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December 6, 2020

Consumer Protection Act And Commercial Lease Agreements

Filed under: Uncategorized — ירון @ 4:35 am

Section 14 – In addition, between 40 and 80 days before the end of the contract, the supplier is required to inform the consumer of the impending expiry of the contract and any significant changes that apply in the event of a renewal of the contract. It should of course be stressed that consumer protection through the CPA does not apply to all consumers. For example, the provisions of the CPA do not apply to transactions where the consumer is a legal entity, i.e. a corporation other than a natural person whose assets or annual turnover are R2 million or more at the time of the transaction. Presents a confirmation of a fact by the consumer owner are now also required to notify in writing the termination of the lease, if this lease is nearing its end, although the term of the lease is clearly indicated in the lease agreement. Such a notification should not be communicated to the tenant for more than 80 working days and no less than 40 working days before the lease expires. In addition, this section provides that a tenant can terminate a tenancy agreement by reserving only 20 days for the landlord. Regardless of the above, a tenant is liable by the lessor for all amounts liable up to the termination date. The landlord may also impose an appropriate cancellation fine on the tenant. In the event of termination, the tenant is responsible to the landlord for all the sums due under the tenancy agreement concluded until the termination date. The lessor also has the right to inflate an appropriate withdrawal sentence to the tenant. In determining such a cancellation penalty, intrinsic factors such as the expected duration of the lease and/or the potential of the lessor to secure another tenant for the premises must be taken into account.

However, the uncertainty created by this provision has the potential to have a negative effect on landlords who wish to use the leases concluded as a form of security. In addition, any action or omission by a lessor or commercial broker in the event of non-compliance with the provisions of the CPA during the conclusion of leases on behalf of landlords could lead to the owners involved being an indirect liability with these real estate agents or brokers, both collectively and repeatedly. “The lessor should accept the tenant`s termination, since Section 14 (2) (b) of the CPA establishes that, despite the contrary provisions of the consumer contract, a tenant can terminate a tenancy agreement with a 20-day working day to the lessor.

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