In terms of the new Consumer Protection Act it may be possible for a tenant to walk out of a property that he or she can no longer afford even though there might be a lease agreement in place.

The Consumer Protection Act could be used by defaulting tenants to cancel a lease and walk away from a property they can no longer afford to rent.

Michelle Dickens, managing director of TPN Credit Bureau says that the Act has changed the nature of traditional property rentals and the tenant now has more fundamental rights than ever before.

Because of this, she says, landlords and estate agents must make sure that the existing lease agreements comply with the stipulations of the Consumer Protection Act.

She says the final regulations governing rentals were published in April and “took the industry by surprise”. Dickens says that as a result of this the property industry has been in a state of flux as neither the landlords nor the estate agents were prepared for the final regulations as contained in the Act.

She says that TPN has spent months with leading property attorney Marlon Shevelew interpreting the Act and regulations and how these would affect the property industry and the existing or future tenants.

Dickens says the property sector still does not know exactly where it stands regarding a tenant’s rights and is waiting for clarity from the Department of Trade and Industry on how lease agreements must be amended to comply with the Act.

According to various analysts, property companies and attorneys the new Consumer Protection Act is ambiguous on lease agreements and they fear that this ambiguity could be used to cancel a rental agreement.

The South African Property Owners’ Association has urged property owners, rental agents and brokers to now “err on the side of caution” when it comes to lease agreements until the new provisions of the Consumer Protection Act have been resolved.

Preston Gaddy, executive head of Broll Property Group, a specialised management company, says that in terms of the Act defaulting tenants could simply walk away from a property that they could no longer afford to rent.

The Act had also introduced some protection for indebted consumers who are forced to sell assets to pay debts through a sale in execution and this will probably affect thousands of residential and commercial properties that are being auctioned to settle outstanding bonds.

Readers' Comments Have a comment about this article? Email us now.

Another ”expert” talking rubbish and frightening everybody (either out of ignorance or to get a cut out it somewhere as a consultant)!
Most leases are between private individuals and in terms of the Consumer Protection Act are not covered by it.  If the Landlord/Lessor is not renting as part of his normal business activity then the Consumer Protection Act is not applicable. It is as simple as that!! Will these idiots please read the Act correctly and stop giving disinformation! - Tony Penfold