Protections Afforded to Tenants by the Consumer Protection Act

At the forefront of consumer protection law in South Africa is the Consumer Protection Act (the “CPA”). Section 14 of the CPA is of particular importance to the landlord-tenant relationship, but it may not always be clear if such provisions are afforded to the tenant in the circumstances. For Section 14 to apply to a lease, the circumstances must first meet the requirements for application of the CPA as a whole, as well as satisfy the additional requirements of Section 14 itself.

The CPA will broadly apply to every transaction within South Africa (unless specifically exempted). This definition is then further specified by definition below.

“…every transaction within the Republic, unless specifically exempted.”

Transaction refers to any agreement between or among persons for the supply or potential supply of goods or services in exchange for consideration, provided that said person is acting in the ordinary course of business.

Business refers to the continual marketing of any good or service.

Notably, transaction agreements are likened, and the supplier must be acting in the ordinary course of business. As such, the CPA may not apply in the rare circumstance where a tenant approached the landlord who was not marketing the premises.

The CPA goes further to list specific transactions which will be exempt from its provisions. Notably, it will not apply where a consumer is a juristic person whose asset value or annual turnover, at the time of the transaction, equals or exceeds a predetermined threshold value (currently Two Million Rand). As such, the CPA (including Section 14) will not apply to leases where the tenant is a juristic person with an asset value or annual turnover greater than Two Million Rand.

Where the CPA does apply (i.e. the tenant is not a juristic person with an asset value or annual turnover over Two Million Rand), one must determine whether Section 14 is applicable.

It will not apply to transactions between juristic persons regardless of their annual turnover or asset value. Additionally, although not directly addressed as a requirement for its application, the subsections of Section 14 refer to “consumer agreements”, and accordingly will not apply to any agreements outside this ambit.

The CPA defines a consumer agreement as that between a supplier and a consumer other than a franchise agreement, and goes further to define both “supplier” and a “consumer”. The former definition simply reiterates the requirement of marketing the goods or services while the latter simply reiterates the requirements of being subject to the marketing in the ordinary course. Thus, the supplier can be seen as the consumer who rents their property (service delivery of a product) to the tenant (as the consumer).

The CPA’s equivalence of “transaction” as an “agreement”, read together with “at the time of the transaction” would imply that the agreement is either subject to the Act or not at the time of conclusion, and will remain as such notwithstanding any change in circumstances such as the tenant’s annual turnover.

Section 14’s clear exclusion where both parties are juristic persons may lead to the hasty and incorrect application where one of the parties is a natural person. This would be the correct application of the principle that expresses exclusion of one thing implies the inclusion of the other, had it not been for the requirement in Section 5. Crisply put, where the requirements of Section 14 are satisfied, one must still consider whether the CPA is applicable in the first instance (i.e. whether the consumer is a juristic person with an asset value or annual turnover greater than Two Million Rand).

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