select
|

Customer Protection Act entitles tenant to cancel property lease

A fair amount of confusion and dismay has become evident among landlords and tenants following the promulgation of the Consumer Protection Act (CPA) which, among other things, allows a tenant to cancel a lease immediately, no matter what the original agreement specified.

This is on the condition that the CPA is deemed to apply to the lease with regards to supplier (landlord) and consumer (tenant) relationships and its relevance in terms of a lease, being a fixed term agreement, accordingly.

Discussing this new dispensation, Wayne Albutt, National Manager of Rawson Rentals said, "There are landlords and agents who have not read the CPA carefully and/or do not understand its relevance and have the perception that their rights have been totally overruled and that the tenant can now do more or less what he likes - but this is not the case."

In terms of the CPA, says Albutt, the tenant does have the right to cancel the lease even though he may have signed an agreement to occupy the premises for a specified fixed period (for example, six months or a year). Furthermore the tenant can do this without giving any legitimate reason (for example, loss of a job or sickness). However, tenants going this route are now obliged to give the landlord and/or his agent 20 business days' notice and the landlord is empowered to charge a "reasonable" cancellation penalty.

The term "reasonable," says Albutt, has not been fully defined but cases already taken to the Rental Housing Tribunal, as made provision for according to the Rental Housing Act, indicate that it can cover a fairly comprehensive range of costs, as long as it is reasonable and can be proven.

The landlord is fully entitled to recover all "reasonable costs" and losses incurred through the tenant exercising his right, as per the CPA, to terminate the fixed term agreement (or lease in this case). This can include the landlord's costs of re-advertising the property, in order to replace the tenant, and if the landlord cannot replace the tenant at the same time as the current tenant moves out, the landlord is entitled to charge the tenant for lost rental.

The landlord can also claim the full outstanding fees that are due to the agent, if applicable. The landlord has to, however, be able to prove that he has done everything reasonably possible to minimise his cost and losses. An important point to note is that if the landlord does not re-rent the property at the same, or at more favourable terms and conditions, then he will lose his right to claim reasonable penalties - should the tenant dispute the costs and take this up with the Rental Housing Tribunal.

"All in all," said Albutt, "the new provisions of the Consumer Protection Act, while giving the tenant an escape opportunity, adequately protects the landlord from significant loss. The change brought about by the new act is therefore not as radical as many people have been led to believe."


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK