Having a non-paying tenant vacate the leased premises sooner rather than later is the hope of every landlord. While the landlord might be impatient and not want to afford the tenant 20 business days to remedy its breach; a 20-business day delay is nothing in comparison to the delay that may be caused should one fail to follow the legislative timelines and must restart legal proceedings from scratch. Below we explore the timelines envisaged in s 14(2)(b)(ii) of the Consumer Protection Act 68 of 2008 (CPA) and how the courts have applied this notice period.
The supplier (landlord) may cancel the agreement 20 business days after giving written notice to the consumer (tenant) of a material failure (s 14(2)(b)(ii) of the CPA) where the consumer fails or refuses to remedy the breach within the given period. The landlord’s point of departure is to issue a notice of breach and letter of demand, affording the tenant 20 business days to cure their breach, failing which the landlord may issue a notice of cancellation or demand specific performance thereafter.
To summarise the facts of Centpret Properties (Pty) Ltd v Shandukane [2023] JOL 61090 (GJ); the lease agreement stipulated that the landlord may issue a notice of breach and letter of demand (notice), stating that the material breach must be cured in seven days. Failing which, the landlord may issue a letter of cancellation, terminating the lease agreement.
In para 11, the judge describes the right afforded to the tenant, whereby the tenant may reject the seven days stipulated in the lease agreement to cure the breach and is entitled to request the 20 business days as prescribed in the CPA. The tenant may then make use of the full 20 days to cure the breach.
However, the tenant may not treat the notice as defective and refuse to comply with the landlord’s instruction to remedy the material breach. When the notice is received by the tenant, despite the specified time frame of seven days, the legislative notice period starts running. If the material breach is not cured within 20 days, the landlord may exercise their right to cancel the lease after the expiry of the 20-business day period.
If the landlord cancels after seven days his actions may constitute a repudiation.
In Balwin Rental (Pty) Limited v Mathaba and Another [2021] JOL 53718 (GJ), the landlord gave the tenants seven business days to remedy their breach of non-payment. The tenant argued that the notice did not satisfy s 14(2)(b)(ii) of the CPA which affords 20 business days for the defaulting party to remedy its breach.
The judge found that a notice allowing the tenant seven days to remedy their breach is sufficient under the CPA, provided that the landlord waits at least 20 business days before cancelling the lease (para 22).
The notice was delivered in December 2019; however, the lease was subsequently cancelled in August 2020. The defaulting party had made three payments in January 2020, April 2020, and May 2020, but did not satisfy the outstanding amounts owed to the landlord and failed to satisfy the demand timeously.
The court found that the landlord’s delay in cancelling did not constitute a waiver of his right to cancel the lease agreement. The landlord’s cancellation notice delivered in August 2020, after the 20 business days to remedy the breach in December 2019 had expired, despite an eight-month delay, is sufficient and valid.
The tenants in Transcend Residential Property Fund Ltd v Mati and Others 2018 (4) SA 515 (WCC) made partial payment towards the outstanding debt after the seven days stipulated within the notice – but within the legislated 20 business days. However, the tenants failed to satisfy the debt in full within the 20 business days. The landlord was within its right to issue a letter of cancellation and accordingly terminate the contract.
The judge explained that the landlord is not obliged to inform the tenant of the legislative 20 business days to cure their default. If the notice of cancellation was delivered after the expiry of the 20 business days as per s 14 of the CPA, the supplier (landlord) has complied with s 14 of the CPA (para 56).
The Gauteng Local Division High Court in Johannesburg (Centpret Properties and Balwin Rental) and the Western Cape Division High Court in Cape Town (Transcend Residential Property Fund) agree that the seven days allotted to cure a material breach is not unlawful. The landlord is not saddled with the responsibility of advising their tenants as to the legislative timeline to cure their breach. In contrast, should the tenant receive a notice indicating seven days to remedy their breach; the tenant may invoke their right under s 14(2)(b)(ii) of the CPA to remedy their default within 20 days. Balwin Rental makes it clear that the landlord’s right to cancellation arises after the 20 business days has expired and the landlord may exercise that right any reasonable time thereafter.
To conclude, if you intend to institute proceedings against your defaulting tenant, you must afford the tenant 20 business days before issuing a notice of cancellation.
Karlynne Josephus LLB (UWC) is a candidate legal practitioner and Chelsea Lee Swanepoel LLB LLM (Stell) is a legal practitioner at Webb Attorneys Inc in Cape Town.
This article was first published in De Rebus in 2024 (December) DR 23.
