Introduction
For several years, landlords, tenants and rental agents have faced uncertainty regarding the circumstances in which the Consumer Protection Act 68 of 2008 (CPA) applies to residential lease agreements.
The Supreme Court of Appeal’s judgment in Els v Venter and Another 2026 (3) SA 366 (SCA) has provided much-needed clarity on this issue. The court examined whether a residential lease agreement concluded between private individuals fell within the ambit of the CPA, with particular emphasis on the meaning of the phrase “ordinary course of business”.
The judgment offers important guidance on the distinction between commercial and private leases and clarifies when landlords and tenants may invoke the protections afforded by the CPA.
Applicability of the Consumer Protection Act to Residential Leases
The CPA regulates transactions involving the supply of goods and services, including the residential lease agreements if such transactions take place in the landlord’s ordinary course of business.
Section 1 of the CPA defines a “service” to include access to premises under a rental agreement and a “supplier” as a person who markets goods or services. However, the Act is only of application to transactions concluded as part of a business or commercial enterprise – i.e. in the supplier’s “ordinary course of business”.
In Els v Venter, the Supreme Court of Appeal confirmed that the CPA applies only where a lease forms part of a continuing commercial activity or marketing operation conducted for consideration. Where a private individual rents their property on a temporary or once-off basis, without carrying on the business of property letting, the lease will generally fall outside the scope of the CPA.
This interpretation is consistent with the purpose of the legislation, namely, to regulate commercial transactions and protect consumers engaging with suppliers in the marketplace.
The Meaning of “Ordinary Course of Business”
A central issue in the judgment was the interpretation of the phrase “ordinary course of business”.
The court adopted an objective approach, focusing on whether the lease formed part of the lessor’s regular business activities. The enquiry is not determined solely by whether the landlord receives rental income, but rather by whether the letting of property constitutes a business enterprise conducted on an ongoing basis.
In this matter, the respondents were private homeowners who rented out their family home while temporarily relocating overseas. The court found that they were not engaged in the business of leasing properties for profit and that the letting arrangement was a private and isolated transaction.
As a result, the lease agreement was held not to have been concluded in the ordinary course of business and therefore did not fall within the ambit of the CPA.
Implications for Landlords and Tenants
The judgment underscores the importance of distinguishing between commercial landlords and private individuals who let property on an occasional basis.
Landlords who operate rental properties as part of a business enterprise remain subject to the CPA and must comply with its provisions, including those relating to fixed-term agreements, consumer rights and cancellation provisions.
By contrast, private individuals who conclude once-off or temporary lease agreements outside the context of a business operation are not bound by the CPA. Such parties enjoy greater contractual freedom and may regulate their respective rights and obligations through the terms of the lease agreement itself, subject to the ordinary principles of contract law.
The court also reiterated that the CPA’s purpose is to protect consumers who may be vulnerable in their dealings with commercial suppliers. These considerations were not present in Els v Venter. The tenant was well informed, negotiated freely and voluntarily agreed to the terms of the lease, including the three-month termination provision. The court, accordingly, found no basis for extending CPA protections to the transaction.
Conclusion
The Supreme Court of Appeal’s decision in Els v Venter provides valuable guidance on the application of the CPA to residential leases.
The judgment confirms that the CPA applies only to lease agreements concluded in the ordinary course of business and does not extend to private, once-off rental arrangements between individuals. This distinction ensures that the protections afforded by the CPA remain focused on commercial transactions where consumers may require legislative protection, while preserving contractual freedom in private arrangements.
Landlords, tenants and property practitioners should therefore carefully consider the nature of the leasing arrangement when determining whether the CPA applies. The decision serves as an important reminder that not all residential leases attract consumer protection rights and that the facts of each transaction remain crucial in assessing the applicability of the Act.