Litigation versus mediation

Bissets NL 2017

Litigation is the primary method of dispute resolution in the South African justice system. However, there are disadvantages attached to it, such as:

  • the adversarial nature of the process, which often leads to further conflict between the parties involved in the litigation;
  • the highly complex, costly and time-consuming nature of litigation; and
  • court rolls having become overburdened due to the rapidly increasing volume of litigation at court, resulting in long waiting periods before matters are heard at court.

As a result, alternative dispute resolution (ADR), which includes mediation, has become popular as a faster and potentially cheaper alternative to the process of litigation.

There are certain areas of law which make provision for mediation to be used as a way to resolve disputes between the parties. For instance, the Labour Relations Act (“LRA”) aims to provide simple procedures to resolve labour disputes through statutory (prescribed by law) conciliation, mediation and arbitration through the Commission for Conciliation, Mediation and Arbitration (“CCMA”) or through accredited independent ADR services.

In practice, most disputes are resolved within a non-legal context by means of informal dispute resolution processes such as negotiation and mediation.

Depending on the nature of your dispute, mediation may assist you in resolving your matter amicably, speedily, and in a more cost-effective manner, as opposed to dragging your dispute through the lengthy process of litigation.

For more information regarding litigation and alternative dispute resolution, 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)



A body corporate’s right to issue fines

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In an estate or sectional title scheme, it is challenging to ensure that everyone will stick to the conduct rules. To support a harmonious living environment, the body corporate sometimes needs to enforce the rules and issue fines to the transgressors. This raises the question of what the powers of the body corporate are, in terms of issuing and enforcing fines.

Each body corporate may choose what rules to formally incorporate into their code of conduct unless a rule is already part of the conduct rules in terms of the Sectional Titles Schemes Management Act. Any rule made and incorporated into the code of conduct has to be reasonable, fair and equally applied to all owners and residents. This is necessary to ensure that subsequent fines, based on the breach of a rule, are enforceable.

A written notification of a fine must be sent to, and received by, the owner or resident.

The correct process to be followed:

1. Complainant(s) to lodge complaint

A complaint must be lodged in writing or through an incident report to the trustees or the estate’s managing agent.

2. Notice of particulars of the complaint

The owner and the tenant, or the resident, (the offender) must be given a notice containing the particulars of the complaint as well as reasonable time to respond to the complaint. The offender must also be given enough information regarding the incident, including the rules that he or she may have broken. He or she must further be warned that if he or she persists with such conduct or contravention, a fine will be imposed.

3. Second notice

Should the offender persist with the conduct complained of, a second notice may be issued in which it is noted that the contravention is continuous or has been repeated. The offender must then be invited to a trustee meeting where he or she will be given an opportunity to present his or her case.

4. The hearing

Before a fine can be imposed, a hearing must take place. In the meeting, witnesses may be called to testify in favour of the offender and the offender may present his or her side of the story. The complainant(s) who lodged the complaint may also be cross-examined.

Once the hearing is over, the trustees must review the evidence presented by both sides and make a decision on whether or not to impose the fine.

If a fine is imposed, the amount should be reasonable, substantial and proportionate to the purpose of the penalty.

For further information regarding sectional titles schemes, 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)



Recent judgment on the placement of temporary employees by labour brokers

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The Constitutional Court recently delivered a landmark judgment regarding the placement of temporary employees by labour brokers.

It has become common practice for labour brokers to place temporary employees with clients. This often results in a situation where a temporary employee is placed with a client for an indefinite period, with no prospect of permanent employment. It also creates a conundrum for temporary employees, who are not able to bring any labour claims against the client of the labour broker, as the labour broker is regarded as the employer of the temporary employee.

The judgment by the Constitutional Court in Assign Services (Pty) Ltd v National Union of Metalworkers of South Africa and Others concerned an appeal from the Labour Appeal Court and dealt with the interpretation of Section 198A(3)(b) of the Labour Relations Act (the “LRA”).

