This Amendment Act is not in force yet (the Rental Housing Act 50 of 1999 is still in force), but the President has assented to (on 5 November 2014). The following are important provisions:

1. Lease agreement in writing – The Amendment Act requires that all residential lease agreements must be in writing. Presently a lease agreement only has to be in writing if “requested by the tenant”. When the Amendment Act comes into force, all lease agreements for residential property will have to be in writing and signed by both the landlord and the tenant and the onus is on the landlord to comply with this requirement.
2. 2. List of defects – The Amendment Act requires that a list of defects in the property be made during the entry inspection and in writing and must be attached to the written lease agreement as an annexure.
3. 3. The Act introduces a new concept: “habitability”

“habitability” – “refers to a dwelling that is safe and suitable for living in and includes –

(a) adequate space;

(b) protection from the elements and other threats to health;

(c) physical safety of the tenant, the tenant’s household and visitors; and

(d) a structurally sound building. “

Failure by the landlord to ensure “habitability” will be an offence (see below).

4. Draft lease agreement by the Minister – The Amendment Act requires the Minister of Human Settlements to develop a pro-forma lease agreement in all 11 official languages, containing the minimum requirements set out in the Act, as a guideline for landlords and tenants.
5. Offences: Fines or Imprisonment for non-compliance – The most radical change that will be brought about by the Amendment Act is that it will criminalise certain conduct that involves interfering with the rights of the tenant or landlord or failure by the landlord or tenant to fulfil their obligations under the Act. These new offences carry a penalty of either a fine or imprisonment not exceeding 2 years, or both.

A few examples of the offences created by the Amendment Act:

• Disconnecting the power and utilities to the property.
• Not providing the property to the tenant in a habitable condition
• (see definition of “habitable” above).
• Locking the property and denying the tenant access to the property.
• Failing to comply with a ruling of the Tribunal.
• Failing to provide the tenant with a written lease agreement.
• Failing by the landlord to maintain the leased property.
• Failure by the landlord to repay the tenant’s deposit with interest.

6. Establishment of the Rental Housing Information Office – The Amendment Act requires every local municipality to establish a Rental Housing Information Office, to advise tenants and landlords on their rights and obligations relating to dwellings within its area of jurisdiction.
7. Rental Housing Tribunal – The Amendment Act extends the powers of the Rental Housing Tribunal. Section 13 deals with complaints to the Tribunal. The Tribunal must within 30 days of receipt of a complaint refer any matter that relates to eviction to a competent court. The Tribunal can of its own accord, or if requested by a member of the Tribunal, rescind or vary any of its rulings if:

• it was erroneously sought or granted in the absence of an affected person;
• it contains an ambiguity or patent error or omission; or
• it was granted as a result of a mistake common to all parties to the proceedings.

8. The Appeal Process – Section 17A of the Amendment Act sets out the Appeal Process should a person feel aggrieved by a decision of the Tribunal. The aggrieved party must apply in writing within 14 days of receipt of the decision to the Member of the Executive Council (“MEC”). The MEC must then within one day of receipt of the appeal appoint one or two adjudicators and the appeal will then be referred for hearing. The appeal must be finalised within 30 days of referral to the MEC. The adjudicators can refer the matter back to the Tribunal or confirm, set aside or amend the decision.

Sections 21 and 22 of the Amendment Act states that the date of commencement of the Amendment Act must still be determined by the President and must be published in the Government Gazette; and any additional obligations imposed on either party by the Amendment Act will only become effective six months from the date of the commencement.

When a lease agreement expires, it is common that parties do not enter into a new written lease agreement, but simply renew and thereby extend the current lease for a further period.

In the recent Constitutional Court case of Mokone v Tassos Properties CC and Another [2017] ZACC 25 (“Mokone”) the court considered whether the renewal of a lease agreement also renewed the lessee’s right to buy the property if the lessor decided to sell it (a right of pre-emption), even though the renewal did not refer to the right of pre-emption.

The facts

In March 2004 Tassos Properties CC (“Tassos”) entered into a written lease agreement with Mokone. The agreement made provision for Mokone to lease a premises from Tassos at a monthly rental of R4 500.00. The initial lease period was for one year, which was renewable for a further period of one year, the rental price to be agreed upon. After the initial lease period lapsed, a handwritten note was made on the front page of the original lease agreement which read: “3/5/06 extend till 31/5/2014 and monthly rental R5 500.00”.

In July 2009 Tassos entered into a sale agreement with Blue Canyon CC (“Blue Canyon”). Subsequently, during March 2010, the property was transferred to Blue Canyon. In January 2012 Mokone notified Tassos in writing that she would be exercising her right of pre-emption and tendered payment for the amount that Blue Canyon had purchased the property for. Tassos refused, on the basis that the right of pre-emption had not been extended when the lease was extended and was therefore, unenforceable.

In April 2012 Mokone instituted action against Tassos and Blue Canyon to set aside the sale and transfer of the leased premises. She further sought an order enforcing a sale of the property to her, contending that the note on the original lease agreement that extended the lease had also extended the clause containing the right of pre-emption.

The outcome

Before the Mokone case our courts applied the principle that when parties simply agree to extend a lease agreement, all the terms incidental to (forming part of) the contractual relationship between lessor and tenant are renewed. The terms that are collateral to and independent of the relationship are not renewed, unless the parties’ intention to renew such terms are clear. A right of pre-emption right is independent of a lease agreement and this right must be expressly renewed by the parties.

The Constitutional Court took issue with the approach that our courts have hitherto adopted and stated that this approach unduly favours lessors. The majority held that it was unreasonable to expect lay people to be able to draw a distinction between terms that are incidental to (form part of) the lease agreement and those that are collateral to and independent of the lease agreement.

The court held that when lay people use the words “we agree that this lease be extended” they generally intend to extend all the terms of the written lease agreement.  Therefore, the entire contract had been extended, including the right of pre-emption.

When renewing a lease, it is important therefore that the parties make clear their intention to renew all the terms of the lease, including terms that are collateral to and do not necessarily form part of the lease, such as a right of pre-emption for the lessee. If this is not their intention the right of pre-emption should be specifically excluded from the renewal.