CPA gives landlords few rights

2011-01-29 00:00

The new Consumer Protection Act (CPA), which comes into effect on April 1, could cripple the residential letting industry in South Africa.

Landlords and potential buy-to-let investors must familiarise themselves with the provisions of the Act and the possible implications, warns Lew Geffen Sotheby’s International Realty.

“In its current format, the CPA could prove disastrous for the rentals market because it is so restrictive of the rights of suppliers, or landlords in the case of the rental industry, that it could scare off droves of property owners from renting out their properties.

Currently most lease agreements are for a fixed period and the tenant cannot terminate the lease early. The CPA, however, allows the tenant to terminate the lease with 20 working days’ notice. A landlord can only terminate the lease if there has been a “material breach”, and after affording the tenant an opportunity to remedy the breach.

Jeremy Wagner, rentals manager at Lew Geffen Sotheby’s International Realty, says these are just two of the ways in which the new Act will reshape the way in which the rentals industry conducts itself.

“The Act offers landlords very little recourse against tenants and virtually no way out of leases.”

Wagner expects the real estate industry will make an application to Trade and Industry for partial, or even total, exemption from the more onerous provisions of the Act.

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