Legal Updates

Voetstoots Projects Unaware Seller Against Defects Claim

Banda and Another v Van der Spuy and Another (08/5489) [2011] ZAGPJHC 126 (23 September 2011)

This judgment deals with the sale of a thatch-roofed house. At the time of contracting, the seller advised the purchaser that recent repairs were effected to the roof after leaking occurred during rain storms. After registration of transfer and a new batch of heavy rains, the roof again leaked and the purchaser was advised by a specialist thatcher that all the roof problems related to the fact that it was constructed at an incorrect pitch and had to be replaced. The subsequent claim against the seller failed because the court held that, although the seller received reports and details of damage to the roof before the sale, these did not relate to the pitch. As such, the seller cannot be held liable for the damages that the purchaser suffered, because he too did not know of this latent defect in the structure of the roof. Read Judgement...



Resisting Eviction by Holding Onto An Improvement Lien

Guman NO v Ansari and Others (2011/2648) [2011] ZAGPJHC 124 (23 September 2011)

A lien is a right of retention and involves the right to retain physical control of another person's property as a means of security payment of a claim relating to necessary or useful expenditures made in respect of that property. As this judgment illustrates, a lien however does not grant an illegal occupier of property the right to use the property and is limited to the lesser amount of the actual expenses and the enrichment of the owner. So beware relying on a lien: the occupier must be in lawful possession and must, amongst other things, prove the value of the necessary or useful improvements effected. Read Judgement...



Execution Sales: Some Protection for Buyers Against Unlawful Tenants

Ives v Rajah (A205/2011) [2011] ZAWCHC 390 (23 September 2011)

The PIE Act protects land occupants from illegal eviction and prescribes many factors that a court must consider before an eviction is ordered. However, the Act draws a distinction in the relevant factors to be considered where the eviction is pursuant to a sale in execution, thereby ensuring that the provision of mortgage loans is not put in jeopardy or made more expensive by the risk that purchasers at execution sales face of not obtaining vacant occupation. The judgment illustrates what our courts consider, especially where the person to be evicted is disabled. It also cautions against placing unrealistic expectations on local authorities to step in and provide alternative accommodation. Read Judgement...



Interesting Changes to the New Companies Act

The New Companies Act which came into force on 1 May 2011 has introduced some interesting changes, one of which concerns the sale by a company of the whole or a major portion of its assets.

The previous Companies Act required a special resolution by the shareholders which had to be registered with the Companies Office within 6 months of its passing, failing which it would be invalid.

The New Companies Act still requires the passing of a special resolution by the shareholders, but does not require it to be registered or filed with the Companies and Intellectual Property Commission for it to be valid.

If you need help with this process or the drafting of the resolution, contact us at info@stbb.co.za.



Agreement Silent on How Purchase Price is to be Paid - Void

Slabbert and Others v Slabbert and Others (A55/2011) [2011] ZAFSHC 165 (20 October 2011)

When the owner of a farm sold it to her son and his wife, the sale agreement failed to stipulate when the purchase price had to be paid. Later a dispute arose between the parties regarding interim occupation of the farm and ended in a court battle in which the agreement was declared void. Our courts hold that if the terms of an agreement of sale of immovable property is vague with regard to the method of payment or allows it to be determined by future negotiation, the agreement is void ab initio and cannot be rectified. Read Judgement...



Security Services - How Long Is Their Line of Duty to You?

Loureiro and Others v Imvula Quality Protection (Pty) Ltd (09/15228) [2011] ZAGPJHC 140 (30 September 2011)

This judgment investigates the extent of home security companies' responsibilities towards those who hire their services. It examines what a family may expect of a specialist security guard hired to protect their home from intruders and the circumstances in which a court will find that the security company has breached its obligations towards the client. Read Judgement...



Land Owners: Beware Your Duty to Prevent Fire Outbreak

Komatieland Forests (Pty) Ltd v Roux and Others (9853/08) [2011] ZAGPPHC 200 (14 October 2011)

Property owners owe a duty of care towards their neighbours and disregarding this may be costly, as the facts of this matter illustrate. Particularly, owners of agricultural land are obliged to implement fire avoidance and control measures or pay up for a neighbour's damage that results from a failure to implement the necessary safety measures. Read Judgement...



CPA Lease Agreements - When May They Exceed 24 Months?

In terms of the Consumer Protection Act, a lease agreement between a supplier and a consumer (as defined in that Act) may not exceed a period of 24 months. However, the following exceptions apply:

  • where both parties are juristic persons;
  • where the landlord is able to prove that the property being leased is not part of any of his business operations and that the lease is a "once off" transaction;
  • where the lessee is exempt from the operation of the Act, i.e., if the lessee is a company, trust or close corporation with a turnover or asset base over R2 million; or
  • where it can be shown that there is demonstrable financial benefit to the lessee in a lease that extends longer than 24 months.

