What effect has the Consumer Protection Act 68 of 2008 had on the cancellation of a lease agreement?
Although not specifically defined in the Consumer Protection Act, the landlord and tenant relationship in respect of residential leases falls within the definition of supplier and consumer.
Section 14 of the Act deals with the expiry and renewal of fixed-term agreements (lease agreements) and states that the consumer (tenant) may cancel the fixed-term agreement upon expiry of its fixed term without penalty or any charge or at any time by giving 20 business days’ notice in writing.
The supplier to a fixed term agreement (landlord) may also cancel the agreement 20 business days after giving written notice to the consumer of a material failure by the consumer to comply with the agreement, unless the consumer has rectified the failure in that time.
If neither the tenant nor the landlord prematurely terminates a lease agreement and the agreement runs its course, it will be automatically continued on a month to month basis unless the tenant expressly directs the landlord to terminate the agreement on the expiry date or agrees to a renewal of the lease agreement for another fixed term.
If the tenant prematurely cancels the agreement, he/she remains liable to the landlord for any amounts owed to the landlord in terms of that agreement up to the date of cancellation and the landlord may impose a reasonable cancellation penalty.