This section of the LRA provides that, after a period of not less than three months, a temporary employee who earns below the stipulated income threshold is deemed to be the employee of the client of the labour broker.

The interpretation of this provision was brought before the courts, as the section was not clear on whether, after a period of three months, the temporary employee ceased to be an employee of the labour broker and became an employee of only the client, or whether a temporary employee became an employee of both the labour broker and the client.

The CCMA and the Labour Court considered the matter, which was then taken on appeal to the Labour Appeal Court. The Labour Appeal Court found that the client of the labour broker became the sole employer of the employee after a period of three months, and that the employee ceased to be an employee of the labour broker.

The finding of the Labour Appeal Court was upheld by the Constitutional Court. For the first three months of placement by the labour broker, the employee will remain an employee of the labour broker. Thereafter, the employee will become an employee of the client with whom he or she was placed by the labour broker. The Constitutional Court found that this finding is consistent with the spirit of Section 23(1) of the Constitution, which provides that “everyone has the right to fair labour practices”.

This ruling is expected to bring about much-needed change in the labour broker industry. Clients of labour brokers should be aware of the implications of this judgment.

For further 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)



A short overview of the implications of the National Health Insurance Bill

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The Minister of Health recently released the National Health Insurance Bill of 2018 (“NHI”) for public comment.

The NHI Bill aims to give effect to Section 27 of the Constitution that provides that everyone has the right to access to healthcare services. The State must take reasonable legislative and other steps, within its available resources, to achieve these rights.

The purpose of the NHI Bill

The main aim of the NHI Bill is to provide comprehensive healthcare services for all South Africans and residents irrespective of their ability to financially contribute to the National Health Insurance Fund (to be established). The Bill applies to public and private healthcare providers but not to military healthcare providers.

The Bill refers to a National Health Insurance Fund (“the Fund”) which will be the only public purchaser and financier of health services in South Africa. The Fund may enter into a contract on behalf of its members with healthcare providers, who are certified and accredited, to purchase healthcare services.

Who will it apply to?

The members of this Fund are South African citizens, permanent residents and their dependents. Asylum seekers and refugees who have not been granted refugee status also qualify but only for limited benefits, for example, emergency healthcare services.

How will it be funded?

At this stage of the legislative process, the Bill offers no clear insight into how the NHI will be funded. The Bill only states that the Minister of Health, in consultation with the Minister of Finance, determines the budget and allocation of revenue to the Fund on an annual basis. South Africans who already have medical aid insurance will also have to pay towards the Fund.

Will you still have the option to belong to a private medical aid?

Members of the Fund will be entitled to purchase complementary health service benefits that are not covered by the Fund through a voluntary medical insurance scheme or out of pocket, as the case may be. The impact of the NHI on private medical insurance schemes is uncertain at this time.

What is covered and how?

The NHI covers only certain healthcare services and a member may purchase services not covered by the Fund independently. The healthcare services that will be covered by the NHI are still unclear, as the definitions contained in the Bill are vague.

Members must register with a primary healthcare provider of their choice who will be the first point of call for their healthcare services. A member will not be allowed to seek the services of specialists and hospitals without first obtaining a referral from his or her healthcare provider, except in cases of emergency.

Public comment on the NHI Bill

Interested parties have three months, from the date of publication in the Government Gazette (21 June 2018), to comment on the Bill.

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)



Mandela Day

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For Mandela Day our staff pulled out all the stops to make sandwiches for Leliebloem house in Crawford.

We also collected children’s books for the Community Chest book drive, as well as dry foods and clothing for those less fortunate.

In the afternoon we delivered the sandwiches, together with juice and a personalised note for each child to Leliebloem House, and spent time with the children. They absolutely loved the personalised notes!

We look forward to making a difference each day.

