Tag Archives: Consumer Protection Act

The Consumer Protection Act and your rights

The South African Consumer Protection Act, No. 68 of 2008 was signed on 24 April 2009 and the purpose of the Act is to protect the interests of all consumers, ensure accessible, transparent and efficient redress for consumers who are subjected to abuse or exploitation in the marketplace and also to give effect to internationally recognised consumer rights. The Consumer Protection Act define a consumer as any person to whom goods and services are marketed, who is a user of the supplier’s goods, enters into a transaction with the supplier or service provider of any services and products.

If you have a complaint and the supplier won’t resolve it for you, you can complain to your provincial Consumer Affairs Office or the National Consumer Commission as well as other bodies.

The Consumer Protection Act:

  1. ensures that you are treated as an equal and protects you against discrimination in economic transactions.
  2. protects your privacy and ensures fair practice when goods or services are marketed to you.
  3. means you have the right to choose the agreements you enter into and continue with.
  4. gives you the right to the disclosure of information so that you can make informed choices.
  5. protects you against fraud and other dishonest practices.
  6. makes sure that you don’t have to agree to unfair conditions in the small print.
  7. allows you to return things which don’t work properly.
  8. protects you against goods and services that can harm you.
  9. makes suppliers compensate you if they have caused you a loss.
  10. ensures that you are educated on consumer issues and the results of your choices.
  11. makes it possible for you to form groups to promote your interests.

The Consumer Protection Act can help consumers in dealings which involve advertising, marketing, promoting, selling, supplying and delivering or repairing of goods and services in South Africa.

You are a consumer if you have made a deal with a supplier, for example, when you pay for goods or services, or if goods or services are marketed to you.

Goods include things, but also information and data and the licence to use it. Services include receiving advice or training you pay for, transport of people or goods, transactions at restaurants and hotels, entertainment and access to electronic communication. Employment relationships, credit agreements, deals between two private consumers and goods or services supplied to government do not fall under the Consumer Protection Act.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Cancelling a lease agreement early

If you want to end your contract early, this can only be done “in situations where the Consumer Protection Act or Rental Housing Act apply” – or if there’s a clause in the contract that allows for early cancellation, or if both parties agree to it.

If, on the other hand, one of the parties wants to cancel because the other is in breach of the contract, then certain notice periods come into effect – the first of which being, of course, that the aggrieved party is required to “give written notice for the breach to be remedied. Failure to remedy the breach in the stipulated time period, will entitle the innocent party to cancel the lease and (where relevant) claim damages suffered from the offending party.”

A tenant has the RIGHT to cancel a lease agreement, be it in the 1st month, 4th month or second-to-last month of the lease agreement. He cannot be ‘punished’ for doing this and the cancellation does not constitute a breach of the lease agreement.

 What must an agent do if a tenant decides to cancel?

  1. Obtain the cancellation in writing from the tenant.
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  2. Ensure the cancellation gives the requisite 20 business days’ notice.
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  3. Charge rental until the end of the 20 business days (even if this is not a full month’s rental).
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  4. Log on to TPN and end the lease as at the end of the 20 business days.
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  5. Keep in mind the lease now ends as at the end of that 20 business days.
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  6. Should the tenant remains in the premises a new lease MUST be signed as once cancelled, a lease cannot be revived at law. If you fail to do this, you essentially have no long-term lease in place.
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  7. Begin advertising the property immediately- the onus is on the agent/landlord to find a replacement.
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  8. Keep all invoices from the advertising as this is one of the costs you may pass along to the tenant in terms of a ‘reasonable cancellation penalty’.

 What can an agent charge the tenant that cancels early?

The idea behind this reasonable cancellation penalty is not to penalise the tenant, but to recover any actual loss suffered by the landlord as a result of the cancellation. The following cost could be applicable:

  1. Credit check costs for any prospective replacement tenants (even those who are not accepted);
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  2. Advertising costs (only the actual amounts on the invoices);
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  3. Rental – the exact number of days that the unit remains vacant after the tenant vacates.

It is important to keep in mind that all calculations of the penalty can only be made once a replacement tenant has been found. It must also be kept in mind that where a tenant cancels, for example, in month 10 or 11 of a 12-month lease, you cannot charge the tenant the full remainder of the lease as this would negate the cancellation. The principles behind cancellation penalties lie in our law of undue enrichment. A landlord/agent cannot make a financial gain or benefit off of a tenant’s cancellation.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

The Sale agreement: Can I use the cooling-off period if I change my mind?

The Consumer Protection Act has some serious implications for agents selling property – for one, a disgruntled purchaser can get out of a sale agreement within 5 days of signing it.

Section 16 of the Consumer Protection Act states as follows:

“A consumer may rescind a transaction resulting from any direct marketing without reason or penalty, by notice to the supplier in writing …, within five business days after the later of the date on which

  1. The transaction or agreement was concluded; or
  2. The goods that were the subject of the transaction were delivered to the consumer.”

However, the CPAs Cooling-Off Period will not help you when you change your mind. People are under the misconception that the CPA protects them, by providing the “cooling-off period”.

The Alienation of Land Act

In terms of The Alienation of Land Act, residential property transactions of R 250 000.00 or less are subject to a “cooling-off” period of five working days, calculated from the date of signature of the Offer to Purchase. It does not apply to residential properties sold for more than R 250 000.00. This provision remains in place and is not affected by the CPA.

A Purchaser who purchases a property, as a result of direct marketing, has the right to cancel the sale within five business days – the “cooling-off” period. This applies only to sales that result from direct marketing.

Direct marketing in terms of the Act includes to “approach” a person (i) in person, (ii) by mail or (iii) by electronic communication (this includes email and sms) for the purpose of promoting or offering to supply goods or services to the person.

The “cooling-off” period does not apply to sales that result from any other form of marketing such as any purchase made by a client that the agent is already working with or conventional print advertising or show houses.

The cooling-off period creates rights for the consumer buying property while regulating closely how suppliers or estate agents operate. Estate agencies and property professionals need to be aware of the implications and prepare for changes in the way they will interact with property buyers and sellers in the future.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Reference list:

  • Anderson, AM. Dodd, A. Roos, MC. 2012. “Everyone’s Guide to South African Law. Third Edition”. Zebra Press.
  • The Estate Agency Affairs Board. “Purchaser’s Cooling-Off Right: Guidelines for Estate Agents”. [online] Available at: https://www.eaab.org.za/ [Accessed 31/05/2016].
  • http://www.privateproperty.co.za/

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)