How Consumer Protection Act Affects Lease of Property — Part 2

Cpa and Lease Agreements
How the CPA effects new Lease Agreements. — Photo: jimtim0505 on Flickr

South Africa’s new Consumer Protection Act comes into effect on 1 April 2011. Part 1 covered the introduction of a “Cooling-off” period and the use of “Voetstoots” clause under the new CPA legislation.

Part 2 deals with some important changes to the law governing Lease Agreements, when the new CPA comes into effect on 1st April.

Now some of my more astute readers will have noticed that this is also April Fools Day. Please people, this is purely co-incidental, however inopportune the date may seem.

Lease Agreements: The CPA introduces some far-reaching changes to Lease Agreements for immovable property. Specifically for ordinary people, the changes affect the maximum duration and grants the parties certain rights of cancellation.

Note that Leases to “Juristic Persons” fall outside the ambit of the CPA. “Juristic Persons” includes Closed Corporations, Companies, Trusts, Partnerships and Associations. No distinction is made between Commercial and Residential property.

Duration of Lease: The maximum duration of a Lease Agreement is 24 months.

Right of Cancellation: The Lessee (consumer) may terminate the Lease at any time after giving 20 (business) days notice, effectively one month. The Lessor must give 20 (business) days notice to cancel for a ‘material failure to comply with the agreement’ and must give 40-80 days notice that the agreement is coming to end.

After expiry, the lease continues on a month to month basis unless the Lessee agrees to a further fixed term.

From the above it can be concluded that the new Consumer Protection Act will bring some much-needed protection for consumers to the market place. Most think that it is also likely to result in Leases being contracted more readily with “Juristic Persons” and not the ordinary consumer. So a spike in Letting to “Juristic Persons” seems likely.

Similarly with the Selling of Property, Transfer Duty from the sale of property to “Juristic Persons” has recently been adjusted downwards to be on par with the Transfer Duty payable by an ordinary consumer. So the trend may be toward a greater number of sales to “Juristic Persons,” than would otherwise have been the case.

The Rental Housing Tribunal already administers a similar (to the CPA) scheme under the Rental Housing Act. It remains to be seen if this body will, in terms of Section 5(3) of the CPA, apply for an ‘industry-wide exemption’ to provisions of the CPA that overlap the Tribunal’s functions.

If there is anything you would like to add, please feel free to do so in the comments.

Source: Bisset Boehmke McBlain
Photo Credit: jimtim0505 on Flickr

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2,084 thoughts on “How Consumer Protection Act Affects Lease of Property — Part 2”

  1. Hi John

    I’ve signed a lease with a private person/landlord yesterday, but still waiting on approval for my dogs to be kept on the premises. In the meanwhile I found a more suited place and would like to cancel the contract.

    I haven’t paid a deposit yet, as the landlord suggested we wait for approval first. Can I still cancel the contract?

    1. Hi Charlene

      It’s worth noting that, whenever cancellation of a contract is envisaged, it’s always best to consult with an attorney first.

      That said, without your deposit in hand to cover legal costs, it’s fairly likely that the lessor may be reluctant to take legal action if you decide not to go ahead with the current lease.

  2. Hi Claire

    Certainly your outrage is justified. Anyone who enters a property without the express permission of the owner is guilty of a criminal offence, trespassing. You can ask them to leave and deny them any future access, if you so wish.

    However, the key consideration here is the fact that you would welcome an aesthetic improvement to your neighbour’s building. Of course, this might also have a favourable impact on the value of your property so it makes sense to let them finish.

    It’s a great idea to get the municipal building inspector involved as every local authority has its own policy for boundary walls, fences and building lines. This may also vary depending on what the site has been zoned for.

    A building or wall may not encroach on building lines unless a waiver has been applied for and granted by the local planning department. Furthermore, the adjoining neighbour’s written consent is required before the municipality will consider the application.

    Where the building encroaches on the building line and a waiver has not been obtained, the building inspector can order it taken down or moved back by a reasonable deadline. After this, a fine of a R100.00 per day may be levied until the offending construction is removed.

    Hope that helps and thanks for your question.

    1. Thank you so much for your very useful advice, John. They are continuing work in that narrow gap, so there was no need for all the drama. In fact, one of the workers is now physically holding the scaffolding, so I’m glad to have been instrumental in creating a much needed job, haha. Regards Claire

  3. Dear John

    I would appreciate your opinion on the boundary dispute that has recently arisen with my neighbour. I own a house in the Western Cape. Next door is a vast warehouse that was unused for several years, but has now been sold and the owner is doing renovations. The issue is that the building is a mere 1.10 m from my boundary.

    Last week, the owner’s workmen climbed over my fence, breaking a tree in the process and proceeded to use materials from my yard to build bracing for the dodgy looking scaffolding they are putting up the side of the warehouse. When I complained, they insisted they were not able to do the work in that small gap and I should be quite happy to allow them in my property to do whatever they pleased.

    I pointed out that it was not my fault that the building was built too close to the boundary, that they should finish that particular part of the building, remove the scaffolding bracing from my yard and under no circumstances come into my property for any reason. I reported this to the municipality and they will send out a building inspector.

    My question is can the municipality insist on their partially demolishing the building to conform to the 2.250m requirement, even though the building has been there for at least 10 years?

    I have no wish to be on bad terms with my neighbour and welcome the improvement to this monstrosity, but I have no intention of allowing them to compromise my security and construct unsafe structures on my side of the fence without the courtesy of asking my permission.

    Your opinion would be appreciated.
    Regards
    Claire

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