A Johannesburg tenant who renovated a rental property in hopes of buying it has lost a legal battle against his landlord, who sold the home for R3 million. The High Court ruled in favor of the landlord, ordering the tenant to pay R896,000 in unpaid rent and legal costs.
The dispute began in 2010 with a two-year lease at R20,000 monthly rent, including utilities, with a minimum 10% escalation on renewal. Certain lease clauses were removed, which the tenant claimed supported an oral agreement to purchase the property once he could secure a loan. The landlord said the changes only removed obligations to the leasing agent.
After the lease expired in 2012, it became month-to-month, with rent rising to R22,000. In 2015, the landlord moved to Canada, and his mother, an estate agent, managed the property. By December 2017, rent increased to R28,000. The rent was paid erratically, accruing R36,000 in arrears by May 2018 and about R1 million by his eviction in December 2021.
The tenant renovated the property, spending R394,000 on a kitchen and R520,000 on painting and waterproofing, claiming these raised the property’s value from R2.6 million to R3.5 million. In 2018, the landlord listed the property for R3.6 million; the tenant’s R3.3 million offer was rejected. The property sold for R3 million in 2022.
The tenant sought over R900,000 for contractual damages or R400,000 for unjust enrichment, arguing the renovations boosted the sale price. He admitted to skipping rent from December 2017 to December 2021, except for two months in 2018, citing the 21% rent hike as unreasonable. The landlord pursued R896,000 in unpaid rent and disputed any obligation to reimburse renovation costs.
Acting Judge Sha’ista Kazee found no evidence of an oral purchase agreement. The lease allowed rent increases, and by 2017, the rent could have exceeded R28,000. Clause 12 barred reimbursement for improvements, and the tenant’s removal of fixtures, like a geyser, weakened his claim. The court awarded the landlord’s claim and dismissed the tenant’s.
The case underscores the importance of clear lease terms and written agreements for property improvements or purchase options.