If you have questions, speak to the professionals at STBB.




Restrictive Title Conditions & Zoning Provisions - Know the Difference or Face Risks

Nelson Mandela Bay Metropolitan Municipality v Harlech-Jones NO and Others

This recent judgment in the above matter draws attention to some interesting issues regarding the use of land contrary to zoning regulations and title deed restrictions and serves as a reminder of the risks the offending owner faces. Read Judgement...



Love Thy Neighbour... and Don't Disturb His View?

Camps Bay Ratepayers and Residents Association and Another v Harrison and Another

When an owner of a property in Camps Bay decided to renovate her home from a one to a three storey dwelling, much opposition was expressed by owners of neighbouring properties. After a long battle in the courts, the neighbouring owners ultimately failed in their attempt to derail the building plans. The question remains whether they would have succeeded if they had chosen a different line of attack. Read Summary...



Body Corporate's Management Alarming? Correct Complaint Route Crucial

Cassim and Another v Voyager Property Management (Pty) Ltd and Others, Cassim and Another v St Moritz Body Corporate (Pty) Ltd and Others [2011] ZASCA 143; 574/10 (23 September 2011)

An owner of a flat or a house in a sectional title scheme cannot simply approach a court in his personal capacity when the body corporate's management of the scheme is cause for alarm, no matter the apparent validity of his concerns. The Sectional Titles Act prescribes a certain procedure to follow which includes, as the Court noted in this matter, the appointment of an objective outsider, a curator ad litem, to investigate and then address the owner's complaints. Read Judgement...



Seller Cuts His Nose and Spites His Face

Laeveld Trust 2001 (Pty) Ltd and Others v Blue Fire Properties 115 (Pty) Ltd [2011] ZASCA 174; 795/10 (29 September 2011)

This matter deals with a 2005 sale agreement of commercial properties to the value of almost R129 million. The buyer was granted a period within which to request documents relevant for a due diligence investigation to enable it to decide which properties were not viable and exclude these from the sale. The completion of the due diligence period was however postponed because of the seller's breach in refusing to provide certain financial documentation. Five years later, when the seller was ordered to furnish the documents, the buyer requested additional documentation to update its due diligence investigation to the current (2010) position, which the seller refused.

The Supreme Court of Appeal found in favour of the buyer and held that its 2010 request for documents could not be limited to documents in existence at the time of the agreement, if the time lapse was as a result of the seller's own breach. One can only imagine the magnitude of the seller's loss in interest and financial opportunity in the 5 year period.
Read Judgement...



Seller's Double Commission Shock

Wakefields Real Estate (Pty) Ltd v Attree and Others [2011] ZASCA 161;666/10 (28 September 2011)

It is notoriously difficult, in the case of competing efforts of various estate agents, to determine who was the effective cause of a sale and accordingly entitled to commission. Here the seller paid commission to agency A, but the court found that agency B was entitled thereto despite the fact that agency A held a sole mandate with the Seller. Sellers therefore beware the complications that may arise where various agents assist in selling your home: obtain assistance from your attorney to include appropriate measures in the agreement to deal with your commission liability. Read Judgement...



Invalid Variation of Trust Deed Revives Previous Version

Potgieter v Potgieter NO and Others [2011] ZASCA 181;629/2010 (30 September 2011)

To vary the provisions of a trust deed our law requires that the founder and trustees must agree to the changes. However, as the judgment illustrates, once a trust beneficiary has accepted the benefits of the trust, he must also consent to the variation agreement. Therefore make sure you have all the necessary parties' involvement when varying a trust deed, failing which the variation is invalid and the original provisions of the trust deed will prevail. Read Judgement...



Green Paper on Land Reform, 2011

Government Gazette 34656 of 30 September 2011

An invitation to comment on the Green Paper on Land Reform was published in Government Gazette 34656 of 30 September 2011. All comments are to be submitted within 60 calendar days after 30 September.

The Green Paper itself and details of offices where submissions can be made are available below. Read more...



Check Title Deed Conditions, or Face Delays!

It is important to peruse a title deed for lapsed conditions or a required consent before registration can take place.

For example, a title deed may contain a pre-emptive right in favour of a previous Seller. (A pre-emptive right is a right in terms of which the Seller undertakes not to sell the property unless the previous owner has been given an opportunity to repurchase it).

If the Deeds Office overlooked this condition during previous transfers then, in order for registration to take place, the conveyancer must lodge either a consent by the previous Seller to the transfer or, alternatively, a consent by the previous Seller to the condition being removed from the title, both of which may cause delays as the previous Seller could be hard to locate.

