26 Feb 2013
A Property24 reader asks:
In June last year, I signed a 12 month contract with an estate agent letting out the property on behalf of the owner. Now, a new estate agent wants to increase my rent from 1 April 2013, however, my contract makes no stipulation regarding rental increases.
Are they allowed to do this before the original agreement comes to an end?
Marlon Shevelew, specialist rental and eviction attorney at Cape-based legal firm Marlon Shevelew and Associates, replies:
If the lease contains no price escalation clause then the landlord may not increase the rental, nor may the landlord cancel the agreement early as a means to coerce the tenant into negotiating a lease agreement with a higher rental amount.
In any event - even with such a clause - the landlord cannot usually do so. The Constitutional Court recently held in Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd 2012 (3) SA 531 (CC) that the mere fact that the written lease agreement purports to grant the landlord rights to take specific action against a tenant does not necessarily mean that the landlord will actually be able to enforce such rights, specifically where doing so would be “oppressive” or “unconscionable” for purposes of the Rental Housing Act. Arguably, a clause allowing for unilateral increases in the rental may be “oppressive” or “unconscionable”, especially where done without reasonable notice.
The Consumer Protection Act also prohibits unfair, unreasonable or unjust terms in consumer agreements - including agreements which are unfair in respect of price.
The CPA Regulations also state that terms "allowing the supplier to increase the price agreed with the consumer when the agreement was concluded without giving the consumer the right to terminate the agreement ..." are likewise unfair.
It follows that plainly no right to unilaterally increase the rental exists in this matter, and even if there was a clause allowing it - its validity is questionable.
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Marlon ShevelewMarlon Shevelew is the Director of Marlon Shevelew and Associates Inc., a Cape Town Law firm, specialising in Rental Property, Contractual, Consumer and Company law. Mr Shevelew is a National Legal Advisor and/or presenter of rental property seminars with the Institute of Estate Agents (IEASA), Tenant Profile Network (TPN), PAYPROP, the University of Cape Town (UCT) and is a monthly guest expert on the “Law Report” on SAfm. Mr Shevelew also created the unique Rental Retainer Club which offers affordable legal fees to clients.
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