When Does The National Credit Act Apply

WHEN DOES THE NATIONAL CREDIT ACT APPLY?

The National Credit Act No. 34 of 2005 (“NCA” or the “Act”) is a piece of legislation that provides for consumer protection. This means that where credit transactions take place between parties, it is important for the credit provider to act in accordance with the NCA to ensure it does not prejudice the consumer. The intention of the NCA is to level the playing fields to allow consumers to feel empowered and not to be taken advantage of by large corporate entities.

The two-step test to determine whether the NCA applies to a credit agreement, is whether the consumer falls within the definition of a consumer under section 4 of the Act and whether the transaction would be considered a credit agreement under section 8 of the Act. If the first question is answered negatively then there is no need to continue to the second question as the NCA will not be applicable. It is important to note that the Act only applies to credit agreements within the Republic of South Africa.

Section 4(1) of the NCA states as follows:

“Subject to sections 5 and 6, this Act applies to every credit agreement between parties dealing at arm’s length and made within, or having an effect within, the Republic, except a credit agreement in terms of which the consumer is-

(i) a juristic person whose asset value or annual turnover, together with the combined asset value or annual turnover of all related juristic persons, at the time the agreement is made, equals or exceeds the threshold value determined by the Minister in terms of section 7( 1);
(ii) the state; or
(iii) an organ of state;
(b) a large agreement, as described in section 9(4), in terms of which the consumer is a juristic person whose asset value or annual turnover is, at the time the agreement is made, below the threshold value determined by the Minister in terms of section 7(1);”

The annual turnover or asset value for a juristic person as of today’s date is more than R1 million. This means that the NCA will apply to all individuals and juristic persons whose annual turnover or asset value is less than R1 million. While a large agreement is R250,000.00 or more in terms of Section 7(1)(b).

Section 8 of the NCA defines what credit agreements are and separates the definition into four categories – credit facilities, credit transactions, credit guarantees and any combination of a credit facility or credit transaction.

The NCA does not apply to the following credit agreements:
● Loans to family members, friends, or partners in an informal manner.
● Stokvel agreements
● Insurance policies
● Leasing of immovable property

What is important to note is that there is a misconception that only registered credit providers need to comply with the provisions of the NCA. This is false as the NCA applies to all credit providers and therefore unregistered credit providers should be familiar with the provisions of the NCA in order to be compliant.

If you are thinking of entering into a transaction where credit will be provided, it is important to understand whether you are required to register as a credit provider. Failure to do so may result in unexpected penalties.

Written by: Orissa Ramesar (Candidate Attorney)

For more information please contact Sarah Marx at smarx@bissets.com or via:

Switchboard: 021-441 9800
Website: www.bissets.com
Bissets Whatsapp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Prescription and Maintenance

PRESCRIPTION AND MAINTENANCE: CLAIMING MAINTENANCE AFTER 29 YEARS

In a landmark judgement handed down in January 2022 the Supreme Court of Appeal (“the SCA”) held that a maintenance order is classified as a ‘judgement debt’ and therefore only prescribes after 30 years (Arcus v Arcus 4/2021 2022 ZASCA).

Mr and Mrs Arcus got divorced on 27 July 1993. In terms of this divorce order, Mr Arcus was required to pay maintenance of R2 000.00 per month to Ms Arcus and their two minor children, until their daughters were self-supporting and Ms Arcus either remarried or died. He failed to do so. Over 20 years later, Ms Arcus decided to enforce the maintenance order against her husband. Mr Arcus argued that it would be unfair to permit his former wife to enforce the claim for arrear maintenance so long after their divorce and that the debt had become unenforceable due to prescription.

Let’s unpack what this judgement means for you.

Maintenance

Maintenance is an amount of money that is payable based on the existence of a legal duty to support. When you apply for a divorce order, it is possible to simultaneously claim maintenance from your spouse. There are two types of maintenance: spousal maintenance and child maintenance.

Child maintenance is granted under the Maintenance Act 99 of 1998 and is based on the obligation of a parent to support a minor child. This could include providing the child with housing, food, clothing, education and medical care, or providing the funds necessary to pay for these essentials.Spousal maintenance is also granted under the Maintenance Act 99 of 1998. In determining whether an order for spousal maintenance should be made, the Court will consider inter alia how long the marriage was, whether both parties earned an income during the marriage and the spouses’ respective means.

The duty to pay spousal maintenance may arise in two ways:

Settlement agreement: the Court may make in accordance with the written agreement between the parties.
Order of Court: the Court may make an order which it finds just in respect of the payment of maintenance by the one spouse to the other by considering various factors.

Prescription

Prescription is a legal principle that results in a debt or other obligation being extinguished after a certain period of time has elapsed. The Prescription Act 68 of 1969 provides for the time periods after which specific debts prescribe. Most civil claims prescribe after three years. Court orders, or judgement debts, are only prescribed after 30 years.

In the Arcus case, the SCA held that a judgement debt has three attributes:

The decision must be final and not susceptible to alteration by the Court of the first instance;
It must be definitive of the rights of the parties; and
It must be able to dispose of a substantial portion of relief claimed in the main proceedings.

Conclusion

In reaching its decision that a maintenance order is enforceable for 30 years after it is granted the SCA considered, amongst other things, that it is often vulnerable individuals who are the beneficiaries of maintenance orders. Any hardships that Mr Arcus now faces could have been avoided by complying with his maintenance responsibilities.

This judgement means that ex-spouses who struggle to enforce maintenance orders in their or their children’s favour will have many years to pursue the enforcement of the debt.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Unathi Mayekiso (Candidate Attorney)

For more information please contact or via: Savanna Kanzler at skanzler@bissets.com or via:

Switchboard: 021 441 9800

Website: www.bissets.com Bissets Whatsapp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional.

Foreign buyers

FOREIGN BUYERS: PURCHASING A PROPERTY IN SOUTH AFRICA

There is significant foreign interest in the South African property market. We have identified some useful information for foreign buyers to be aware of when considering purchasing property in South Africa.

Property can be owned by individuals or by a juristic entity such as a company, close corporation or trust. If the juristic entity is registered in a foreign country, it must also be registered in South Africa.

