Opinion regarding the applicability of the Consumer Protection Act with regards to private rentals.

It is widely accepted and known that in the event of a private sale between a home owner and a purchaser, the Consumer Protection Act (CPA) does not apply as the definition of a supplier in terms of the CPA clearly requires “means a person who markets any goods or services…” , and when used as a verb “in relation to goods includes sell, rent, exchange and hire in the ordinary course of business for consideration” .

Seeing that it is not in a private owner’s ordinary course of business to sell property the seller does not comply with the definition of supply or supplier and thus the CPA and all its remedies, rights and obligations do not apply in the event of private sales.

Although this discussion is not about private sales, but private rentals, I respectfully differ from the school of thought that is of the opinion the CPA applies to private rentals as it is equally not a private lessor’s ordinary course of business to rent out properties if he has one rental premises that he rents out on a monthly basis and therefore the rights, obligations and remedies in terms of the CPA should not apply in these instances, but rather the Rental Housing Act 50 of 1999 as well as the Rental Housing Amendment Bill of 2013 and the  Regulations on the Rental Housing Act Unfair Practices Regulations as contained in Government Gazette 30863 of 14 March 2008.

However, even in the event where the CPA is applied to private rental housing contracts and the lessee calls upon Section 14 of the CPA in cancelling the rental agreement in terms of Section 14(2)(b)(i) (bb) by way of 20 business day notice arguing that it is a fixed term agreement as prescribed in the CPA, the lessor will equally be entitled to impose a reasonable cancellation penalty due to the lessee’s cancellation as aforementioned.

This is confirmed in Section 14(3)(1)(b)(i).  This reasonable cancellation penalty includes all damage that the lessor may have suffered due to the lessee’s premature cancellation and can only be determined once the damage of the lessor due to the premature cancellation has ceased (for example when a suitable alternative tenant has been found). 

In closing it is my opinion that the deposit of the lessee can and should be retained as a partial limitation of the lessor’s damage but with reservation of the lessor’s rights to claim further damage against the lessee once such amount has been determined.