Participants of the Law and Poverty Research Project as well as the South African Research Chair in Constitutional Property Law provided research support to the Inner City Resource Centre for its intervention as amicus curiae in the case of Maphango v Aengus Lifestyle Properties (Pty) Ltd CCT57/11, heard in the Constitutional Court on 3 November, 2011. The applicants in the case are tenants who leased residential property in the Johannesburg inner city (in a building occupied predominantly by low-income tenants who have benefitted from government support and welfare payments) for periods of up to seventeen years. The property was bought by the respondent, Aengus Lifestyle Properties (‘Aengus’); a company that buys inner city properties, effects cosmetic renovations and rents out the renovated units at increased rates. After purchasing the property, Aengus demanded rentals from the applicants at rates double to triple of those previously paid. The applicants, who are poor, could not afford these rentals and in response, Aengus terminated the leases. Alternative accommodation of the same price and standard is not available to the tenants and seven of the residents will be rendered homeless if they are evicted from the property.
The issue that arose was whether it was lawful and constitutionally permissible, in light of the Rental Housing Act and section 26 of the Constitution (which provides that everyone has the right to access to adequate housing), for the landlord to circumvent protective ‘escalation clauses’ contained in the leases by simply terminating the contracts in terms of a cancellation clause with the purpose of entering into new lease agreements at much higher rentals.
In an appeal from the Supreme Court of Appeal, the applicants argued before the Constitutional Court that the tenants’ right to access to adequate housing in terms of section 26(1) of the Constitution had been infringed by the cancellation and that the cancellation was therefore contrary to public policy; that the termination of the leases constituted an ‘unfair practice’ in terms of the Rental Housing Act; and that the leases contain a tacit term that rent could not be increased beyond the limits set out in the escalation clauses.
The amicus curiae proceeded to argue that the horizontal application of the section 26 right to access to adequate housing should be recognised and ‘hardwired’ into the relationship between landlords and tenants by interpreting the Rental Housing Act in a manner that protects constitutional rights or, alternatively, by developing the common law of lease. In particular, it was argued that section 4(5)(c) of the Rental Housing Act, which prohibits ‘unfair practices’, prohibited the respondent from cancelling the lease agreements. If the Rental Housing Act could not be interpreted so as to vindicate the section 26 right of the applicants, it was argued that the common law should be developed so as to recognise an implied term whereby a lessor may not cancel a lease agreement in order to circumvent protective clauses where the termination of the lease would cause disproportionate hardship to the lessee.
The respondent relied on its contractual right to cancel the contract and argued that if this right was denied, the effect would be to create a lease in perpetuity. In addition to contravening the doctrine of pacta sunt servanda, this would constitute a grave infringement of the landlord’s property rights.
Members of the Court actively engaged all parties on diverse issues including questions as to who should bear the social cost of the tenants’ right to access to adequate housing; how the rights of landlords and tenants should be balanced in practice; and how the Rental Housing Act could be interpreted and the common law developed so as to ensure that that an appropriate balance is struck between the right to access to adequate housing and property rights of private parties. Judgment was reserved.
The intervention of the Inner City Resource Centre as amicus curiae aimed to provide further insight as to the substantive content of the right to access to adequate housing as including elements of security of tenure and affordability, the correct interpretation of the Rental Housing Act and the possible need to develop the common law in the light of constitutional rights and values. In addition, significant comparative research, which focussed on rental housing practice in Germany and Canada, was conducted to illustrate how the relationship between landlords and tenants could be infused with fairness while simultaneously striking an equitable balance between the rights and interests of all parties concerned.
Amicus curiae submissions are available here.