Els v Venter and Another

The respondents, a married couple, owned a property in Stellenbosch which was their primary residence before relocating to Australia in 2018. They decided to let the property rather than sell it immediately. They concluded a three-year lease with the appellant (first lease) from 1 December 2020 to 31 December 2023. In February 2023, the appellant requested an extension. The respondents had by then decided to settle in Australia permanently and sell the property. They agreed to a second three-year lease from 1 January 2024 to 31 December 2026, but on condition that the respondents could terminate with three months' written notice (clause 29.2). The appellant agreed to this term. The property was sold on 19 December 2023 with vacant possession required by 1 April 2024. On 21 December 2023, the respondents served a termination notice requiring the appellant to vacate by 31 March 2024. Initially, the appellant acknowledged their right to terminate but later, through his attorneys on 28 January 2024, claimed the lease fell within the Consumer Protection Act and could only be terminated for material breach.

• Whether a residential lease agreement concluded between private individuals constitutes an agreement for consideration 'in the ordinary course of business' as contemplated in the Consumer Protection Act 68 of 2008
• Whether the appellant qualified as a 'consumer' within the meaning of the Act
• Whether the respondents qualified as 'suppliers' conducting business as contemplated in the Act
• Whether the second lease constituted a 'fixed-term agreement' under section 14 of the Act
• Whether the High Court order directing the appellant to vacate the property constituted an eviction order requiring compliance with the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998

1. The appeal succeeded in part. 2. Paragraph 49(iv) of the High Court's order was set aside. 3. Save as aforesaid, the appeal was dismissed with costs on the scale as between attorney and own client.

The Consumer Protection Act 68 of 2008 only applies to residential lease agreements where: (1) the lessor is a 'supplier' who markets rental services in the ordinary course of business; (2) 'ordinary course of business' means the continual marketing of services as part of normal business operations, not once-off or isolated transactions; (3) the lessee is a 'consumer' to whom such services are marketed in the ordinary course of the supplier's business; and (4) a private individual who lets their own residential property pending sale is not conducting business in the ordinary course and therefore the Act does not apply to such arrangements. Further, a court order directing a tenant to vacate property by a specified date constitutes an eviction order and must comply with the requirements of the PIE Act, including consideration of whether eviction is just and equitable in all the circumstances.

The Court observed that the appellant's reliance on the Consumer Protection Act was 'opportunistic and contrived' given that he was the Chief Group Economist at Old Mutual, freely concluded the lease in an equal bargaining position, was well aware of the termination clause, and had initially acknowledged the respondents' right to terminate. The Court also noted that even if the Act applied, the 36-month term of the second lease exceeded the prescribed 24-month maximum for fixed-term consumer agreements under Regulation 5(1), which would in any event have been destructive of the appellant's reliance on section 14(2)(b). The Court rejected as 'pure speculation' the appellant's submission that it was reasonable to infer the property had been let to other parties between 2018 and 2020, noting this inference had no foundation in evidence and was raised for the first time in argument.

This case provides important guidance on the application of the Consumer Protection Act 68 of 2008 to residential lease agreements. It clarifies that the Act does not apply to all rental agreements but only to those concluded by lessors who are in the business of continually marketing rental services to consumers. The judgment distinguishes between commercial landlords engaged in the rental business and private individuals letting their own property. It reinforces that the Act's protective provisions are aimed at vulnerable consumers in unequal bargaining positions, not sophisticated parties in arms-length transactions. The case also confirms that courts cannot make orders that effectively constitute evictions without complying with the procedural and substantive requirements of the PIE Act, even when declaring the legal position following termination of a lease.