Should you require assistance with this process, please contact one of our professionals at info@stbb.co.za or go to www.stbb.co.za




Conveyancer Regrets Issuing Letter of Undertaking on Verbal Instruction

Heaney and Another v Petersen [2011] ZAECPEHC 38; 515/2009 (6 September 2011)

Often conveyancers form a certain level of trust when dealing with longstanding clients. In the hustle and bustle of daily office duties, it is not uncommon for clients to simply issue instructions to the property practitioner verbally. This judgment serves as a reminder to always play it safe by asking for the instruction to be put in writing or, at the very least, confirm receipt of the instruction in writing. Read Judgement...



Rectification of Title Deed Where Whole Property, Not Portion, Transferred

Schmidt Bou Ontwikkelings BK v Bester en Andere [2011] ZAWCHC 325; 1689/2010 (17 August 2011)

In this matter the Court dealt with an interesting set of facts and confirmed the application of the so-called 'abstract theory' in respect of the transfer of ownership of immovable property. In short it means that where there was an intention on the side of the seller to pass transfer and an intention on the side of the purchaser to acquire ownership, and such a transfer was registered, then the invalidity of the underlying sale agreement will not affect the validity of the passing of ownership. Moreover, applying for rectification of a recordal in the deeds office is not a recourse that is governed by the usual prescription periods; rectification is distinguishable from the enforcement of a debt, the latter being regulated by the Prescription Act. Read Judgement...



Can the State Expropriate Prior to Paying Compensation?

Haffejee NO and Others v eThekwini Municipality and Others [2011] ZACC 28; CCT 110/10 (25 August 2011)

This matter raises the question of when the amount of compensation for expropriation of property in terms of the Expropriation Act must be determined and paid. The Constitution determines that property may only be expropriated “subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court”. But must compensation be paid before the expropriation, or can it follow thereafter? Read Judgement...



Developer Left Between a Rock and a Hard Place

Lagoon Bay Lifestyle Estate (Pty) Ltd v Minister of Local Government, Environmental Affairs and Development Planning of the Western Cape and Others [2011] ZAWCHC 327;10751/2011 (31 August 2011)

Different functionaries and organs at various levels of local and provincial government are involved in the decision-making process regarding huge developments that stretch over large areas. This can result in inconsistent decisions taken by these departments and, as was illustrated in this matter, may result in an abrupt end to a process that was initiated many years earlier. In the Court’s words, this is “the unfortunate result of a fragmented and cumbersome administrative process which cries out for legislative reform”. Read Judgement...



Does Voetstoots Cover Unapproved Building Plans?

Because there is a common law implied term in a sale agreement that the land and buildings are without latent defects (unless excluded by the parties in a voetstoots clause), purchasers often assume that this implied term provides a warranty that the necessary municipal approvals were obtained when buildings were erected on the property.

Not necessarily! A recent Supreme Court of Appeal decision held that the absence of such statutory approval constituted a latent defect in that, should alteration or demolition be required, the ordinary use of the property would be affected.

The liability for latent defects is usually placed on the shoulders of a purchaser by a voetstoots clause. Therefore, unless there is proof that the seller fraudulently failed to disclose lack of municipal approval for the buildings, there is no liability on the side of the seller for this defect.
For details and more information, read the full text here.

Contact one of our property professionals on info@stbb.co.za or visit our website at www.stbb.co.za.




When A Court Will Deny You Equal Sharing in Assets of the Marriage

In the South African context, every civil marriage is governed by a particular marital property regime. Spouses who do not conclude an antenuptial contract are said to be married in community of property, thereby creating a joint estate of their assets and liabilities. They have equal powers with regard to the assets of the joint estate and must obtain permission from one antoher when making decisions regarding the assets. Upon dissolution of the marriage, the assets of the joint estate will in principle be divided equally between the parties. But not in all instances... Summary



Joint Owners in Land Fight For Sole Ownership - Court's Discretion Required

Vorster and Others v Vorster and Others [2011] ZAECPEHC 33;1723/07 (2 August 2011)

This judgment presents a joint owner conundrum: each approached the Court for a request that the whole property be transferred to him. Whilst such a remedy is generally available to a joint owner, it cannot work if all joint owners seek the same remedy. In the present case, the parties could not reach an agreement to partition the property or resolve the matter otherwise. The Court noted that it therefore had to exercise its equitable discretion and may award the joint property to one of the co-owners provided that he compensates the others, or may order that the joint property be put up for auction and the proceeds divided amongst the joint owners. Read Judgement...



Nasty Consequences Follow For Trustee Acting Without Required Authority

Mallinson NO v Slaters [2011] ZAECGHC 29;CA327/2010 (1 July 2011)

This is a predictable judgment because it demonstrates yet again that a trustee may act only if he has the necessary authority to do so. The trust deed in the present matter required a majority of trustees to agree before any agreements could be concluded or legal actions instituted, yet a single trustee acted alone in all these respects. He signed an offer to purchase in which the Trust was acquiring a property and subsequently instituted action to evict the seller from the property – in vain, as the Court held that, as a result, the agreement was void and he had no locus standi to bring the eviction application. Read Judgement...