Ownership of land is evidenced by a Title Deed, which is issued to the owner of the property and signed by the Registrar of Deeds. In South Africa, there is a Deeds Registry in each major centre and the head office is located in Pretoria. The seller of the property will ordinarily appoint a conveyancer who will draft documents that both parties will need to sign. Thereafter, the conveyancer will prepare the Deed of Transfer and have it lodged at the Deeds Registry for registration. Ownership of the property passes on the day of registration of the Deed of Transfer.

Securing the purchase price

Purchases in South Africa are typically secured by means of a banker’s guarantee payable to the seller’s conveyancer or any third party that has been nominated by the seller or his conveyancer. Guarantees that are issued from a foreign bank are usually not accepted by a conveyancer; therefore, foreign purchasers should obtain a guarantee from a South African bank. Alternatively, the foreign purchaser can pay the full purchase price to the conveyancer, who would then invest the amount pending registration of the transfer.

Interest gained on invested funds A conveyancer will place the received funds, which exclude costs and disbursements, into a separate trust account. The interest on this investment will accrue in part to the Attorney’s Fidelity Fund and in part in accordance with the sale

agreement. If the purchaser wishes to benefit from the investment, they must ensure that provision is made for this in the sale agreement.

Exchange control

The South African Reserve Bank has imposed regulations that govern the transfer of funds in and out of South Africa, referred to as exchange control. Any funds that a non-resident has introduced into South Africa in order to purchase a property must be disclosed to the relevant South African bank. This will allow a purchaser to convey the proceeds of a future resale of the property back to their overseas bank accounts. The banks act as an agent of the South African Reserve Bank and they will endorse the title deed with “Non-Resident” as a record that the funds were introduced from overseas.

When a purchaser acquires the shares in a South African juristic entity in order to facilitate the purchase of property, they will need to have in their possession a document from any South African bank that confirms that they are transferring funds from abroad.

Mortgage finance

A purchaser who is a non-resident may borrow funds via mortgage through a South African commercial bank. This amount cannot exceed 50% of the purchase price for the property, unless it has been approved by the South African Reserve Bank. For every R1.00 deposited, you can apply for a loan of an equal amount.

Voetstoots This clause is introduced by sellers to avoid liability for latent or patent defects found on the property. It is advisable for a purchaser to inspect the property sufficiently to detect any patent or latent defects. The maxim is linked to the caveat “let the buyer beware”, thus indemnifying the seller from future damages claims if defects are discovered by the purchaser after registration. The Consumer Protection Act 68 of 2008 (“the CPA”) limits service providers or suppliers from relying on the voetstoots clause to escape liability of defects that said the supplier had been aware of but this would only occur where the CPA is applicable.

Possession

Possession of the property will typically coincide with occupation and is important because it usually entails the transfer of the benefits and risks of ownership. This means that risk can transfer to the purchaser before formal registration occurs in the Deeds Registry. We would therefore advise that a prospective purchaser should have the property insured from the date of possession.

Costs

Prospective purchasers should be aware that they are usually liable for the following costs:

Transfer fees — based on a recommended tariff that is issued by the South African Law Society
Value-added tax or transfer duty
Deeds Office levies
Pro-rata municipal rates and sectional title levies (applicable to sectional title properties only)
The costs of obtaining the rates and levy clearance certificate/s

The sale agreement should make provision for the payment of the various fees so that it is clear which party is liable.

Section 35A of Income Tax Act 58 of 1962 – Withholding Tax

There is an automatic withholding of tax which is levied by the South African Revenue Service (SARS) when a non-resident sells a property.

The following rates apply:

Natural persons – 7.5%
Companies – 10%
Trusts – 15%

These amounts are payable to SARS within 28 days after transfer for non-resident purchasers. The purchaser can apply to SARS directly for a directive which will state the exact amount of tax that is payable. When you liaise with your attorney, they will explain the relevant documents that are necessary and will be expected by SARS when applying for the directive.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Orissa Ramesar (Candidate Attorney) and Andrea Tomassichio (Associate)

For more information please contact Andrea Tomassichio at atomassichio@bissets.com or via:

Switchboard: 021 441 9800

Website: www.bissets.com Bissets Whatsapp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional

Curatorship

INCAPABLE OF MANAGING AFFAIRS?

There are several situations in life that may result in a person no longer being able to manage their financial affairs or make rational and/or informed decisions. This usually follows cases of mental illness, intellectual disability, physical disability or general ageing-related issues. The only way to assist these people is to apply for the appointment of a curator bonis or a curator ad personam.

It is fundamentally important to distinguish between a curator bonis and a curator ad personam. A curator bonis is the person who manages the finances, property, or estate of the person unable to do so because of mental or physical incapacity. A curator ad personam tends to the day-to-day needs regarding the living, care, and treatment of the Patient. The latter form of curatorship is a far greater curtailment of a person’s rights and freedoms, the court will not lightly make such an appointment unless there are exceptional circumstances.

Curators are accountable to the Master of the High Court. A curator bonis is required to furnish security to the Master of the High Court, as a guarantee for doing the job properly. Practising attorneys hold Fidelity Fund certificates that satisfy this requirement; therefore, only practising attorneys are appointed as curators (with a few rare exceptions).

The curatorship application is initiated by the application for the appointment of a curator ad litem (to investigate the need for a curator to be appointed), normally an Advocate nominated by the applicant or their attorney. The applicationshould be supported by reports of two medical practitioners who have assessed the Patient recently, and are able to attest to the extent, duration, and nature of the mental condition of the Patient and make a recommendation that a curator is, in fact, needed. Once the various assessments have been conducted and the reports have been filed with the Master of the High Court, the matter can be placed before the court for an order declaring the Patient of unsound mind and/or incapable of managing his/her own affairs. The person bringing the curatorship application or their legal representative usually recommends a curator bonis and/or a curator ad personam

who should be appointed if the court grants the above order, and they need not be the same person.

There are instances where a Patient, who has been declared to be of unsound mind and is under curatorship, may recover and no longer require the assistance of a curator. In this case, an interested party may bring an application before the court requesting the release of the Patient from curatorship. Further assessments will be conducted to determine whether the Patient is in fact capable of managing their own affairs. If that is true, the court will likely order the release from curatorship.

