A recent judgment of the Supreme Court of Appeal in Els v Venter and Another has provided important clarity on whether a residential lease of a private family home falls within the protective scope of the Consumer Protection Act 68 of 2008 (CPA). The case required the Court to determine two key issues:
- whether a long-term residential lease qualifies as a consumer agreement concluded in the ordinary course of business, and
- whether the High Court was correct in ordering the tenant to vacate the property without following the statutory requirements of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE).
Background to the Dispute
Mr and Mrs Venter owned a family home in Stellenbosch which they intended to leave vacant while emigrating to Australia. To safeguard the property, they leased the home to Mr Els in terms of two successive three-year lease agreements. The dispute related specifically to the second agreement, which contained a clause allowing the owners to terminate on three months’ written notice.
In 2023 the owners resolved to sell the property. They informed the tenant that the second lease would continue to apply and that they intended to enforce the termination clause. After the property was sold in December 2023, they issued a formal three-month notice. The tenant initially accepted the notice, but later claimed that the lease was a fixed-term consumer agreement regulated by the CPA. He argued that, unless he had breached the contract, the owners were prohibited from terminating the lease early.
The owners launched urgent proceedings in the High Court seeking confirmation that the CPA did not apply, that the termination clause was enforceable, and that the tenant should vacate. The High Court found in their favour on all aspects. On appeal, the SCA agreed that the CPA had no application and that the termination was contractually valid. However, the SCA overturned the eviction order because the High Court had not applied PIE.
Does the CPA Regulate a Residential Lease of a Family Home?
Central to the Court’s reasoning was the definition of a “transaction” and “rental” in the CPA, which both require that the supplier must be providing goods or services “in the ordinary course of business”. The Act is aimed at suppliers who market their services to consumers as part of a commercial operation.
The Court highlighted that simply receiving rental income is not enough to make someone a “supplier” under the CPA. What matters is whether the lessor conducts an ongoing business of letting properties, with regular marketing and supply of rental services.
On the facts, the owners were private individuals temporarily letting out their family home as a transitional measure before emigrating and selling the property. They were not running a rental enterprise or routinely offering residential accommodation to the public. The lease was a once-off arrangement to protect their property during a period of change, not a commercial leasing activity. As a result, the CPA did not apply to the second lease agreement.
This interpretation aligns with the purpose of the CPA, which is to regulate commercial dealings and safeguard vulnerable consumers in the marketplace, rather than to intervene in private, arm’s-length contractual arrangements between individuals of equal bargaining power.
Fixed-Term Agreements and the Tenant’s Reliance on Section 14
The tenant attempted to rely on section 14 of the CPA, which regulates the cancellation of fixed-term consumer agreements. The Court rejected this argument for two reasons:
- The lease was not a “consumer agreement” governed by the CPA.
- Even if the CPA did apply, the 36-month term exceeded the 24-month default limit allowed by the regulations, and there was no evidence that such an extended term offered any financial advantage to the tenant.
The tenant therefore could not rely on the CPA to invalidate the termination clause voluntarily agreed upon by the parties.
The Importance of the “Ordinary Course of Business” Test
The ruling confirms that determining whether the CPA applies does not depend on the subjective intentions of the parties but on whether the activity forms part of the lessor’s normal business. A single or exceptional lease of a private home, particularly where the owners are relocating or selling, does not amount to property-rental business operations.
Why the Eviction Order Was Set Aside
Although the termination of the lease was valid, the SCA held that the High Court erred by granting an order compelling the tenant to vacate on a fixed date. Such an order amounts to an eviction and must comply with PIE, which provides important procedural and substantive protections for residential occupants.
PIE requires the court hearing the eviction to consider all the relevant circumstances, assess whether eviction is “just and equitable”, and determine appropriate timeframes for vacating the property. These steps were not followed, and the eviction order was therefore unlawful and invalid.
What the Judgment Means Going Forward
The decision draws clear boundaries around the application of the CPA to residential leases. It confirms that:
- the CPA regulates commercial leasing activity, not private one-off leases of family homes
- the termination provisions of a residential lease between private individuals remain governed by contract law where the CPA does not apply
- eviction from a home must always comply with PIE, even if the lease has been lawfully terminated
In essence, the ruling reinforces certainty in private leasing arrangements while preserving the constitutional and statutory safeguards that protect occupants from unlawful eviction.