Zoning Certificates: Developers Beware

A developer, who has all his ducks in a row for a proposed building project, including the required municipal consents, can still not rest assured that he can push the 'go' button. This is so because the Kwazulu-Natal High Court in July 2010 held that a municipality could retract its consent, after building had commenced, if it learns that it had erroneously authorised the development on land not zoned for such use.

To add insult to injury, the Court found that the applicable Ordinance did not allow for a damages claim against the municipality in respect of the developer's wasted costs. Accordingly, developers needs to do extra homework in respect of establishing the applicable zoning of properties intended for development, to ensure independently that the development does not contravene the zoning provisions. Read the summary here.

For more information, please contact one of our professionals at info@stbb.co.za.




Trusts: Beware of Just Signing on the Dotted Line!

There has been a spate of judgments over the past ten years in which agreements entered into by Trusts were declared null and void. What is it that goes wrong when Trusts enter into agreements for the purchase, sale or mortgage of land? Summary



Injuries Sustained at a School Sporting Event - Is the Indemnity Enforceable?

Schools need to check that their disclaimers adequately address the interests of the relevant pupils and are properly worded before they will be legally binding. Otherwise a school may well be held liable if children are injured while taking part in school activities. Below we briefly discuss the recent finding of the Eastern Cape High Court when it was asked to consider the enforceability of an indemnity signed by a participant in an adventure race. Read Judgement...



Your Trust - Do You Have the Requisite Number of Trustees and Are They Authorised to Act?

When a Trust is first registered with the Master of the High Court, Letters of Authority are issued by the Master in favour of the first trustees who are named in the trust deed. This is in compliance with Section 6(1) of the Trust Property Control Act which states that no trustee shall have the capacity to act unless authorised by the Master. Summary



Important Judgment Regarding Execution Against Immovable Property

Standard Bank v Bekker, 25 August 2011, Western Cape High Court, Cape Town

On 25 August 2011 the Western Cape High Court issued an important judgment in which it detailed the facts that a mortgagee-creditor needs to aver when claiming execution against a mortgagor-debtor's place of residence. In essence, the summons must indicate whether or not the mortgaged property is the residence of the debtor and if so, or of there is uncertainty about this aspect, the Court must deal with the application and will need to take relevant circumstances into account before making an order. Where the immovable property is not the residence of the debtor, the Court Registrar may deal with the application. Read Judgement...



Personal or Praedial Servitude? How Much Does It Matter?

Resnekov v Cohen [2011] ZAWCHC 317;1787/11 (24 August 2011)

Have you ever thought about the distinction between a praedial and a personal servitude? There is an important distinction - the one is established over a servient property to the benefit of a dominant property, in perpetuity and irrespective of the identity of the owner; the other is purely personal, constituted over a servient tenement, in favour of a particular person and is ordinarily extinguished on the death of the holder. The distinction becomes crucial where a seaview property owner wishes to object against his neighbour's building plans on the basis of a servitude in his title deed that places a height restriction on building works. The judgment clearly sets out how the common law deals with the two types of servitudes and when a servitute will disallow a neighbour to proceed with building plans. Read Judgement...



New Legislation for Sectional Title and Other Communal Housing Schemes

Community Schemes Ombud Services Act, 9 of 2011 - The "Who"

This is the second in a series of notes in which we will guide you through the essentials of two new related Acts that deal with the management of various communal schemes and the resolution of disputes between owners and schemes' governing bodies. In this edition, we look at the "who", i.e. who the Act says, can bring actions before the office of the Ombud.
Part 1 - Community Schemes Ombud - The Who
Part 1 - Community Schemes Ombud Services Act - An Introduction
Community Schemes Ombud Services Act
Sectional Titles Schemes Management Act [1.58Mb]



Buying on Behalf of a Company to be Formed - Company Must OK the Agreement in Due Course, Or Else

Jozistat (Pty) Ltd v Topaz Sky Trading 217 (Pty) Ltd and Another [2011] ZAGPJHC 91;2011/29988 (17 August 2011)

Often an agreement for the purchase of land is signed by someone acting on behalf of a company to be formed. Whilst this is perfectly valid under both the old and new Companies Acts, both Acts have very specific provisions relating to the adoption of the pre-incorporation agreement. Falling short of the requirements within the time periods stipulated in the legislation may render the sale agreement a nullity. This case illustrates the outcome. Read Judgement...



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Can a Landlord Remove a Non-Paying Tenant's Goods?

A landlord has a tacit hypothec over a tenant's movable property, should the tenant fail to pay any rental that is due. However, the hypothec is only enforceable if the landlord has a court order to this effect!