The above article briefly outlines the application for the appointment of a curator process. If you believe there is someone in your life who would benefit from the assistance of a curator or wishes to be released from curatorship, please contact Rifqah Omar at romar@bissets.com or via the relevant contact details below.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Chelsea Banks – Candidate Attorney

Switchboard: 021-441 9800

Website: www.bissets.com

Bissets WhatsApp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professionals

Breach of Contract

GENERAL PRINCIPLES: REMEDIES FOR BREACH OF CONTRACT

Upon concluding a contract, the parties involved are bound by the terms of the agreement. Should any of the parties not perform their part as agreed in the contract (without a lawful excuse), a breach of contract occurs. When a party has breached the terms of the agreement, the aggrieved party(ies) to the contract have a number of options available to them. These options, called remedies, usually include damages, specific performance, and contract cancellation. The available remedies are, however, also dependent on stipulated terms of the contract.

Damages

Damages are a monetary payment made by the breaching party to the aggrieved party, which usually aims to put the aggrieved party in the same position as it would have been had the breach not taken place. The damages that may be claimed include actual damages and loss of profits. The aggrieved party is only entitled to the damages that he or she can prove. Once the damages have been proved, the aggrieved party will need to quantify the damages, which can be difficult. When claiming damages, the aggrieved party should ensure that it has taken all reasonable steps to minimise its losses. This is called mitigation of damages.

Specific Performance

This remedy is a way of forcing the breaching party to perform what was agreed to in the contract. The aggrieved party will need to apply to Court for an order that will compel the breaching party to perform in terms of the contract.

Generally, the aggrieved party has the right to this remedy, but the Court does have the discretion to refuse to make such an order. For example, the Court may refuse to grant an order for specific performance if the performance is impossible. If an order for specific performance is granted by the Court and the breaching party still fails to perform, the breaching party may be held in contempt of Court.

Cancellation

If the aggrieved party wishes to cancel a contract, the most important question is whether or not the contract included a cancellation clause. If no cancellation clause exists, the aggrieved party’s right to cancel is dependent on a number of factors, including the materiality of the breach. However, if the contract includes a cancellation clause, it is easier to utilise this remedy. It is important to ensure that all aspects of the cancellation clause are complied with, including giving notice where required. If a contract is validly cancelled, each party has the duty to return what was received under the contract.

There are a number of remedies available where a breach of contract has taken place. The consequences of a breach of contract can be costly so it is important to ensure that all parties understand the terms of a contract, and are happy with what they are agreeing to, before signing the agreement.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Simthandile Cagwe (Candidate Attorney)

For more information please contact Sarah Marx at smarx@bissets.com.

Switchboard: 021 441 9800

Website: www.bissets.com Bissets Whatsapp: 072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professionals

Immovable Property Update

IMMOVABLE PROPERTY UPDATE

BUDGET 2020

Please take note that during the National Budget Speech that took place on 26 February 2020, it was announced that for the first time in 3 years, the transfer duty exemption threshold for the sale of immovable property has increased to R 1 million. This will be effective for all deeds of sale signed after 1 March 2020.

How does the law provide you with protection in your relationship?

There are a growing number of people, in South Africa and around the world, that live in long-term, intimate relationships that are akin to marriage without this relationship being formalised in law. This may be a conscious decision on behalf of the parties to avoid the consequences of marriage or it may be because the law does not provide recognition for their type of relationship. Often, the people living in these relationships expect that their relationship will have the same consequences as marriage, because of the substantive similarities, but currently in South Africa no legislation provides for this protection. The question then arises: how does the law protect potentially economically vulnerable members of these life-partnerships in a way that promotes fairness and equality?

What protection might be required?

Dividing communal property

One difficulty is determining how to divide communal property amassed during the course of the life partnership, especially when one party has been economically reliant on the other. In a marriage this situation is provided for in the type of matrimonial property system the couple agreed upon. For people involved in a life partnership, deciding how to divide the property, or whether to divide it at all, is more complicated.

Maintenance

When a marriage comes to an end, a party to the marriage can apply to court for a post-divorce maintenance order as a means of, inter alia, compensating a partner their “career sacrifice and [their] non-remunerated contribution to the family”. In a life partnership, the position in relation to an entitlement to maintenance is not as clear. A lack of protection in this regard could mean that a partner who sacrificed his career to stay at home and look after the family is left economically vulnerable at the end of his life partnership.

Intestate succession

When a person dies without a will, their estate is administrated in terms of the laws of intestate succession. Currently in South Africa, when a party to a heterosexual life partnership dies without a will, the surviving partner is not entitled to inherit. Until there is significant legal development is this regard, it is important for heterosexual partners in a life partnership to draw up a will if they wish to ensure that their partner will inherit from them.

What protection currently exists?

At the outset, it is important to note that South African law does not recognize a so-called ‘common law marriage’ that comes in being after parties have been living together after a certain period of time. In an attempt to fill the lacuna in the law for protection for people in life partnerships the South African Law Reform Commission has produced a draft of the Domestic Partnerships Bill. This Bill aims to provide the legal protection to people living in life-partnerships. Unfortunately, the legislature has yet to consider this Bill and it has not been passed or, indeed, notably progressed since it was produced in 2006.

Contract

Partners can always conclude a formal contract regulating the ownership of their property and providing protection for the situation where one partner is financially dependent on the other. It is questionable, however, to what extent a person who is already in a vulnerable position would be able to ensure sufficient protection is contracted for.

Tacit universal partnerships

Recently, the Supreme Court of Appeal (“SCA”) has been willing to infer tacit contracts between persons living in life-partnerships which allow the court to provide some protection to these individuals. These inferences are based on a strong presumption that the parties intended to deal fairly with each other. In 2012, a landmark judgement in the SCA found that a court can infer from the conduct of the parties that they tacitly concluded a universal partnership. A universal partnership is a partnership in which “the parties agree to put in common all their property, present and future”. The court described how a universal partnership must be understood in a holistic way. It noted how a partner could validly contribute to the partnership by dedicating themselves to non-commercial aspects of the partnership, like building a home and caring for the family. This means that if one partner was the breadwinner and the other provided domestic support at home, both are entitled to share in the overall value of the partnership. This ‘tacit universal partnership’ could be used for the court to make maintenance orders for parties to a life partnership and to ensure that communal property is equitably divided between the partners.

