30. CPA – Consumer Protection Act

  1. Estate Agents

This Act came into being on the 1st April 2011 and has bearing on property transactions. One of the key definitions in the Act is that of “supplier”. Estate Agents are suppliers and their services fall within the provisions of the Act.

Estate Agents are not responsible for any ‘goods’ relating to their service. As Estate Agents we offer a service relating to the marketing of properties and the subsequent conclusion of an offer to purchase. Thereafter, the contract is a legal and binding agreement between the Seller and the Purchaser who are responsible for the fulfilment of the terms and conditions thereof.

  1. Sellers

Most sellers are NOT suppliers.

Contrary to many interpretations of the Act, estate agents and conveyancers are not responsible for the condition of the properties they are selling or transferring, only their services.

consumer is someone who is dealing with a supplier of goods ‘in the ordinary course of the suppliers’ business.’ This means that ALL sellers of properties are excluded from the definitions unless they are selling properties in the normal course of their property business.

  1. Marketing

An agent may not, by word or conduct, ‘directly or indirectly express or imply a false, misleading or deceptive representation concerning a material fact to a consumer.’ In terms of the agent’s service, the buyer enjoys the protection offered to consumers.

Section 44 says that it is false, misleading, or deceptive to say of any property that it has ‘characteristics that it does not have such as special facilities, amenities or natural features, or that it is near to them when it isn’t. Be very careful with your advertising and marketing.

Many provisions in the Act affect direct marketing. This is defined as approaching someone personally, by mailings, or by any form of electronic communication (such as emails, fax, SMSs, etc.) to promote any goods or services in the normal course of business.

  1. Landlords

A normal landlord renting out one or more properties is not a supplier in terms of the Act and the tenant does not enjoy the rights of a consumer against him. Section 14 deals with any consumer agreement that covers a fixed term. The Act defines an agreement as an agreement between two parties, which would include lease agreements, however, but the definition of a consumer only refers to people dealing with suppliers who are acting in ‘the normal course of their business.’

However, the Act clearly directs our courts to interpret its provisions broadly and in terms of covering the interests of consumers generally, so it would in that sense cover leases as well.

Consumer agreements may not be for longer than 24 months (Regulation 5.1) and without any justification or cause the consumer may cancel the agreement at any time by giving 20 business days’ notice. The Landlord has the same right in return, but only if the tenant materially breaches the contract and fails to remedy this within the 20-day period.

No company, trust, or close corporation is protected by the provisions of Section 14.

Rental agencies are considered suppliers in terms of their service to both landlords and tenants. The provisions of the agreement must be explained to both parties. Written records of all verbal transactions reached through the services of an agent must be kept by the agent and supplied to the parties when required to do so. (Section 26, 50)

  1. Other obligations

Section 22 provides that all documents be in plain language so that consumers can readily understand them. Sale agreements must be in simple language.

An agent calling on a client at his place of residence or business must be prepared to provide proof of identification.

Annexure 28 – CPA Act

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