Thus, prior to obtaining a court order, the tenant may remove his goods from the premises himself and the hypothec will fall away.

Section 32 of the Magistrate's Court Act is a useful tool in such circumstances as it allows the landlord to obtain an urgent order perfecting the hypothec and authorising the sheriff to attach and remove the goods for safe-keeping, pending the finalisation of any action for the outstanding rental.

Consult one of our legal professionals at info@stbb.co.za if you need assistance.





Agent Effective Cause of Sale Without Having Set Eyes on Purchaser

Elbie Eiendomme CC t/a El Madre Properties v Ryton Estates (Pty) Ltd (51863/08) [2011] ZAGPPHC 58 (15 April 2011)

An estate agent introduced a facilitator of a business transaction to a property and an agreement of sale was ultimately concluded with a Purchaser with whom the facilitator negotiated. The agreement did not make provision for commission and the Seller further argued that the Agent did not have a mandate, was not involved in the negotiations of the agreement and in fact never dealt with the Purchaser in any way whatsoever. Despite this, the Court found that it was the estate agent who was the effective cause of the sale. Read Judgement...



Rate of Interest Charged on Loan Immoral?

Slip Knot Investments 777 (Pty) Limited v Project Law Prop (Pty) Limited and Others (36018/2009) [2011] ZAGPJHC 21 (1 April 2011)

This matter dealt with interest charged in respect of mezzanine funding. The Court upheld a 1904 judgment that a borrower in such types of loans could not refuse to pay the agreed interest simply because it was usurious. Moreover, if the interest increased on the debtor's failure to make payments as agreed, this will only contravene the Conventional Penalties Act if such penalty increase is out of proportion to or is markedly greater than the prejudice suffered by the lender. In commercial transactions where risk is of the utmost importance, an interest increase in the event of default is reasonable. Read Judgement...



Toe the Admin Line to Avoid Tenant Woes

Ekosto 1042 CC v Van Wyk (3023/10) [2011] ZAECGHC 13 (3 March 2011)

In this matter the Court rejected, amongst other things, a tenant's claim to stay on in premises which he no longer lawfully rented. The tenant relied on a lien for improvements effected, but the Court rejected this claim in the absence of specific proof that the tenant himself paid for the improvements. Although the lesson to be learnt is therefore technical, it also is a demonstration of the tenuous position a tenant may find himself in if all arrangements with the landlord are not clearly reduced to writing and recourse is sought with regard to oral evidence. Read Judgement...



Body Corporate De-Activates Defaulting Owner’s Access Disk - Unlawful?

Fisher v Body Corporate Misty Bay (20010/11) [2011] ZAGPPHC 56 (12 April 2011)

The interesting set of facts in this judgment provides for a valuable demonstration of the application of the mandament van spolie, a legal remedy that secures the status quo by restoring undisturbed possession that was spoliated by someone taking the law into his own hands. Here, the access disk of an owner who was in arrears with his levy payments was de-activated. The Court granted the remedy, holding that the owner’s undisturbed access to and possession of his home was disturbed by the body corporate taking the law into its own hands. Read Judgement...



Sole Heir of Deceased Estate Cannot Sell Property Before Estate Finalised

Booysen and Others v Booysen and Others (29558/10) [2011] ZAGPJHC 27 (25 March 2011)

This judgment serves as a valuable reminder that an heir to the assets of a deceased does not upon the death of the testator acquire the ownership of the assets and thereby the right to sell them. The heir merely acquires a vested claim against the executor for delivery (of movable things) or transfer (of immovable property) of the assets comprising the inheritance, which claim becomes enforceable only after the liquidation and distribution account has been confirmed. Read Judgement...



Conveyancer More Than Seller's Agent?

Nortje v Fakie (AR643/10) [2011] ZAKZPHC 15 (7 April 2011)

Deeds of sale typically vest conveyancers with powers to notify parties of various issues that require their compliance. The question that arose in this matter was whether a seller could, independently of his appointed conveyancer, validly notify a purchaser of an issue requiring compliance which the Deed of Sale specifically conferred upon the conveyancer. Read Judgement...



Commission Made Payable After Buyer's First Instalment - What If Buyer Defaults?

Alte Properties v Schutte NO and Others (98/2011) [2011] ZAFSHC 43 (17 March 2011)

In this instance, an agreement of sale stipulated that commission would be payable to the selling agent once the buyer paid his first instalment in respect of the balance of the purchase price. The buyer however defaulted and the agreement was not proceeded with. The Court confirmed that where commission is linked to a ‘time clause’ (e.g., that payment of agent’s commission shall take place on the due date for the buyer to make an instalment payment), it does not mean that the payment of commission is subject to such instalment payment. The Court therefore ordered the commission due and payable. Read Judgement...



