Author: Maryna Botha – STBB
13 December 2019
DEEMING PROVISION IN S 5 (5) OF THE RENTAL HOUSING ACT WHEN A LEASE EXPIRES AND THE TENANT STAYS ON: CAN IT BE REBUTTED?
SHARMA V HIRSCHOWITZ AND OTHERS (A3064/18)  ZAGPJHC 434 (4 NOVEMBER 2019)
In order to assist in the resolution of disputes, the Rental Housing Act has certain deemed provisions, impliedly forming part of the agreement between the landlord and tenant. This judgment dealt with the provision stating that if, on the expiration of the lease, the tenant remains in the premises with the express or tacit consent of the landlord, the parties are deemed to have entered into a periodic lease generally on the same terms as before, unless there was a written lease agreement with terms to the contrary. Can a tenant argue that an oral rental increase in the periodic lease period was therefore invalid?
‘If on the expiration of the lease the tenant remains in the dwelling with the express or tacit consent of the landlord, the parties are deemed, in the absence of a further written lease, to have entered into a periodic lease, on the same terms and conditions as the expired lease, except that at least one month’s written notice must be given of the intention by either party to terminate the lease.” (our emphasis).
- The words “shall be deemed” are often used in legislation to predicate that a certain subject-matter, e.g. a person, thing, situation or matter, shall be regarded or accepted for the purposes of the statute in question as being of a particular, specified kind whether or not the subject-matter is ordinarily of that kind. The expression has no technical connotation. Its precise meaning, and especially its effect, must be ascertained from its context and the ordinary canons of construction.
- In the present matter, the long title of the Act reflects two overall objectives: general principles governing conflict resolution in the rental housing sector; and providing for the facilitation of sound relations between tenants and landlords and for this purpose to lay down general requirements relating to leases.
- It was clear that the legislature did not intend to preclude the conclusion of further oral lease agreements after the expiration of the lease agreement or to prohibit increased rentals after expiry of initial leases.
- The mischief the legislature intended addressing in section 5(5) is the resolution of disputes which quite often arise in oral or tacit lease agreements about the nature of the terms of the renewed lease. Absent a written agreement, the renewed lease is deemed to be the same as the previous one. This is a perfectly sensible statutory provision designed to provide a rule of thumb to resolve commonly encountered disputes.
- The interpretation contended for by Sharma would: (i) nullify the actual oral agreement simply because it was oral, despite both parties having accepted that it was concluded and implemented; (ii) nullify section 5(1) of the Act which provides that a lease need not be in writing.
- The proper construction to be given to the word ‘deemed’ in this subsection is that it provides prima facie proof in the absence of a written agreement. Section 5(5) of the Act contemplates a situation where the parties’ relationship is not being governed by a written agreement and is therefore a provision to facilitate proof of matters which might otherwise be difficult to prove in a court of law.
- Section 5(5) only applies in the absence of a written lease agreement. It serves as an evidentiary tool and countervailing evidence is thus permissible. As it was common cause that the oral agreement was concluded and implemented it followed that the deeming provision has been rebutted and therefore the rental due under the oral agreement was an enforceable obligation.
The appeal was upheld.
The Judgment can be viewed here