The Consumer Protection Act 20-day notice period for tenants

We remember April 2011 looming and bringing with it the Consumer Protection Act (CPA) with its reach extending to Lease Agreements.  Prior to this colleagues and I attended numerous seminars at quite some cost – there were many people giving talks on their interpretation of the then proposed Act and their opinion on whether or not property rental agreements would fall under the ambit of the CPA.  Eventually it was clear that leases did indeed fall under this legislation, and finally, some very well-informed seminars later we had a good understanding of what was covered by the Act.

Before this enlightenment we initially understood that the CPA was born out of a need to protect consumers and believed that when written they were thinking in terms of things like Gym memberships, and Cellphone contracts etc., not leases surely?

But a rental agreement is a service as far as the CPA is concerned and amongst other things, the 20 working days notice which the CPA allows on a contract applies to tenants – but subject to penalties – remember that in terms of the Act, the act of giving notice does not cancel the consumers’ liability if the supplier is in for costs or as in the case of leases, loss of income (if the property is not re-let timeously).  
Image from RNEWS

So, in terms of the CPA the consumer (tenant) has the right to provide 20 working days notice (*see exclusion below) but reasonable penalties will apply if the property is not timeously re-let. The landlord however must make every effort to re-let the property, and using a good agent should be able to rent the property again within a couple of months.

The CPA talks about a reasonable penalty being applied and Regulation 5 (3) stipulates that a supplier (landlord) cannot “charge a consumer a charge that would have the effect of negating the consumer’s right to cancel a fixed term consumer agreement as afforded to the consumer by the Act”, meaning that the penalty must not be so great as to make it impossible for the tenant to cancel, e.g. if six months remaining on the lease, charging the tenant the rental for the remainder of the lease period. Also the landlord cannot charge a penalty if a loss is not incurred, for example a replacement tenant is found in the first week and occupation date corresponds with the date the exiting tenant is vacating.

A reasonable penalty is thought to be up to about two months' rent. And a tenant may also be liable to pay any agent's commission and costs of marketing, i.e. the landlord may recover reasonable costs incurred.

* Note: A lease does not fall under the ambit of the CPA if the consumer (tenant) is a juristic entity with an annual turnover which exceeds the threshold stipulated by the Minister of Trade and Industry (R2 000 000.00).  All natural people are consumers regardless of their net asset value.

The information contained in this article expresses our thoughts, views and understanding based on our experience and is not to be taken as legal advice. As such LettingWorx Rentals will not be liable for any errors or omissions in this information.

LettingWorx Property Rentals
Southern Suburbs, Cape Town
Telephone:083 324 7401