Agreement To Register Servitude Re Height Restriction of Home: Need not be in Writing to be Enforceable

The 3 Tenners Properties CC v The Trustees for The Time Being of the Atlantic Seaboard Trust (9478/2008) [2011] ZAWCHC 51 (22 March 2011)

This is an interesting read. The Court upheld an oral agreement between two neighbours in terms of which a height restriction servitude was to be registered over one property in favour of the other. The owner of the latter property, in return, undertook not to object to pending building plans that were within this height agreement. The Court held that this agreement did not constitute an ‘alienation’, ‘donation’ or ‘exchange’ as defined in the Alienation of Land Act, which would have required the agreement to be reduced to writing and signed by the parties to be valid. Read Judgement...



No Commission if Bond Not Granted on Usual Terms and Conditions

Lategan and Another v Leslie Mildenhall Trollip t/a Property Solutions (A246/2010) [2011] ZAFSHC 34 (10 March 2011)

In this matter the Court ruled against an estate agent claiming commission because it found that the sale agreement had lapsed due to non-fulfillment of the bond condition. A bond was granted in principle and on time, but with extra conditions, upon which the purchaser opted to regard the agreement as lapsed.
The Court unfortunately did not elaborate on the circumstances under which conditions would not constitute ‘usual terms and conditions’, due to a lack of evidence in this regard. Read Judgement...



Consumer Protection Act Threshold Application

When the Consumer Protection Act came into operation on Friday 01 April 2011, the Department of Trade and Industry also announced that they have lowered the threshold for application. Previously they gazetted their intention to make it R3 million, but it was now set at R2 million.

This means that:

  • all natural persons; and
  • entities with a yearly turnover of less than R2 million, are considered consumers for purposes of the Act.

For more information on the Consumer Protection Act's impact on you, contact the professionals at info@stbb.co.za




Does Your Title Deed Contain Restrictive Conditions?

Many Title Deeds contain restrictive conditions or personal servitudes (such as usufructs or pre-emptive rights) which have already lapsed. The Deeds Office insists that such lapsed conditions be removed from the Title Deed when the property is dealt with in any way, even when you register a further bond over the property.

Be aware of this added requirement and ask your conveyancer to check your Title Deed for any of these conditions to avoid hold-ups when your transaction is lodged in the Deeds Office.

Contact one of our property experts at info@stbb.co.za if you have questions on this topic.



Water Compliance Certificate

The Municipality in Cape Town introduced a By- Law on 18 February 2011 making it compulsory to file a water inspection compliance certificate prior to registration of transfer.

Meyer de Waal worked closely with Mr Danie Klopper, Head of Policy, Strategy and Regulation at the City of Cape Town’s Water and Sanitation Department, Sandy Walsh of the Institute of Estate Agents, Stefan le Roux convenor of the Law Society’s Property portfolio and Larry Berger, chairman of the Institute of Plumbers of South Africa (IOPSA) to draft and compile a list of FAQ.

To obtain a copy of the Frequently Asked Questions, the water by-law, a draft of the certificate of compliance, list of municipal areas involved and an addendum to a deed of sale contact Juanita@oostco.co.za.



Consumer Protection Act

The Consumer Protection Act will be implemented from 1 April 2011. To regulate the sale of a property, the Property Transaction Kit was developed to provide a seller, purchaser and estate agent full access to the documents required to view [title deed conditions, survey diagram, zoning certificate, building plans, standardized deed of sale, beetle, electrical, plumbing, gas, house inspection reports] prior to signature of a Deed of Sale or Offer to Purchase.

The Institute of Estate Agents, Convenor of the Law Society’s Property portfolio, representatives of the Institute of Plumbers of South Africa (IOPSA), Pest Control Association, Electrical Contractor’s Association, Gas Inspection and House Inspection Group, Insurance Mediation Groups were consulted. It is expected that the Property Transaction Kit will form the basis of every new sale as from April 2011. To obtain more information – contact meyer@oostco.co.za.



Change in Transfer Duty for Trusts

A trust remains one of the best tools for estate planning. Prior to the recent change in the transfer duty act it would have cost a buyer up to R40 000.00 more in transfer duty to take ownership in a trust. A trust now pays the same transfer duty as a natural purchaser.

Contact Meyer de Waal meyer@oostco.co.za for more information on how proper planning can protect your assets against estate duty and debt or insolvency. To obtain a free tool to calculate transfer costs, capital gains tax, and many more on your mobile phone – contact Leon@oostco.co.za.



Changes at CIPRO, a major overhaul

As of the 1st of April 2011, major changes will be implemented by the Companies and Intellectual Property Registration Office (CIPRO) in preparation of the new Companies Act soon to take effect. A new Companies and Intellectual Property Commission will also be launched at the end of March becoming active on the first day of April.

