An Opinion of the legality of certain clauses in terms of the Consumer Protection Act Lizell Lombard
Section 51(1)(a) of the CPA states that a supplier must not make an agreement subject to any term or condition if its general purpose or effect is to defeat the purposes of the Act, waive or deprive a consumer of a right in terms of the act, avoid a supplier’s obligation in terms of the act.
In terms hereof, in my opinion, the following clauses of the current lease agreement used by Kovsies Private Accommodation CC are illegal clauses in terms of the act, and need to be revised in order to ensure compliance.
• Clause 1.1, p 1 & Clause 21 (Bottom of page 2)
• Domicilium address
• The CPA requires that the Plain Language principle be used in all written agreements. • Although not an illegal clause, it would be prudent to use the English terms instead of Latin in these clauses, or, if the Latin is used, to explain it in the text in plain language.
• Clause 2.1, p 1
• …Should the owner, however, wish to withdraw the property during the lease, the tenant will be notified in writing one (1) month beforehand… • CPA Section 14 – If a consumer agreement is for a fixed term, …the supplier may cancel the agreement 20 business days after giving written notice to the consumer. • It follows that, should a Landlord wish to cancel the agreement, 20 days notice would have to be given to the tenant. • It might still be advisable though, as the 20 days would, in terms of the act be business days, to give a calendar month notice.
• Clause 2.3, p 1
• That, if the accommodation cannot be taken up, for whatever reason, …will be informed in writing, failing which the accommodation deposit will be forfeited in full. • CPA Section 14(2)(i)(bb) – If a consumer agreement is for a fixed term…the consumer may cancel the agreement…at any other time, by giving the supplier 2- business days’ notice in writing… • CPA Section 14(3) – The tenant remains liable for all amounts owed up to date of cancellation. • Should the tenant wish to cancel the agreement before taking occupation of the premises, the tenant has to give 20 business days notice to the landlord / its agent. • Should the first month’s rent become due and payable during the 20 days notice period, the tenant will be liable for the payment of the first month’s rent.
• Clause 3.5 and 3.6, p 1, and Clause 5, p 2
• That I shall be held accountable for the full term of the contract and a new contract entered into after the expiry date • …the lessee will stay responsible for the monthly rental for the remainder of the lease… • CPA Section 14(2)(i)(bb) – If a consumer agreement is for a fixed term…the consumer may cancel the agreement…at any other time, by giving the supplier 2- business days’ notice in writing… • CPA Section 14(3)(b)(i) – Upon cancellation of a consumer agreement…the supplier may impose a reasonable cancellation penalty…
• The tenant may, at any time during the duration of the lease, cancel the agreement by giving the Landlord / its agent 20 business days’ notice. • The act provides that a penalty may be imposed in these circumstances. • The penalty may not have the effect of negating the tenant’s right to cancel the lease. • The penalty may therefore not be equal to the remainder of the rent due until the expiry of the lease. • The penalty has to be reasonable, and the following factors may be taken into account to determine the penalty: o The nature of the service provided
o The length of notice of cancellation given
o The reasonable potential of the landlord to obtain a replacement o The general practice of the relevant industry.
• It is submitted that a possible reasonable penalty would be between 10 and 20% of the rent that is still due.
• Clause 3.8 and 4.2, p 1,...