The Supreme Court of Appeal considered the matter of Maphango v Aengus Lifestyle Properties (Pty) Ltd (2011) 3 All SA 535 recently.
The Respondent was the owner of the premises and the Appellants were the tenants.
The Respondent gave the Appellants written notice of the termination of their leases and further advised that should they wish to continue to occupy the premises they would need to enter a new lease agreement with approximately 100 per cent increased rental.
The Appellants did not accept the termination due to the fact that they were unable to afford the increased rental. The Respondent argued that the premises were currently running at a loss.
In the court a quo the Respondent applied for the eviction of the Appellants on the basis that their leases had been validly terminated.
The Appellants opposed the application on two grounds, firstly that the termination was invalid and secondly that it would not be just and equitable to evict them in terms of the Prevention of Illegal Eviction from Unlawful Occupation of Land Act.
The court held that the termination of the leases was valid and that the Appellants should be evicted.
In the hearing of the appeal the Appellants firstly contended that each lease contained a tacit term which forbids the termination to increase the rental beyond the agreed increment.
Secondly they contended that allowing the Respondent to terminate solely for the purpose of increasing the rental was against public policy.
The SCA did not agree with these contentions as this would introduce the consideration of motive in the exercise of a contractual right, which is generally irrelevant.
The court further held that reasonableness and fairness are not freestanding requirements for the exercise of a contractual right and therefore the enquiry into the reasonableness and fairness of the Respondent’s conduct was unnecessary.
The Appellants further argument that they had a right to security of tenure was also rejected as a lessee’s security of tenure would never endure beyond the end of the notice period.
In addition to this the court held that the Respondent’s conduct did not amount to an “unfair practice” in terms of the Rental Housing Act as it was an isolated occasion.
The appeal was therefore dismissed.