Why voetstoots clauses don’t cover all manner of sins
Rental property law expert and director at Marlon Shevelew and Associates Inc, discusses voetstoots clauses in lease agreements.
Over the last century the common law of lease, as it pertains to a landlord’s liability for physical defects, has evolved to the point where it is now codified in the Rental Housing Act Unfair Practice Regulations (strictly in a residential context), and the Consumer Protection Act (applicable to both residential and commercial leases). Prior to the promulgation of these Acts, voetstoots clauses could be included in leases exempting the lessor from liability for any patent or latent defect in the leased premises which render the property unsuitable for the purpose it was intended to be used. Such a clause was permitted if, at the time of the conclusion of the lease, the lessor was unaware of any defects in the goods concerned or had disclosed to the lessee any defect of which he or she may have had knowledge.
In the absence of a voetstoots clause, if the leased premises were not delivered in the agreed condition or could not be used for its intended purpose, the lessee was (and still is) entitled to make use of the normal contractual remedies. If the property is unfit for the purpose it was leased the lessee has the right to cancel the contract since this constitutes a material breach of the lease. If the property can only be partially used for the purpose if was leased, the lessee may claim damages or a proportionate reduction of rent or, alternatively, the lessee may demand that the lessor puts the premises in the appropriate condition.
Regardless of whether or not a voetstoots clause was included, since the inception of the Unfair Practice Regulations to the Rental Housing Act, a landlord is required to let a residential dwelling “in a condition reasonably fit for the purpose for which it is let” and “in a condition that does not contravene the provisions of the Rental Housing Act, the regulations, any ordinance, health or safety regulation or any other law.” Failure to comply with these regulations constitutes an unfair practice and the lessee may refer the dispute to the Rental Housing Tribunal.
The inception of the Consumer Protection Act in 2011 has further curbed the reach of any purported voetstoots clause, as long as the lease is subject to the Act. The CPA applies to all leases entered into during the normal course of business within the Republic of South Africa, as well as to the premises concerned, unless specifically excluded by the Act. It is important to note that the CPA is not applicable to private leases, that is, the lease must be concluded during the lessor’s ordinary course of business. Properties let by estate agents would fall within the purview of this definition. If the tenant is a business, it must have an asset value of less than R2m for the Act to apply. The Act contains a series of provisions relating to the warrantee against latent defects under the “right to fair value, good quality and safety” in part H of chapter 2.
Section 53(1) defines a defect as, inter alia, “(ii) any characteristic of the goods that renders [them] less useful, practicable or safe than persons generally would be reasonably entitled to expect in the circumstances.” Accordingly, the test is whether a consumer (“lessee”) could reasonably have expected more from the merx (“the leased premises”). Section 54 deals with the consumer’s right to demand quality service and, should the lessor fail to comply, the section affords the lessee the right to require the lessor to remedy the defect or claim a refund of a reasonable portion of the rent paid, having regard to the extent of the failure.
Further, section 55(2) requires all goods to be (a) reasonably suitable for their intended purpose; and (b) of good quality and free from defects. Section 55(6) (which limits the ambit of the voetstoots clause, thereby developing the common law) dictates that a lessee may not rely on section 55(2)(a) and (b) if he or she was informed about the condition of the lease premises and expressly accepted said premises in that condition or knowingly acted in a way compatible with accepting the premise in that condition. It is therefore now mandatory in terms of the CPA that the lessor informs the consumer of any defects or flaws in the premises.
Section 56 (which is read with section 55) creates an implied warrantee that the leased premises is suitable for the purpose for which it is let and free from any defects. The lessor therefore has the right, in terms of section 56(2), to be released from the lease within six months of signing if the premises does not comply with section 55. Ordinarily under this section a consumer’s remedies would be a refund, replacement or repair of the merx. However, in the context of leases, the lessee’s remedies are likely limited to a remission of rental or that the lessor be compelled to repair the defect. A refund is conceivably possible if the defect is so severe that the tenant was unable to derive any use and enjoyment from the premises at all.
Landlords may therefore only include clauses in leases exempting liability as long as they do not offend any of the provisions discussed above and, even if any such clause is absent, the provisions of the CPA and the unfair practice regulations would in any event be read into all lease agreements where applicable.
Who is Marlon Shevelew?
Marlon Shevelew is the director of Marlon Shevelew and Associates Inc., a Cape Town-based law firm specialising in rental property, contractual, consumer and company law.