Court orders Ritz to move

The view from the famous revolving restaurant atop the Ritz Hotel in Sea Point.

It’s business as usual at Cape Town’s picturesque Ritz hotel in Sea Point, says the facility’s PR and marketing manager, Lisa Carey.

This comes after the Western Cape High Court ordered Ritz Hotel Management company to vacate the premises before Friday June 22.

The property is owned by Ritz Plaza, which filed a litigation against the hotel management company over the lease agreement of the hotel and the court has, in effect, cancelled the current lease agreement.

Judge Patrick Gamble delivered his ruling on the matter on Monday May 28.

The court heard that the management company had failed to pay its rent for the periods of November to December 2016 and February to June 2017. It was the property owner’s March 2017 call for payment of outstanding rentals which resulted in further conflict.

According to the lease agreement, that the management company was deemed to have taken over the running of the Ritz in August 2016 but the venture ran into trouble before the end of that year.

In 2016 R110 million was pumped into upgrading the hotel (“110m upgrade for the Ritz”, Atlantic Sun, October 6, 2016).

By June 2017 the management company owed Ritz Plaza almost R13 million and they were informed that the landlord had elected to cancel the lease. The management company refused to vacate the hotel resulting in the landlord approaching the court in November 2017.

Delivering his judgement on the management company’s response in the matter, Judge Gamble said it was common that a tenant which admittedly failed to pay its rental for a long period of time would not have a leg to stand on when faced with an application to evict it from landlord’s premises.

He said the tenant’s primary obligations under an agreement of lease was a timeous payment of rental in the agreed commodity to the landlord. However, in its defence, the management company argued that its failure to pay rent was the result of the delay in opening of the hotel, which was caused by Ritz Plaza’s failure to provide it timeously with some of the agreed upon funding to upgrade the hotel.

According to a statement issued by Ms Carey on May 28, some issues in dispute between the parties are the subject matter of Ritz Plaza’s winding-up application and the management company’s action for damages (which it instituted last year) for Ritz Plaza’s breach of its obligation to provide critical funding timeously.

It further stated that the management company had invested more than R90 million of its own money into the improvement of the hotel, which included extensive infrastructural and environmental upgrades that were critical to ensuring that the hotel complied with the regulatory requirements to safely and legally operate as a hotel.

The general-manager of the hotel, Johann du Plessis said: “Since the hotel opened in December, we have had overwhelming positive feedback on the hotel’s world-class transformation. Already CASA restaurant and the iconic Top of the Ritz revolving restaurant are firm favourites with both local and international guests.”

Mr Du Plessis added that bookings for the 2018/19 summer season and beyond were looking “very promising”.

The court ordered that if the management company refused to vacate the premises on June 22, the Sheriff of the court was authorised to enter the premises on Friday June 29, and evict the occupants. It further ordered that the management company must pay all the legal costs of this matter.

The management company plans to appeal the judgment and has already instructed its legal team to do so.

Atlantic Sun tried to contact Ritz Plaza, but to no avail. All the court information was obtained via court records.