Consumer Protection Act: part 4

Property Transaction Kit (PTK): in the Property Magazine
June 27, 2011
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June 30, 2011

CONSUMER PROTECTION ACT AND IMMOVABLE PROPERTY LEASES: Dispelling a myth

 There has recently been various discussions surrounding the applicability of the of the Consumer Protection Act (CPA) to immovable property leases.

 After analyzing the CPA, especially the definition of “services”, there are many that are of the view that the CPA is not applicable to immovable property leases.

 “services” under the CPA is defined as including:

  • 1 (f) a right of occupancy of, or power or privilege over or in connection with, any land or other immovable property, other than in terms of a rental;

By relying solely on the above provision, those who are in favour of the above view argue that the “…act does not include a right of occupancy of immovable property in terms of a rental.” In other words that “services” as provided for in the CPA does not include a lease.

However, the preceeding provision of 1 (f), in providing for what “services” in terms of the CPA means also includes the following:

  • 1(e) (v)-  access to or use of any premises or other property in terms of a rental

Surely, even though it has been argued that currently the CPA is absurd in its application to leases, the above two provisions ought not to be read in isolation of one another, but rather should be read together when determining what the definition of “services” entails and therefore whether the CPA is applicable to immovable property leases?

We submit that since 1 (e) (v) already makes provision for the use of premises/property in terms of a rental (which we would argue covers the leases of immovable property), 1 (f) therefore makes provision for the occupancy of immovable property for other purposes OTHER THEN rental.

It is due to the above that we, like many others, such as Ms Elizabeth de Stadler of the Department of Private Law at UCT, argue that the CPA does in fact apply to immovable property leases, as per the definition of “services” stipulated in the CPA.

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