Leliebloem is a registered NGO that operates as a Residential Child and Youth Care Centre for 60 children, aged from 4 years to 18 years old, from troubled families and backgrounds. The Centre offers the least restrictive environment for children who are placed via the children’s courts.

To read more about the amazing work that they do please visit their website www.leliebloem.org.za.



Bisset Boehmke McBlain recently held our annual “Vacation Week” program.

Bissets Notification

The purpose of this week is to host law students with a view to exposing them to the practical side of the law as well as to meet legal professionals in the field.

The students were given a tour of the High Court and local courts, were given an opportunity to meet counsel at the Cape Bar, and were addressed by some of our professionals from our various departments. The week ended successfully with a moot competition.

Bisset Boehmke McBlain is proud to promote the legal profession and enjoyed meeting lawyers of the future!

#futurelawyers #vacationstudents #law #passionateaboutlaw #BissetBoehmkeMcBlain



What to do when your loved ones can no longer care for themselves

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There are several situations in life which 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 ageing related issues in general.

To assist these people it is necessary to bring an application for the appointment of a curator bonis and/or a curator ad personam. It is of importance to distinguish between a curator bonis and/ or a curator ad personam

According to Roman-Dutch law, a curator bonis is a legal representative appointed by a court of law to manage the finances, property or estate of another person unable to do so because of mental or physical incapacity. A curator bonis is therefor only concerned with the financial affairs of the person.

A curator ad personam, on the other hand, is a person appointed by a court of law to manage the personal affairs of another person unable to do so because of mental or physical incapacity.  The term “ad personam” means “for the person” in Latin. A curator ad personam is therefore only concerned with the personal affairs of the person. As the appointment of a curator ad personam involves a serious curtailment of a person’s rights and freedoms, the court will not lightly make such an appointment.

A curator bonis must 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 generally appointed as curators (with a few rare exceptions).

In terms of our common law the High Court may declare a person incapable of managing his or her own affairs, and may appoint a curator to the person and/or property of such person. The procedure for this application is set out in Rule 57 of the Rules of the High Court and includes an application to court in respect of the following persons:

a) Mentally ill or mentally deficient persons;

b) Persons, who owing to physical infirmity cannot manage their own affairs; and

c) Persons declared prodigals.

Procedure for the appointment of a curator:

Initially a request for the application of curatorship is brought to the court by a person who is close to the patient. This can be a friend, family member, caregiver or even an institution.

The court is requested to make an order that the patient is declared of unsound mind and incapable of managing his / her own affairs. This is done with supporting affidavits from two medical practitioners, one of which should be a registered psychiatrist.

The court will then appoint a curator ad litem, normally an Advocate nominated by the applicant or his / her attorney, whose job is to represent the patient and compile a report on the investigation. He / she will present their findings to the Court and the Master of the High Court.

The curator ad litem will then recommend the appointment of a curator ad personam or curator bonis, and the application, together with the curator ad litem’s report is filed with the Master of the High Court, who will subsequently file a report, either supporting the appointment of a curator ad personam and/or curator bonis, or refusing such appointment.

If the Master is in support of the appointment, he will provide a list of the powers to be held by the curator. This is not a numerous clausus and would depend on the various needs of each individual patient and the various assets etc that need to be administered.

The matter will then be set down for a final order by a Judge of the High Court appointing the nominated curator. That curator will then have the legal capacity to administer the estate of the patient.

Summary of application process:

  1. Application to the High Court (founding affidavit by applicant and supporting documents).
  2. Medical reports.
  3. Appointment of curator ad litem.
  4. Curator ad litem reports to the Court.
  5. Master’s report supporting the application.
  6. Final appointment of curator bonis and/or curator ad personam.

 

Kobus Pieterse | Partner

E: k.pieterse@bissets.com

Areas of Expertise: Litigation, Family Law & Curatorship Applications

 

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)



We are married, but are you my spouse?

