 2012) here.
• SERI press release (13 March 2012) here.
• Constitutional Court judgment (13 March 2012) here and summary of judgment here.
• Submissions of the amicus curiae in the Constitutional Court (21 October 2011) here.
• Applicants' Heads of Argument (11 September 2011) here.
• Notice of leave to appeal in the Constitutional Court (22 June 2011) here and founding affidavit here.
• Judgment (1 June 2011) here.
• Media summary of SCA judgment (1 June 2011) here.
• Appellants' Heads of Argument here.
• Appellants' Practice Note here.