Not Every Residential Lease Falls Under The Consumer Protection Act

What Els v Venter means for landlords and tenants

A recent Supreme Court of Appeal judgment is a useful reminder that not every residential lease is automatically governed by the Consumer Protection Act 68 of 2008 (CPA), and that a court cannot sidestep the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE) simply by labelling relief as an order to vacate.

In Els v Venter and Another, the SCA had to decide two important questions. First, did the CPA apply to a private residential lease concluded between individuals? Second, was the High Court’s order requiring the tenant to vacate the property effectively an eviction order, even though the court had not formally granted eviction relief under PIE?

The answer to both questions is important for private landlords, tenants, estate agents and anyone dealing with residential property transactions.

The background

The property owners had moved to Australia and rented out what had previously been their family home. Later, after deciding to settle abroad permanently, they agreed to a further lease with the tenant on the basis that they wanted to preserve the ability to sell the property. The second lease contained a clause allowing the landlords to terminate on three months’ written notice. The property was then sold and notice of termination was given.

The tenant argued that the lease fell under the CPA and could therefore not be terminated in this way unless there had been a material breach by him. The landlords approached the High Court for relief, including confirmation that the CPA did not apply and that the termination notice was valid. The High Court agreed but also ordered that the tenant vacate the property by a specified date.

On appeal, the SCA partly agreed and partly disagreed.

Does the CPA apply to every residential lease?

The SCA made it clear that the CPA does not apply to every lease simply because property is being rented for consideration. The key question is whether the lease was concluded in the ordinary course of business of the lessor.

The court worked through the statutory definitions of “transaction”, “service”, “rental”, “supplier” and “consumer” and emphasised that the Act requires more than a once-off or private arrangement. The lessor must, in substance, be in the business of letting property and the lease must form part of that ordinary commercial activity.

The court said that whether a lease is within the lessor’s ordinary course of business is an objective question that depends on the factual setting of the transaction. It is not enough that a lease exists. The issue is whether the lease was concluded as part of the supplier’s usual business operations.

Why the CPA did not apply in this case

The SCA found that the landlords were not in the business of letting property. They were private individuals who had rented out their family home after moving overseas and had later concluded a further lease in order to protect the asset pending its sale. This was not rental stock and it was not part of a business of continually marketing rental property.

For that reason, the tenant was not a “consumer” for purposes of the Act, the landlords were not “suppliers”, and the lease was not an agreement concluded in the ordinary course of business. The court therefore held that the tenant’s reliance on section 14 of the CPA was misplaced.

The SCA also noted that the second lease ran for 36 months, whereas the regulations to the CPA prescribe a maximum fixed-term consumer agreement period of 24 months unless specific requirements are met. That was another difficulty for the tenant’s argument.

Why the “vacate” order was still a problem

Although the SCA agreed that the CPA did not apply and that the lease had been validly terminated, it set aside the part of the High Court’s order directing the tenant to vacate the property by a certain date.

The reason was straightforward. The High Court had already found that the tenant was not yet in unlawful occupation and that there was no basis to evict him at that stage. Against that background, an order telling him to vacate by a specified date was, in substance, an eviction order.

The SCA said this was unsustainable for two reasons. First, PIE defines eviction broadly as depriving a person of occupation against their will. Second, such an order would cut across the powers of a court dealing with a proper PIE application, where the court must consider whether eviction is just and equitable and must determine fair dates for vacating and enforcement.

In other words, a court cannot avoid the PIE framework by calling the relief something else. If the practical effect is that the occupier must leave against their will, PIE is likely engaged.

What this means in practice

The judgment is useful because it clears up two assumptions that often cause confusion.

The first is the assumption that every residential tenant enjoys CPA protection. That is not correct. Where the lease is a genuinely private arrangement and not part of the lessor’s ordinary course of business, the CPA may well fall away.

The second is the assumption that once a lease has been validly cancelled, the occupier can simply be ordered to leave without a PIE process. That is also too simplistic. Even where the contractual position favours the landlord, the moment the matter becomes one of removing an occupier from residential property against their will, PIE must be considered properly.

Practical Implications

For private landlords, this judgment is helpful because it confirms that a once-off lease of a family home or privately held property will not necessarily be treated like a consumer-facing rental business under the CPA. But it is equally a warning that valid termination of a lease does not automatically entitle an owner to relief that effectively amounts to eviction without following the right statutory path.

For tenants, the judgment is a reminder that the CPA is not a catch-all shield in every lease dispute. The factual setting matters, especially where the lessor is not operating a rental business.

For property professionals, the case is especially useful when advising on sales of tenanted residential property, termination clauses and the distinction between a contractual right to cancel and the separate legal process required to secure vacant occupation.

The message from Els v Venter is clear. Not every lease is a consumer lease, and not every order to vacate escapes scrutiny under PIE.

The underlying agreement still matters. But so does the legal route chosen to enforce it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.