Please contact Kobus Pieterse on kpieterse@bissets.com for further information.

Savanna Kanzler | Candidate Attorney

E: skanzler@bissets.com

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Notaries: How do they differ from other attorneys?

While most legal matters can be attended to by attorneys, some matters can only be dealt with by notaries. A notary is also an attorney, but has undertaken certain further studies, passed further exams and brought an application to the High Court to be admitted as a notary.

A notary is subject to strict norms in respect of the duties involved, and is also subject to the highest degree of good faith and a standard of action and conduct which will justify the trust placed in the notary. A notary must be impartial, credible, responsible and independent.

Other attorneys make use of the services of notaries for a variety of things, such as for notarial cessions of Exclusive Use Areas, but the public will usually only require the services of a notary in very specific cases, the most notable ones being Antenuptial Contracts and the authentication of a signature or document for use abroad.

Most married couples will have an Antenuptial Contract in place. For those soon to get married, an Antenuptial Contract is an agreement that you and your fiancé enter into to arrange your matrimonial property system in such a way to suit your circumstances and to protect yourselves from creditors. This is signed by both parties in the presence of a notary, and then registered at the Deeds Office. (Click here to find out more).

The other instance when you may require the services of a notary is when documents, such as a copy of an ID or a Power of Attorney, must be sent abroad. These will usually only be accepted abroad if they have been notarised. A commissioner’s certification will in these instances not suffice. A notary, however, can prepare a certificate in which the notary confirms the authenticity of the document or the signature. In other words, the notary confirms that he saw the original document, or confirms that he verified the signatory’s identity as well as saw the signatory sign the document.

The notary’s signature is then in turn verified by the High Court by way of an apostille, and the documents are ready to be sent abroad.

As was said by Justice Solomon in 1909: “The presumption is that every statement in a notarial deed is true and that all proper solemnities have been observed by the notary.”

Lili Von Geyso | Senior Associate

E: l.vongeyso@bissets.com

Areas of Expertise: Litigation, Deceased Estates, Contractual Law, Labour Law, Notarial, Immigration Law

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Property Practitioners Bill

The Property Practitioners Bill has officially been signed by the President on 2 October 2019, however, the commencement date has not yet been decided.
The Act will replace the 43-year-old Estate Agency Affairs Act and provide for the continuation of the Estate Agency Affairs Board, to be known as the Property Practitioners Regulatory Authority (“the Authority”).

The objective of the Authority is to regulate the way Property Practitioners deal with consumers, market, manage, finance, let, and the sale and purchase of property.
Furthermore, the Authority is tasked with the education and protection of consumers from undesirable practices. Should the need arise, the Authority may appoint inspectors with powers to enter and inspect business premises and seize documents, in some instances, even without a warrant.

The Act provides for a wide definition of the word “Property Practitioner” and apart from those listed in the Estate Agency Affairs Act, now includes many other role players such as:

Commercial brokers who sell businesses;
Mortgage bond brokers;
Providers of bridging finance (unless they work for registered financial institutions);
Property valuers;
Persons doing home inspections for purchasers before a sale;
Property managers;
Agents involved in the selling of timeshare and fractional ownership;
Anyone else who facilitates or acts as intermediary with the primary purpose of bringing about a sale of a property or a business;
Employees of attorneys who act as estate agents, even though they are also covered under the Attorneys Fidelity Fund;
Persons who were Property Practitioners at the time when they committed an offence under the Act (the purpose of this is to ensure that a person is sanctioned under the Act, even after the person has left the industry).
Digital portals that publicly exhibit properties (or businesses) for sale or for rent using electronic means;
Companies that receive rentals on behalf of others.

The only exclusions from this definition are attorneys and candidate attorneys, sheriffs of the court, a person offering property practitioner services, but not in the normal course of his business, and a person selling his own property (but excluding a property developer).

In terms of the Act, a Property Practitioners Ombud will be established to consider and resolve complaints and disputes.
Complaints are to be handled in a procedurally and substantively fair, informal, economical and expeditious manner.

The current Estate Agents Fidelity Fund will continue to operate, but will now be referred to as the Property Practitioners Fidelity Fund.

In terms of the Act, a Property Practitioner who is not in possession of a valid Fidelity Fund Certificate, will not be entitled to any remuneration.
Any remuneration earned by a Property Practitioner whilst not in possession of a valid Fidelity Fund Certificate, must be returned to the person who provided the remuneration, on demand. The Fidelity Fund Certificate must be displayed in every place of business where a Property Practitioner operates. In addition, the letterheads and marketing materials of the Property Practitioner must include the prescribed sentence confirming their possession and the validity of the certificate.

The Act stipulates that a conveyancer may not pay over commission to a Property Practitioner if the conveyancer does not have a copy of the Property Practitioner’s valid Fidelity Fund Certificate on their file.
Should an agent practice without this certificate, any commission payable to such agent flowing from the conclusion of a sale agreement, must be refunded to the seller.

A further new requirement for the issue of the abovementioned certificate, is the requirement to provide a BBBEE certificate.
Apart from the costs related to procuring these certificates, there are other concerns relating to the provisions of the BBBEE Act that deem an enterprise with an annual turnover of less than R10 million to be an exempt micro-enterprise. Many smaller estate agencies fall within this category and won’t be obliged to furnish such a certificate.

All Property Practitioners must have one or more trust accounts into which their client’s money must be deposited.
Details of these accounts must be provided to the Authority as well as the details of the auditor to the accounts, if account audits are applicable.

The Act also requires that correspondence, legal agreements, copies of advertising and marketing materials must be retained for 10 years.
Fortunately, these documents may be stored electronically.

With regard to defects, a mandatory disclosure form will have to be completed by the seller/lessor and attached to all sale or lease agreements.
This applies to both commercial and residential properties. If a written mandatory disclosure form is not included, the agreement will be interpreted as if no defects or deficiencies were disclosed. Failure to comply with this requirement will result in liability towards an effected consumer and possibly a sanction by the Authority.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Why do I need a valid will?

In South Africa, a person can leave his / her assets to whoever he /she likes. This is called “freedom of testation“.

