Con­sumer act ex­cludes im­mov­able prop­erty leases

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - Pa­trick Bracher

Fix­ing a max­i­mum term for leases of 24 months is ab­surd

THE Con­sumer Pro­tec­tion Act does not ap­ply to im­mov­able prop­erty leases. There are a num­ber of rea­sons why this is so. The first rea­son is that the act says so. A ser­vice un­der the act does not in­clude a right of oc­cu­pancy of im­mov­able prop­erty in terms of a rental.

A rental is a lease, namely an agree­ment in terms of which tem­po­rary pos­ses­sion of any premises or other im­mov­able prop­erty is de­liv­ered to the con­sumer for con­sid­er­a­tion. If the act says that a ser­vice does not in­clude a lease, then it does not ap­ply to leases.

Se­condly, ac­cord­ing to the reg­u­la­tions, a fixed term agree­ment may not ex­ceed a max­i­mum du­ra­tion of 24 months un­less the sup­plier can show a demon­stra­ble fi­nan­cial ben­e­fit to the con­sumer. There is not al­ways a demon­stra­ble fi­nan­cial ben­e­fit to a con­sumer hav­ing a lease of 30 months rather than 24 months. Fix­ing a max­i­mum term for leases of 24 months, in­clud­ing leases of busi­ness premises to in­di­vid­u­als, is ab­surd in the true sense of that word.

Con­sumers are pro­tected enough un­der com­mon law and statute.

En­tire books have been writ­ten on the com­mon law of land­lord and ten­ant de­scrib­ing a ra­tio­nal and ef­fec­tive sys­tem of let­ting prop­erty de­vel­oped over hun­dreds of years.

More im­por­tantly, rentals are pro­tected un­der the Rental Hous­ing Act. The act in­cludes pro­vi­sions re­lat­ing to leases and the re­la­tion­ship be­tween land­lord and ten­ant. A writ­ten or oral lease is deemed to in­clude a num­ber of spec­i­fied con­di­tions that pro­tect the ten­ant. Rights on ter­mi­na­tion are ex­plic­itly dealt with. The act cre­ates a Rental Hous­ing Tri­bunal which does the work that would have been done by the Na­tional Con­sumer Com­mis­sion if rentals had fallen un­der the Con­sumer Pro­tec­tion Act. The Min­is­ter of Hous­ing is en­ti­tled to make com­pre­hen­sive reg­u­la­tions in­clud­ing those re­lat­ing to un­fair let­ting prac­tices. The fact that there is an­other piece of leg­is­la­tion act deal­ing with the mat­ter does not it­self ex­clude the Con­sumer Pro­tec­tion Act be­cause the two can be read to­gether giv­ing the con­sumer the great­est pro­tec­tion. How­ever, rentals are specif­i­cally ex­cluded from the Con­sumer Pro­tec­tion Act, and the Rental Hous­ing Act has mech­a­nisms avail­able to pro­tect ten­ants to the ex­tent that the leg­is­la­ture wishes to do so.

Pa­trick Bracher is a se­nior part­ner at Deneys Reitz.

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