So says Wayne Albutt, national manager of Rawson Rentals, who notes that the CPA is deemed to apply to the supplier (landlord) and consumer (tenant) relationship in terms of a property lease being a fixed term agreement.
?However,? he says, ?there are many landlords and agents who have not actually read the CPA carefully and/or do not understand its relevance. They just have the perception that their rights have been totally overruled, with the tenant now able to do more or less what he likes, which is not the case.?
In terms of the CPA, the tenant does have the right to cancel the lease even though he may have signed an agreement to occupy the premises for a specified fixed period (six months or a year, for exmaple). Furthermore the tenant can do this without giving any legitimate reason (such as the loss of a job or sickness).
?But it is very important to note that tenants who decide to do this are now obliged to give the landlord and/or his agent 20 business days? notice,? says Albutt. ?In addition, the landlord is empowered to charge a ?reasonable? cancellation penalty.? The term ?reasonable,? he agrees, has not been fully defined but cases already taken to the Rental Housing Tribunal indicate that it can cover a fairly comprehensive range of costs, as long as these are reasonable and can be proven.
?The landlord is thus fully entitled to recover all reasonable costs and losses incurred through the tenant exercising his right, as per the CPA, to terminate a lease before it has run its course. ?This can include the landlord?s costs of re-advertising the property, in order to replace the tenant, and if the landlord cannot replace the tenant at the same time as the current tenant moves out, the landlord is entitled to charge the tenant for lost rental. The landlord can also claim the full outstanding fees that are due to the agent, if applicable.?
In short then, the new provisions of the CPA do adequately protect the landlord from significant loss and the change brought about by the Act is not as radical as many people have been led to believe. ?But it is worth noting that the landlord must be able to show that he has done everything reasonably possible to minimise his costs and losses. And if he does not re-rent the property on the same or more favourable terms and conditions as stated in the original lease, then he will lose his right to claim reasonable penalties if the tenant disputes the costs and takes the matter up with the Rental Housing Tribunal.?
Meanwhile, Albutt says, landlords should disabuse themselves of the idea that any increase in rates, taxes or levies can be passed on to their existing tenants at any time. ?This is only legal if it has been stated in the original lease signed by both parties and can only become applicable during the second calendar year of a lease exceeding 12 months. It cannot be made applicable to leases on terms less than 12 months.?