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Muslim marriages in general, but polygynous Muslim marriages in particular, currently do not enjoy equal protection under South African law. Whilst waiting for Parliament to enact the Muslim Marriages Bill, the courts, in a litigious piecemeal fashion, have been attempting to address the issues faced by those married in terms of Shari’ah law.

Section 2C(1) of the Wills Act of 1953 recently came under scrutiny from the courts. Section 2C(1) provides that when the descendants and surviving spouse of a deceased are to benefit in terms of a will, and the descendants renounce their right to such benefit, the surviving spouse, by operation of law, will receive the repudiated benefit.

An issue with this section arises when one tries to determine who is to be treated as a ‘surviving spouse’.  This question arose in the case of Moosa NO and Others v Harneker and Others (2017) when a Muslim husband died, leaving behind a Will in which his descendants were named to benefit, and which included the family home. The children agreed to renounce their benefit in terms of the Will. This triggered the operation of Section 2C(1), which meant that the ‘surviving spouse’ was to receive the repudiated benefit. The deceased was married to two Muslim women in terms of Shari’ah law. The deceased, in order to secure a loan from a bank in the 1980s, had subsequently married one of his wives in terms of civil law.

The Executor of the estate reflected the operations of Section 2C(1) in his liquidation and distribution account, namely that each of the two surviving spouses would receive their respective share of the immoveable property, which the Master of the High Court accepted. When the Executor attempted to register the transfer of the family home into the names of both of the wives, the Registrar of Deeds refused to register the transfer of the property into the name of the wife who was not married to the deceased in terms of civil law, but only in terms of Islamic law.

The Registrar of Deeds refused to accept that the wife married in terms of Islamic law was to be considered as a ‘surviving spouse’ in terms of the Act. The Registrar argued that no court had previously decided what was meant by surviving spouse in terms of the Act. The Registrar argued furthermore that that the Act never intended to include surviving spouses of polygynous Muslim marriages in the ambit of the definition. This was because the Act was silent as to who such a ‘surviving spouse’ is, and when it was promulgated the only legally accepted marital union was one concluded in terms of the Marriage Act. The Registrar of Deeds argued therefore that it had not been the intention of Parliament to include surviving spouses of polygynous Muslim marriages in the ambit of ‘surviving spouse’ in terms of the Act.

The Western Cape High Court agreed that at the time the Act came into effect, Parliament would only have intended to protect monogamous marriages as that was the only legally accepted form of marital union. The Court then examined the consequences of the differentiation and exclusion created by this section in terms of the Bill of Rights contained in the Constitution, namely the right to equality. The court found that Section 2C(1) was unconstitutional as it unfairly discriminated against surviving spouses of polygamous Muslim marriages, based on religion and marital status. In order to remedy this constitutional defect, the court read in (inserted) the following words at the end of section 2C (1) – “For purposes of this sub-section, a ‘surviving spouse’ includes every husband and wife of a de facto monogamous and polygynous Muslim marriage solemnised under the religion of Islam”.  It was also ordered that the Registrar of Deeds register the transfer of the property into the names of both of the deceased’s wives. On 29 June 2018 the Constitutional Court handed down a unanimous judgment confirming the earlier ruling of the Western Cape High Court.

For more information regarding Muslim marriages and Estates, please contact:


Rifqah Omar | Partner

E: r.omar@bissets.com

Areas of Expertise: Litigation, Professional Discipline Law, Muslim Personal Law, Curatorship applications and administration, Curatorships, Administration of estates

 

For more information regarding Wills and Estates, please contact:

 

Roald Besselaar | Partner

E: r.besselaar@bissets.com

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


Can the municipality disconnect my water and electricity?

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Municipalities monitor services to a property, and may cut off the supply of said services in certain circumstances. However, municipalities also have the responsibility of remaining within the legal boundaries of managing the supply of services to properties.

Accounts in arrears

If one of your municipal services is in arrears, the municipality may disconnect whatever service if there are undisputed arrears owed to any other service in connection with the related property. