Lease agreements, the application of the Consumer Protection Act (CPA) in public liability claims

Will the Consumer Protection Act, Act 68 of 2008 (the “CPA”) possibly protect a tenant in a claim against the landlord where the tenant for instance was injured on the leased property as a result of an incident that was caused by the wrongful and negligent breach of the landlord to ensure that the property is properly maintained and in a safe condition for use?

Section 5 of the CPA makes it clear that it is applicable to residential lease agreements, subject to certain requirements.

Without going into all the required aspects, for purposes of this discussion, the meaning of “in the ordinary course of business” is scrutinised.

The Act does not define “in the ordinary course of business”. The test for determining whether a contract falls within the ordinary course of business, was dealt with in the case of Amalgamated Banks of South Africa BPK vs De Goede & ‘n Ander 1997 (94) SA 66 (A). The question is whether the contract is one with terms and conditions that ordinary business persons would use. This means that if a salary earning individual owns immovable property and leases it to increase his or her monthly income, the CPA will be applicable. The CPA will not be applicable if it is a once-off transaction, for instance, if a teacher rents out his holiday home to a foreign student for the duration of the student’s visit, but the teacher does not normally rent out this holiday home. It also does not have to be within the ordinary course of the landlord’s business for the CPA to be applicable. Should the landlord rent the immovable property out on a regular basis or has rented it out more than once, it is deemed to be within the ordinary course of business.

For the CPA to be applicable in these instances, there are certain provisions that must be included in a residential lease agreement. In addition, there are certain provisions contained in the Rental Housing Act 50 of 1999 that must be included in residential lease agreements and are deemed to be part of the terms of the agreement, whether it is agreed to in writing by the parties or not.

Therefore, depending on each matter’s facts and whether the residential lease agreement complies with the requirements of current legislation, a tenant may have a claim against a landlord, based on the provisions of the CPA, for damages suffered, giving rise to a public liability claim.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)