CPA: the all-important 20-day clause

CPA: the all-important 20-day clause

Private Property South Africa
Lea Jacobs

While the Consumer Protection Act (CPA) has done South African consumers an enormous favour by protecting their rights it has, unfortunately, also led to a great deal of confusion as to what a tenant’s rights actually are. This in turn can end up hitting where it hurts the most: the wallet.

In one example, a tenant gave notice on 5 May that he would be vacating the property on 31 May because, despite verbal assurances that the property would not be put on the market during the lease period that was due to expire on 31 July, the landlord had begun to market the home.

When the tenant contacted the landlord telephonically, he was told that the landlord would claim no further rent and would refund the deposit (less damages) if the current tenant was able to find new tenants who were willing to move in on 1 June.

The tenant proceeded to advertise the property on several websites and arranged appointments to view for five prospective tenants. However, when informed of the arrangements via email, the landlord denied telling the tenant to find new tenants and asked that the appointments to view the property be cancelled. The reason for the request? He did not want to rent the house out as it was for sale.

He then insisted that the tenant pay June’s rent and also stated that he would use the deposit to pay the rent owing in July. If the property was subsequently sold and the new owner moved in, he would refund the additional rental paid.

Outrageous? Or not?

While this may seem outrageous – after all, who can afford to pay two months’ rent on a property in which they no longer live? – it appears that the landlord is well within his rights to demand full compensation.

Alan Levy from Alan Levy Attorneys says that the tenant should have provided 20 business days’ notice in terms of the CPA. Having failed to do so, the tenant was not then protected under the act, and the landlord was well within his rights to insist that the tenant see out the lease agreement until 31 July.

The* tenant is* contractually bound to honour the terms of the lease agreement until 31 July. The CPA allows, in certain circumstances, for the tenant to nevertheless cancel the lease with 20 business days’ notice, subject to a ‘reasonable cancellation penalty’ being payable by the tenant to the landlord.”

You may think the existing tenant would have some recourse as the landlord had stated that he could find a new tenant to take over the lease. However, the fact that the tenant had a verbal agreement to find new tenants unfortunately doesn’t seem to hold much water either. Levy explains: “Normally the written lease agreement contains a clause providing that all verbal statements are excluded from the agreement between the landlord and tenant and therefore verbal statements will not be binding between the parties.”

This case should serve as a wake-up call to all those who assume that the CPA will cover their backs in any eventuality. Yes, the CPA is aimed at protecting consumer rights but this in no way means that it won’t also protect the rights of landlords. It pays to read the fine print and ensure that if you are planning to renege on a lease agreement, you do so in a responsible way that is consistent with the CPA.

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