According to Kirkman Lanfear Inc, the following should be done by all our clients before 31 March 2011 in order to have the Old Companies Act’s provisions apply:

Lodge all outstanding annual returns
Lodge all restoration requests for de-registrations
Lodge all name reservation requests
Lodge any application for a new CC

We therefore strongly advise that all OMDW clients address any outstanding issues urgently and also take note that no new registrations of close corporations can be done after 1 April. Contact Meyer de Waal on meyer@oostco.co.za or Leon Killian on leon@oostco.co.za for assistance.




Director, The Buck Stops With You: New Companies Act

The new Companies Act is set to come into operation on 01 April 2011 and rings in an era in which directors are substantially more exposed to possible personal liability for company losses.

This may happen when a director:

  • fails to act with the required care, skill and diligence that is required of someone at that level;
  • does not disclose personal financial interests;
  • abuses his/her position to gain a personal advantage;
  • does not act in good faith or in the company's best interests;
  • trades under insolvent conditions; or
  • approves financial statements that are materially false or misleading.

Read here for more information or contact us at info@stbb.co.za




Lessor Punished for Proliferation of Actions to Cancel Lease

Socratous v Grindstone Investments 134 (Pty) Ltd (149/10) [2011] ZASCA 8 (10 March 2011)

Lease agreements often provide for various eventualities that will grant one or other party the right to cancel. In this instance, the lessor instituted separate actions under allegedly different entitlements to cancel the lease. The Court rightly enquired “how many times can you cancel a lease?”. Finding that the lease could not be cancelled, he also made a cost order against the lessor for abuse of the court process. Read Judgement...



Lessee Claims Consultation After Lease Expiry Gives Constitutional Right to Continued Fair Negotiation

Pareto Ltd and Another v Coffee ZAKZDHC CC (24773/2010) [2011] ZAWCHC 11 (24 February 2011)

In this matter the lessee opposed an application for his eviction from the premises after expiry of the lease. He contended, amongst other things, that attempts at renegotiating the lease after its expiry created an understanding, similar to a tacit agreement, that they would continue to negotiate. The understanding, they alleged, arose by virtue of public policy and the Constitution. The Court here held that there was no proof that any tacit agreement or understanding was created and the eviction of the lessee was ordered. Read Judgement...



Sectional Title Dispute: Accepting Choice of Other Arbitrator Disallows Later Claim of Irregularity

Gale v Van Doorn and Another (3093/10) [2011] ZAKZDHC 17 (3 March 2011)

Continued hostility between two sectional title neighbours resulted in the referral of their disputes to arbitration in terms of the Management Rules of the scheme. The Court in this matter held that when a different arbitrator than the one mentioned in the Rules is appointed, with the knowledge and consent of both neighbours, one party cannot afterwards complain that the appointment was irregular.
This outcome is a reminder to take care with aspects involving the appointment of an arbitrator should you be involved in a dispute that will be arbitrated upon.
Read Judgement...



The Latest on Plumbing Certificates for Cape Properties

As reported to you earlier, the City of Cape Town passed a new water by-law which determines that, with effect from 18 February onwards, all sellers of properties within its jurisdiction must furnish a Plumbing Certificate to the municipality before transfer.

The certificate serves to confirm that:

  • the water installation conforms to the national building regulations;
  • the property's water meter is registering;
  • there are no defects that can cause water to run to waste; and
  • no rainwater leaks into the sewerage system.

To assist you, we have posted:

  • a list obtained from the Municipal Demarcation Board indicating which areas fall under the City of Cape Town's jurisdiction; and
  • a suggested clause/addendum to include in your sale agreement to provide for compliance with this by-law.

For more information and all the details, go to www.stbb.co.za or email us on info@stbb.co.za




Business Rights Lapse If Conditions of Approval Not Fulfilled

Ethekwini Municipality v Alderwood Trading 61 CC (6244/2010) [2011] ZAKZDHC 13 (4 March 2011)

A municipality granted authority to a property owner to use certain residential premises for business purposes provided some building alterations were made. The court held that when the period in which these alterations were to be made lapsed without the alterations having been effected, the authority and conditions fell away.
Purchasers, take care to ascertain what the terms of a municipality’s consent for business use are before agreeing to purchase. Read Judgement...



Failure to Indicate Purchase Price Sinks Sale Agreement

Zamisa v Kali and Others (15249/2009) [2011] ZAKZDHC 10 (17 February 2011)

This judgment is a reminder of the strict provisions of the Alienation of Land Act that requires the material terms of an agreement of sale of immovable property to be reduced to writing and signed by both parties. In the present matter an oral agreement in respect of the purchase price was reached and the amount was paid to the seller. The parties did not, at the time, complete the sale agreement to this effect. Two years later an amended purchase price was inserted on the sale agreement, but not prior to the seller having entered into a valid agreement of sale with a third party. Read Judgement...