For your will to be valid it will need to be drawn up in the correct way to comply with the formalities provided for in our law.

The following are some of the more important requirements of the Wills Act 7 of 1953:

Anyone 16 years or older can make a will, provided that the person is mentally capable of appreciating the effect of what he or she is doing. The will must be in writing and must be signed by the testator or testatrix or by both in case of a joint will.

The will must be signed in the presence of two or more competent witnesses, who must be 14 years or older. The witnesses must sign the will in the presence of the testator or testatrix and of each other. A beneficiary, trustees and Executors or their spouse can’t be witnesses to a will from which they benefit.

Each page of the will must be signed by the testator/testatrix and witnesses.

Although it is not necessary to date a will for it to be valid, dating it is important to determine if it is the last will.

Oral wills and family arrangements are not recognised in our law and are not enforceable and can merely be used as guideline regarding the testator’s wishes.

Handwritten wills

In the case of a handwritten will in full or in part, it is required to be in the testator’s own handwriting. In the event that an heir or nominated executor writes the will, it will trigger intestacy and will result in an heir or executor being disqualified form inheriting or being appointed. In a case where an heir is disqualified from inheriting as a result of handwriting the testator’s will, such a beneficiary will only be able to inherit as much as they would have been entitled to in terms of intestate succession.

Must I amend my will after divorce?

If a person dies within 3 months after his or her marriage was dissolved by divorce and the deceased drafted a will before the marriage was dissolved, the ex-spouse will not inherit unless it is clear that the deceased intended to allocate a benefit to his/her ex-spouse.

What is a codicil?

A codicil is an annexure to an existing will, which is made to supplement or amend an existing will. The codicil must comply with the same requirements for a valid will.

What does an Executor do and who can I appoint as Executor?

The Executor is the person who’ll make sure that your assets are divided to your wishes according to your will. The Executor also evaluates the estate and its debts. The Executor can be your spouse, child, parent, family friend or an attorney.

The person or company so nominated will have to apply to the Master of the High Court after your death to be formally appointed by the Master to act in this capacity. If the person you choose is not a professional estate administrator then the Master will insist that the person concerned utilise the services of a professional estate administrator to attend to the work which needs to be done.

Where do I keep my will?

It is important that your original will is kept safe with a responsible person or institution, as a copy or certified copy of a will is not considered a valid will, which will result in your estate being wound up according to intestate succession.

What happens if I die without a will?

If you die without leaving a valid will, the assets in your estate will be divided according to the provisions set out by law in terms of the Intestate Succession Act. These provisions are generally fair and ensure your possessions are transferred to your spouse and children, and where applicable, to siblings, parents, and if required, then to the extended family in terms of degrees of relationship, which may not be what you want.

For more information on the drafting of Wills, please contact our Elke Herbst at e.herbst@bissets.com or call our offices on 021 441 9800.

Elke Herbst | Associate

E: e.herbst@bissets.com

Areas of Expertise: Wills | Deceased Estates | Curatorships

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Do employees have the right to practice their religion?

In a matter that was heard before the Labour Court, the employer dismissed the employee for incapacity after the employee had refused to work on Saturdays on account of her being a member of the Seventh Day Adventist Church.

The employer, who conducts business as a logistics and transport service provider, required stock-taking to be done once a month on a Saturday. The employee was employed as part of the employer’s graduate management training programme. The employer argued that it was an inherent job requirement of the employee to be able to work on Saturdays.

In considering whether something qualifies as a legitimate inherent requirement of a job, the Court stated that “[t]he test for whether a requirement is inherent or inescapable in the performance of the job is essentially a proportionality enquiry” and that “[i]n general, the requirement must be rationally connected to the performance of the job.”

The Court furthermore stated that “[t]his means that the requirement should have been adopted in a genuine and good faith belief”, that it is necessary for the “fulfilment of a legitimate work-related purpose and… [that the requirement is] reasonably necessary… [for] the accomplishment of that purpose.” The Court went further and stated that it is “the employer [who] bears the burden of proving that it is impossible to accommodate the individual employee without imposing undue hardship or insurmountable operational difficulty.”

In applying this test the Court stated that it was not persuaded that the employer could not fulfil the object of stock-taking without accommodating the employee’s religious beliefs. The Court furthermore found that “there [was] no evidence that the employer suffered any hardship at all by [the employee] being absent” during stock taking on Saturdays. The Court based this conclusion on the fact that the employee in question did not attend the Saturday stocktaking sessions for a period of twelve months and that there was no evidence before the Court that the employee’s absence in any way impacted the employer’s ability to successfully conduct the stocktaking exercise. The Court accordingly found that the dismissal was automatically unfair since the employer could not prove that the discrimination was fair in terms of the Labour Relations Act.

The Labour Appeal Court upheld the order of the Labour Court and awarded the employee the equivalent of twelve months’ compensation for the automatically unfair dismissal.

It is important for employers to be aware that dismissing an employee for incapacity due to religious reasons will not often be deemed fair in terms of the Labour Relations Act and the Constitution, even if such dismissal is motivated by a legitimate commercial rationale. It would be potentially fair if the employer can show that it would incur undue hardship in accommodating such an employee.

For advice on this topic or assistance in any matters relating to labour matters, please contact our labour law specialist Clint van Aswegen at c.vanaswegen@bissets.com.

Clint van Aswegen | Partner

E: c.vanaswegen@bissets.com

Areas of Expertise: Commercial Litigation, Civil Litigation, Property Litigation, Employment Law, Insolvency Law, Litigation / Dispute Resolution

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Who will take care of your children after your death?

The Children’s Act allows a parent who is the sole guardian or who has the sole care of a child to appoint a fit and proper person as the guardian or person or to be vested with the care of the child in the event of the death of the parent. This appointment must be contained in a will made by the parent.

A person appointed in a will acquires guardianship or care, as the case may be, in respect of a child after the death of the parent, provided that the person concerned expressly or by impliedly accepts the appointment.

If two or more persons are appointed as guardians or caregiver of the child, any one or more or all of them may accept the appointment except if the parent’s will provides otherwise.

The final decision concerning the appointment of a caregiver or guardian for a minor, whether nominated in a will or otherwise, rests with the High Court which is the upper guardian of all minor children. The guiding principle is the best interest of the child.

