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).
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| 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
property@lettingworx.co.za
Telephone:083 324 7401
LettingWorx Property Rentals
Southern Suburbs, Cape Town
property@lettingworx.co.za
Telephone:083 324 7401