Liability For Maintenance Expenses Incurred Prior to Transfer

Solvista Investment (Pty) Ltd v Sasol Fibres (Pty) Ltd (AR666/2009) [2011] ZAKZPHC 5 (28 February 2011)

Deeds of sale for immovable property typically include provisions for liability for expenses relating to the property during the period between the date of sale and transfer. In this matter the relevant clause provided that ‘liability to pay all rates, taxes and other outgoings’ would pass to the purchaser on the date of transfer. The purchaser claimed that it was entitled to be indemnified by the seller in respect of amounts it had expended on security, gardening, general cleaning, maintenance and protection services in respect of the property, such constituting ‘other outgoings’. The seller disagreed, contending that ‘other outgoings’ only related to expenses connected with its obligation to pay rates and taxes. Here, the Full Bench reconsidered the conclusion reached by trial court as to the correct interpretation of the agreement. Read Judgement...



Seller or Purchaser Out of the Country?

Avoid unnecessary delays in a property transaction in instances where parties live overseas or plan to take leave outside South Africa. Our law prescribes certain formalities that must be complied with if documents are signed outside South Africa. This involves that the document must be authenticated by, amongst others, either signing the document before:

  • a Notary Public who will affix his seal thereto (if in Botswana, the UK and Northern Ireland, Lesotho, Swaziland or Zimbabwe); or the head of the South African diplomatic or consular agency; or
  • by Apostille, which either a South African diplomatic or consular agency or Notary Public in that foreign country, can affix.

Clients need to be advised about this requirement when they sign the sale agreement so that they can decide upfront to give a Power of Attorney to someone in South Africa to sign the documents here on their behalf. In this way, they save themselves the added hassle and cost of finding the right official in the foreign country.

If you have any questions in this regard, feel free to contact us at info@stbb.co.za.




Avoid Transfer Duty Penalty

Agreements sometimes provide that transfer shall take place some time after the date of signing the agreement, often to provide time to finalise building works or other matters which the parties agreed to. However, be mindful that SARS requires transfer duty to be paid within 6 months of the 'date of acquisition', this being the date of signing, not the date of transfer. Failure to pay in time will attract a penalty calculated at a rate of 10% per year on the amount of the transfer duty.

If you have any questions in this regard, feel free to contact us at info@stbb.co.za



Selling home - plumber's cert required

Cape Town property owners selling their homes should take note that a new City Council byelaw will make it necessary to obtain a certificate from a qualified plumber. “The certificate has to confirm that the plumbing and pipework, including the geyser, in the house are in good working order and comply with the national regulations, in particular those that stipulate that there must be no discharge into the storm water drainage system,” says Lanice Steward, MD of Anne Porter Knight Frank.

The plumber’s certificate does not need to be shown to the prospective buyer but must be submitted to the municipality. This latest byelaw, says Steward, comes on top of laws making it necessary for the home seller to get an electrical certificate, a certificate showing that the woodwork has no borer beetles and a certificate indicating that the gas installations are fully operational and leak free.



Transfer Duty Relief

In yesterday's budget speech the Minister of Finance announced the department's intention to give transfer duty relief in respect of the acquisition of immovable property on or after 23 February 2011. The new rates will be formally effective once the amendment to the relevant taxation laws is enacted, which will be done with retropspective effect from the 23rd onwards. Note that the new rates will apply to all transactions which are not subject to VAT, i.e. it will apply whether the purchaser is a natural person or an entity.

  • Value of property: R0 - R600 000
    Rate:     0%
  • Value of property: R600 001 - R1 000 000
    Rate:     3% of the value above R600 000
  • Value of property: R1 000 001 - R1 500 000
    Rate:     R12 000 plus 5% of the value exceeding R1 000 000
  • Value of property: R1 500 001 and above
    Rate:     R37 000 plus 8% of the value exceeding R1 500 000

If you have any questions with regard to the above, contact us at info@stbb.co.za for assistance. For an overview of general changes to personal income tax, view SARS'pocket guide click here.




Right to cancel a mandate?

Once the Consumer Protection Act comes into full operation on 1 April 2011, a consumer may turn around and cancel an agreement, penalty-free, within 5 days' time. This 5 day cooling-off right only applies to transactions concluded after and resulting from direct marketing, in other words, where the consumer was approached in person or by electronic or ordinary mail. The consumer must be advised of the existence of his cooling-off right.
Be aware of these prescripts when you conclude a mandate after direct marketing!
For more information, contact one of our professionals, at info@stbb.co.za


Evictions - click to read article

This article was prepared by Aggie Ruby, partner at Pincus Matz, and should anyone want to ask questions they can contact her via email: arudy@pincus.co.za or phone the office at 021 797 8191.


Property Law Update - click to read article

Prepared by attorneys STBB SMITH TABATA BUCHANAN BOYES
Telephone: 021 406 9100
E-mail: info@stbb.co.za

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