The child’s views must also be considered in any decision regarding the appointment of a caregiver or guardian. The Children’s Act states that every child of an age, maturity and stage of development able to participate in any matter concerning him or her has the right to do so in an appropriate way. There is no set age at which children can make their own decisions, but the older and more mature they are, the more their wishes will be considered.

For advice on the appointment of a caregiver or guardian for your minor children in your will and other issues relating to wills and succession planning, please contact our estates department professionals Roald Besselaar at r.besselaar@bissets.com or Elke Herbst at e.herbst@bissets.com.

Roald Besselaar | Partner

E: r.besselaar@bissets.com

Areas of Expertise: Conveyancing, Estate Law, Wills, Trusts, Curatorships, Property Law

Elke Herbst | Associate

E: e.herbst@bissets.com

Areas of Expertise: Wills, Deceased Estates, Curatorships

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Residential Lease Agreements

Are you considering renting out your house or flat, or perhaps just a room? Investing in a well-drafted lease agreement and knowing your rights and obligations can save you a lot of trouble in the long term.

Why you need a well-drafted lease agreement:

In order to keep costs down, many landlords resort to making use of lease agreement templates which they find online or have been recycling for many years. These templates can create a false sense of security for those using them, when in actual fact many of the provisions they contain are not legally enforceable. Often the unenforceability of certain clauses in these contracts only become apparent when the relationship sours and either party to the agreement seeks to rely on them.

A well-drafted agreement is to the benefit of both parties (i.e. the landlord and the tenant) in that it will set out each party’s rights and obligations and regulate important matters that are often forgotten such as deposits and the investment thereof, notice periods, escalations, and what constitutes breach.

We are often approached by a party to a lease agreement to resolve a costly legal issue which could have been avoided if a well-drafted lease agreement was in place from the start.

What to do if you are already leasing out your property:

Should you already be renting out your property without a written lease agreement or using an externally-sourced template agreement, the Rental Housing Act provides that certain terms are deemed to apply to the lease regardless of what may otherwise have been agreed upon by the parties. For instance, the Rental Housing Act prescribes the procedure for incoming and outgoing inspections. Failure to adhere to these provisions may result in the landlord being unable to prove or claim for damage to the property caused by the tenant.

It is also possible to reduce an oral agreement to writing or to amend an existing agreement, provided that the amendments are in accordance with the law and both parties to the agreement agree thereto.

If your current lease agreement is coming to an end or is up for renewal, it is suggested that you review the current version of your agreement and update it, where necessary.

For advice on tenancy-related issues, including the drafting and review of lease agreements, or legal representation in evictions and associated matters, contact one of our skilled attorneys today to assist you.

Clint van Aswegen | Partner

E: c.vanaswegen@bissets.com

Areas of Expertise: Commercial Litigation, Civil Litigation, Property Litigation, Employment Law, Insolvency Law, Litigation / Dispute Resolution

Lili Von Geyso | Senior Associate

E: l.vongeyso@bissets.com

Areas of Expertise: Litigation / Dispute Resolution, Deceased Estates, Contractual Law, Labour Law, Notarial, Immigration Law

Amy Van Dyk | Associate

E: a.vandyk@bissets.com

Area of Expertise: Litigation / Dispute Resolution, Deceased Estates

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Relocating to South Africa

Moving to a new country entails more than just packing your bags and boarding a plane. If you are contemplating a more permanent move to South Africa, applying for the correct visa should be at the top of your list of priorities.

If you are merely visiting South Africa, a Visitor’s Visa will be required and this type of visa is relatively easy to obtain. However, should you fall head over heels for the beauty of South Africa or a South African, you will require a longer-term visa.

A Visitor’s Visa affords you only three months in the country, although this can be extended, on application, by a maximum of three months. Unless you are comfortable with flying back and forth between your country of residence and South Africa on a regular basis, you will have to apply for a longer-term visa, or even permanent residency.

These longer-term visas each has its own specific set of requirements and hoops to jump through.

A Business Visa or Permit, for instance, can be applied for if you want to invest, or already have invested, in a business in South Africa. One of the requirements is that you invest R5 million in the business, either in the form of cash or new machinery or equipment. This is often enough to frighten off many entrepreneurs.

However, you can apply to the Department of Trade and Industry to have this requirement waived, if you can show that your business employs South Africans, creates work and will benefit the South African economy.

Alternatively, if you are in the fortunate position of already having a nest egg, you can apply for a Retirement Visa. This can be either on a temporary or permanent basis. Naturally, the requirements for permanent residency are stricter than those for a temporary permit. For instance, in order to obtain permanent residency based on retirement, you will need to prove that your monthly income is guaranteed life-long and is not capital-based. Capital-based income can be relied upon if applying for a temporary residency permit.

Should you fall in love, with a South African citizen and decide to get married, you will be able to apply for a Spousal Visa and, eventually, permanent residency as a result of your union.

Whether you want to retire in South Africa, work or start a business here, we will be able to assist you with the correct visa or permanent residency application.

In addition to this, our team of commercial and tax attorneys will assist you in complying with South Africa’s regulations in order to ensure that your business can thrive, you are tax compliant and that your financial immigration and exchange control issues are dealt with quickly and efficiently.

Lili Von Geyso |Senior Associate

E: l.vongeyso@bissets.com

Areas of Expertise: Litigation, Deceased Estates, Contractual Law, Labour Law, Notarial, Immigration Law

Henning Pieterse | Partner

E: h.pieterse@bissets.com

Areas of Expertise: Corporate & Commercial Law

Erlise Loots | Partner

E: e.loots@bissets.com

Areas of Expertise: Tax (Income Tax, Capital Gains Tax, Tax Directives re Capital Gains Withholding Taxes, Tax Clearances, and Estate Duty), Curatorships, Trusts, Estates, Exchange Control (involving remittance of funds abroad, formal emigrations, foreign investment allowances and the endorsement of title deeds), Non-resident services and advice

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Register your solar panel with the City of Cape Town

The City of Cape Town announced at the end of 2018 that the failure to register your solar panel with the City of Cape Town before 28 February 2019 may result in heavy fines being imposed, additional service fees and disconnection of electricity. The registration date has now been extended to 31 May 2019 and registration is free.

