The recently enacted Consumer Protection Act gives tenants who are individuals too many rights at the expense of landlords, and could make it harder for them to find properties to rent, says Taryn Harris, property lawyer at legal firm Bowman Gilfillan.

“For example, with limited notice, tenants can now cancel a lease at any time within in a 2-year period and incur only a reasonable cancellation penalty,” she says.

This means that signed lease agreements will no longer provide landlords with the same kind of certainty that they previously enjoyed.

And when a landlord leases to an individual, he may not be able to let the property “as is”, says Harris. The Act imposes a duty on landlords to provide a property that is free from defects – unless the defect is specifically excluded by agreement.

The additional cost of fixing the property might well be passed on to the tenant in the form of a higher rent.

“Consequently, landlords are more likely to enter into leases with companies than individuals, because these new requirements do not apply to companies,” says Harris. “So, you could end up in a situation where individuals find that they have to form companies just to be able to rent property.”

The Consumer Protection Act was signed into law on 24 October 2010, with the stated intention of giving consumers broader rights in their contracts with providers of goods and services. These include the right to proper disclosure, good quality and safety, and reasonable terms and conditions.

Written by Taryn Harris
First published on October 03, 2011 on Bowman Gilfillan's website