A Johannesburg man’s ambitious plan to transform his rental property into his future home has resulted in a significant legal defeat, as a court has denied his claims for reimbursement for renovations made while renting.

The saga began in January 2010 when the tenant entered into a two-year lease with his landlord, setting an initial rent of R20,000 per month, along with utilities, and stipulating a minimum 10% escalation upon renewal. However, both parties opted to delete certain clauses from the lease contract, which later proved pivotal in the ensuing disputes.

The landlord said this was done to remove any obligations he may have toward the leasing agent, Jawitz Properties. Meanwhile, the tenant claimed that they had reached an oral agreement that he would put in an offer to purchase the property as soon as his financial position allowed him to obtain a home loan. 

After the lease expired in 2012, the landlord shifted the rental agreement to a month-to-month basis, increasing the rent to R22,000. In August 2015, he relocated to Canada, and his mother, a qualified estate agent, managed the property, including the collection of rent and inspection of the property on his behalf.

The rent remained constant until December 2017, when it was increased to R 28,000. During this time, the tenant was an erratic payer; he skipped monthly payments or sometimes paid for more than one month’s rent at a time.

In May 2018, the landlord’s legal representatives informed the tenant of R36,000 owed in rent arrears and invited him to submit an offer to purchase the property, which was listed for sale at R3.6 million. The tenant proposed a cash offer of R3.3 million, which the landlord rejected. The property was ultimately sold in March 2022 for R3 million.

Subsequently, the tenant was evicted in December 2021, reportedly owing approximately R1 million in unpaid rent.

In an effort to recuperate some of the funds, the landlord sought relief in the Johannesburg High Court seeking at least R896,000 from the unpaid rent.

Meanwhile, the tenant argued that there was a verbal agreement within the first two years of the lease and based on that, he made several substantial improvements to the property because he had plans to buy the property.  Among the renovations was a R394,000 kitchen refurbishment and a R520,000 painting and waterproofing, which the tenant argued increased the property’s market value significantly.

He argued that because of the improvements, the market value of the property increased from R2.6 million to R3.5 million and that the property was ultimately sold for R3 million.

The tenant claimed over R900,000 for contractual damages and, in the alternative, an unjustified enrichment claim of R400,000.

Furthermore, he didn’t deny that he did not pay rent between December 2017 until his eviction in December 2021. He only paid for two months in March and April 2018.

He explained that he refused to pay the rent because the landlord unreasonably increased the rental by 21% from R22,000 to R28,000.  

On the other hand, the landlord didn’t deny the renovations; however, he challenged the necessity of the improvements and the obligation to reimburse tenant the expenses incurred.

Acting Judge Sha’ista Kazee presided over the case and noted that from the evidence presented, no verbal agreement existed regarding purchase discussions. She highlighted that the tenant had been granted a formal opportunity to purchase the property, but his offer was not accepted.

Additionally, under the terms laid out in the lease agreement, the landlord was well within his rights to increase the rent by a minimum of 10% every two years. The judge underscored that if only this escalation had been considered, the rent would have already exceeded R28,000 by December 2017.

Regarding the renovations, the judge found that the lease agreement’s Clause 12 expressly denies the tenant any entitlement to reimbursement for improvements made to the property. Stating that:  “with or without the consent of the lessor, he shall in any event receive no compensation therefore and shall either at his own expense remove same immediately at the request of the lessor”.

Meanwhile, it was also noted that no inspection was conducted when the tenant left the house and when he left, he removed some of the improvements he made to the property. This includes a geyser in the garage. He also took the solar geyser, his furniture and other movables.

Ultimately, judge Kazee ruled in favour of the landlord’s claim for R896,000 and ordered that the tenant pay the legal costs of the proceedings. 

sinenhlanhla.masilela@iol.co.za

IOL News

Get your news on the go, click here to join the IOL News WhatsApp channel. 

Source link