Generating electricity can be hazardous and therefore all small-scale embedded generation (SSEG) systems connected to the network of electricity are required to be approved by the City of Cape Town prior to installation.

While off-grid systems are not connected to the electricity network, they must also be declared to the City of Cape Town to verify that they are not connected to the network and are not mistakenly charged a service fee for disconnection of unauthorised supply. Solar water heaters are exempt from registration.

For more information on how to register your solar panel please visit: www.capetown.gov.za/solarpv

For more information contact:

Leanne Williams
Associate (Conveyancer)

E: l.williams@bissets.com

The impact of the Competition Amendment Act

by Caitlin Harvey

Competition law in South Africa is an area of law that aims to maintain and promote competition in the South African market. Since 1998, competition law in South Africa has been regulated by way of the Competition Act (“the Act”). It is relevant to many businesses, as companies naturally compete with each other and gain market power in the course of their business.

The Competition Commission is the governing statutory body and has the duty to investigate, control and evaluate restrictive business practices, abuse of dominant positions and mergers to achieve equity and efficiency in the South African economy.

It has the following objectives:

promoting the efficiency, adaptability and development of the economy;
providing consumers with competitive prices and product choices;
promoting employment and advancing the social and economic welfare of South Africans;
expanding opportunities for South African participation in world markets and recognising the role of foreign competition in the Republic;
ensuring that small- and medium-sized enterprises have a fair opportunity to participate in the economy; and
promoting a greater spread of ownership, in particular to increase the ownership stakes of historically disadvantaged people.

The Competition Amendment Act (“the Amendment Act”) was assented to on 13 February 2019 and has been the subject of much legal debate and controversy. The Amendment Act aims to give effect to what the Act set out to achieve for the most part, to address the on-going issues of concentration and racially-skewed ownership. It sets out to achieve this, by radically changing the provisions relating to collusion, abuse of dominance, price discrimination, administrative penalties, merger control and market enquiries.

The Amendment Act has been described as ‘giving teeth’ to the market inquiry process, as it gives the Competition Commission more power in assessing a specific market, as opposed to just the conduct of the firm in question. This will allow competition authorities to truly change the structure of a market through specific remedies.

One of the proposed new provisions deals with mergers that involve a ‘foreign acquiring firm’ and entitles the President, via a committee, to assess whether a proposed merger with a foreign acquiring firm would have ‘an adverse effect on the national security interests of the Republic’.

The introduction of the Competition Amendment Act is an interesting development that will undoubtedly have a significant impact on the way companies, both South African and foreign, conduct their business in the South African market.

For more information regarding commercial matters, please contact:

Henning Pieterse | Partner

E: h.pieterse@bissets.com

Areas of Expertise: Corporate & Commercial Law

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Capital gains tax and withholding tax for non-resident sellers

by Erlise Loots

Capital gains tax

In South Africa, a so-called capital gains tax (“CGT”) is triggered when any immovable property situated in South Africa is sold.

The net capital gain is generally calculated by deducting all deductible capital expenses relating to the property (known as “base costs”) from the selling price of the property. However, if the property was purchased before 1 October 2001, different calculation methods must be used to determine the deductible base costs and, ultimately, the net capital gain.

The result (after deduction of all base costs, exemptions and rebates) is known as the “net capital gain” and is taxable at an effective tax rate of 0–18% if the seller is a natural person.

Withholding tax

When a non-resident individual of South Africa for tax purposes disposes of an immovable property in South Africa with a value exceeding R2 million, 7.5% of the purchase price must be withheld and paid to the South African Revenue Service (“SARS”).

The 7.5% withholding tax provision is a security measure implemented by SARS to ensure payment of capital gains tax. If capital gains liability is less than the 7.5% payment to SARS, a refund would be payable by SARS upon the completion and submission of an income tax return by the non-resident seller and the assessment and verification thereof by SARS.

The timeframe for submission of an income tax return and the process to obtain a refund from SARS by a non-resident could be quite lengthy.

The alternatives to paying 7.5% withholding tax to SARS are to:

calculate the actual capital gains tax liability (in respect of the sale of the property) and to apply to SARS for a Directive that the actual tax liability be withheld and paid to SARS;
furnish security; or
apply to SARS to pay a reduced amount (or no amount) based on the extent of the assets of the non-resident seller in South Africa.

The amount paid to SARS would be deemed a self-assessment if an income tax return is not complete and submitted to SARS.

In respect of non-resident sellers whose main assets are immovable properties in South Africa, the tax directive route whereby the actual amount payable to SARS is calculated and paid to SARS often proves the best option.

For more information regarding tax matters, please contact:

Erlise Loots | Partner

E: e.loots@bissets.com

Areas of Expertise: Tax (Income Tax, Capital Gains Tax, Tax Directives re Capital Gains Withholding Taxes, Tax Clearances, and Estate Duty), Curatorships, Trusts, Estates, Exchange Control (involving remittance of funds abroad, formal emigrations, foreign investment allowances and the endorsement of title deeds), Non-resident services and advice

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Recent developments regarding parental leave in South Africa

by Bisset Boehmke McBlain

The beginning of a new year often brings with it decisions of a life-changing nature. Many couples and individuals will decide that this is the year to start a family. In South African law, major changes to parental leave were introduced to help working parents adjust to the demands of new additions to their families.

On 23 November 2018, the Labour Laws Amendment Act (“LLAA”) was signed into law by President Ramaphosa but it is not in force yet as a commencement date still has to be announced. It amends the Basic Conditions of Employment Act (BCEA), amongst other legislation.

Prior to the Act, there was no such thing as paternity leave for fathers in South African law. Fathers would use their “family responsibility” leave which was limited to a maximum of three days per one-year cycle. Fathers are now entitled to ten consecutive days’ paid parental leave after the birth of their child, as a result of the LLAA. Paid parental leave benefits will be paid by the Unemployment Insurance Fund (UIF). Employers have a discretion to provide employees with further parental benefits.

