The impact of section 14 of the Consumer Protection Act on fixed term lease agreements

Abstract

The impact of section 14 of the Consumer Protection Act 68 of 2008 (CPA) on fixed term lease agreements of immovable property is discussed and the manner in which section 14 must be interpreted is determined. The impact of section 14 of the CPA on fixed term lease agreements of immovable property is analysed by determining the application of the CPA to these agreements. The CPA applies to lease agreements entered into by landlords letting immovable property in the ordinary course of business to a tenant, except where the tenant is the State or a juristic person with an asset value or annual turnover of two million rand or more at the time of entering into the agreement. It is shown that the scope of application of section 14 creates ambiguity as the application has some unusual and unintended consequences for the law of lease. Some important aspects raised by scholars are highlighted, which include, inter alia, early cancellation, duration limitations for commercial tenants, allowing repeated breach, delays in eviction, difficulties of the landlord in retaking possession of the leased premises and empowering consumers to act deceitfully or to exploit suppliers. In the discussion it is illustrated that the CPA must be interpreted in a manner that gives effect to its purpose, which includes the promotion of fair business practices and the protection of consumers from unconscionable, unfair, unreasonable, unjust and improper trade practices. It is further argued that the manner in which the EU and Ontario deals with residential and commercial lease agreements in consumer protection legislation, should be adopted as these lease agreements are excluded from the legislation which deals with consumer protection specifically. It is against this background that the research findings indicate that section 14 has some unusual and perhaps unintended consequences for the law of lease. Applying section 14 to fixed term leases complicate the law of lease, particularly as a result of the collective impact on the common law principles governing leases. The impact of section 14 on fixed term residential and commercial leases result therein that the purpose is not attained as the application of these leases does not give effect to the purpose which the CPA aims to achieve