Can a Landlord enforce a lease agreement

CAN A LANDLORD ENFORCE A LEASE AGREEMENT AGAINST THE TENANT IF THE LEASED PREMISES DO NOT HAVE APPROVED PLANS OR A CERTIFICATE OF OCCUPANCY?

This is the question that was answered in the recent case of WIERDA ROAD WEST PROPERTIES (PTY) LTD v SIZWENTSALUBAGOBODO INC, a judgement which was handed down by the Appeal Court on 1 December 2017.

In this case Wierda Road West, the landlord, was attempting to enforce payment of arrear rentals of more than R8 million from the tenant, SizweNtsalubaGobodo, after the tenant had vacated the property during the period of the lease, and stopped paying rent.

In defence of the claim, the tenant raised the fact that certain portions of the leased premises did not have approved building plans and that, accordingly, no certificate of occupancy had been issued by the municipality.  On this basis, they argued that the lease agreement was void, or if not void, unenforceable.

The tenant was successful with this defence in the High Court. Here the court found that that the lease was unenforceable, and that the landlord could therefore not sue the tenant to recover arrear rentals.  The landlord appealed against this decision.

In the Appeal Court, the landlord was successful and the lease agreement was upheld.

The Appeal Court found that even though the erection of a building without approved plans, and the occupation of a building without a certificate of occupancy, gave rise to criminal sanctions, it was not the intention of the legislature to render a lease agreement for such premises, by the parties involved here, void or unenforceable.  The Appeal Court was of the opinion that the penal sanctions in the relevant legislation, and the powers of enforcement given to the municipality, were sufficient to deal with the non-compliance issues.

That the landlord was not the person who had carried out the un-authorised building work was a factor which the Appeal Court considered in making its decision. If the landlord had been the builder, the situation might have been different.  

The findings of the Appeal Court were also bolstered by the facts that the tenant had used the property without incident for a number of years before moving out, and that the premises appeared to be safe and fit for their purpose.

In short, therefore, the answer to the question posed in the title of this Newsflash is ‘yes’.  We now have authority for the proposition that an agreement of lease for a property built without approved plans, and where no occupancy certificate has been issued, is valid and binding.

Deon Welz
January 2018