You will notice that the “Duration” clause in the CPA compliant Lease Agreement differs from the “Duration” clause in the non-CPA compliant Lease Agreement. This is due to the fact that, in terms of section 14 of the CPA, as read with Regulation 5 of the CPA, a fixed-term agreement (in this case, a Lease Agreement) may not subsist for longer than 24 months, unless the Landlord, as the supplier, can show a “demonstrable financial benefit” to the consumer, in this case the Tenant.
The Courts have yet to interpret precisely what constitutes a “demonstrable financial benefit”, but in the case of a Lease Agreement the view is that it would be something like no increase in Rental, or a property that is close to the Tenant’s office so that the Tenant can spend less money on travel. The question has been asked as to whether a Landlord may alter the clause to specify a longer duration. The answer is unequivocally no, as one may not contract out of the provisions of the CPA. As such, in the case of the CPA compliant Lease Agreement, where a Landlord wants the Lease Agreement run for a period longer than 24 months, clause 1.25 of the lease agreement MUST be completed.