The LLAA introduced another novel concept in South African law, namely parental leave for commissioning parents. Prior to the LLAA, no provision was made for parental leave for commissioning parents in a surrogacy agreement. This led to the case of Mia v State Information Technology Agency (Pty) Ltd, where the employer was found to have unfairly discriminated against a male employee who had applied for maternity leave in terms of the employer’s maternity leave policy. The employee was in a same-sex civil union and it was agreed between him and his partner, after they had entered into a surrogacy agreement with a surrogate, that he would take on the role and responsibilities often associated with the birth mother. After applying to his employer for maternity leave benefits he was subsequently denied such benefits. His employer argued that such policy only covered female employees who had given birth. The Labour Court disagreed with the reasoning of the employer and stated that “there is no reason why an employee in the position of the applicant should not be entitled to maternity leave and equally no reason why such maternity leave should not be for the same duration as the maternity leave to which a natural mother is entitled”.

The LLAA now allows for commissioning parents in a surrogacy agreement to apply for parental leave. One parent is entitled to at least ten consecutive paid weeks’ leave and the other parent is entitled to ten consecutive paid days’ parental leave. This applies to parents who adopt a child under the age of two. The payment of adoption and surrogacy leave will similarly be paid by the UIF.

To a large extent maternity leave has remained untouched by the LLAA. The BCEA states that employees are entitled to at least four consecutive paid months’ maternity leave, which payment is received from the UIF. If the mother suffers a miscarriage in her third trimester or bears a still-born child, she will be entitled to six weeks’ paid leave after the miscarriage or still-birth.

This is a step in the right direction but there is still much progress to be made. In Sweden, for instance, parents are given paid parental leave of 480 days per child, which can be divided between the parents as they choose. Notably, South Africa is the first sub-Saharan country to introduce parental leave for fathers, as well as for commissioning and adoptive parents.

For more information regarding family matters, please contact:

Kobus Pieterse | Partner

E: k.pieterse@bissets.com

Areas of Expertise: Litigation, Family Law, Curatorship Applications

For more information regarding labour matters, please contact:

Clint van Aswegen | Partner

E: c.vanaswegen@bissets.com

Areas of Expertise: Commercial Litigation, Civil Litigation, Property Litigation, Employment Law, Insolvency Law

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

The effective cause of a sale

by Leanne Williams

The buying and selling of a property can be an intimidating and complex process. The sale process involves specialised skill and knowledge and therefore it is customary to make use of different professionals who can ensure a smooth and successful transaction. These professionals include, but are not limited to, real estate agents and conveyancing attorneys.

The sale process normally commences with the seller approaching a real estate agent to assist with finding a buyer for the seller’s property. In the competitive real estate industry and the present uncertain financial climate, the seller may choose to approach more than one real estate agent to widen the net and ensure a successful sale as soon as possible.

In situations where more than one real estate agent has been granted a mandate, it can become tricky to determine who is entitled to the commission. The concept of “effective cause” is therefore important as it is the threshold test to secure and ensure commission is earned and payable.

What is “effective cause”?

“Effective cause” is the causal link which persuades the buyer to purchase the property. Put differently, it means that through the efforts of the real estate agent a successful sale of the property was concluded and the real estate agent is therefore entitled to the commission.

Why is it important?

The importance of establishing the effective cause of a sale can be illustrated by way of an example in case law.

A real estate agent “W” introduced a purchaser “H” to a house. The house was subsequently sold to “H”. However, a different real estate agent “D” who knew that “H” was interested in the house had contacted “H” when she heard that the seller was willing to reduce the price.

Not only does this example illustrate that a real estate agent’s commission is not guaranteed, but it also leaves the seller open to the possibility of having to pay more than one real estate agent.

What qualifies as the effective cause?

The general rule can be described as “first come first served”. Or better yet, whoever introduces the purchaser to the property is usually the “effective cause” of the successful sale.

However, there are exceptions to the general rule. In practice these exceptions are often referred to as “intervening causes”. In Basil Elk Estates (Pty) Ltd v Curzon the court concluded that the first introduction by the real estate agent had been outweighed by “intervening factors”. Numerous personal factors prevented the prospective purchaser from initially concluding a sale agreement. Nine months later personal circumstances changed and the purchaser secured the necessary money and terminated his current lease. The purchaser then bought the property through a different real estate agent. The court concluded that the intervening factors were such as to make the initial introduction unimportant.

Each set of facts should be determined on its own merits. The passing of a period of time does not necessarily result in an “intervening factor”.

What can I do to protect myself?

If you are the seller:

Have the mandate checked by an attorney before you sign it.
If the mandate is an exclusive one ensure that you do not countenance offers from other real estate agents until you are satisfied that the mandate has expired.
Request a list of all persons who are introduced to the property during the mandate period and, if not an exclusive mandate, by which real estate agent(s) they were introduced.
Read the fine print in the mandate document. In many cases a prospective purchaser who is introduced during the mandate period but fails to submit a suitable offer, may be a future purchaser which could result in two sets of commission being paid.

If you are the real estate agent:

Ensure that all the statutory requirements as required by the Estate Agency Affairs Act have been met.
Ensure that the mandate is in writing.
Ensure that the mandate is comprehensive and includes the finer details, specifically the details pertaining to the commission payable.

For more information regarding property matters, please contact:

Robert Ferrandi | Partner

E: r.ferrandi@bissets.com

Areas of Expertise: Property Law & Conveyancing

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Regulation 68 Suspension

On 14th February we notified you of the impending amendments to Deeds Registries regulations dealing with the procedure for applications for replacement copies of title deeds. These were to have become effective from 25th February. Today the Chief Registrar of Deeds has issued a circular to announce that the Deeds Registries Regulations Board (the Board) has decided to suspend the implementation of the amendments to regulation 68 of the Deeds Registries Act 47 of 1937.

The amendment to regulation 68(1) provided for the application and affidavit of property owners to request a copy to replace lost or destroyed title deeds to be signed in the presence of a notary public. This has been seen to be impractical and would cause hardship to the public because special arrangements would need to be made in most cases for the signing of these documents.

Furthermore, an advertisement regarding the intention of the property owner to apply for a copy to replace the lost or destroyed title deed would also have had to be placed in the Government Gazette affording affected parties two weeks to object. Since the Government Gazette is not widely read the Board have decided to amend this regulation to provide for publication in a newspaper circulating in the area in which the property is situated.

Due to the above considerations, the amendments to regulation 68 have been suspended until further notice.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)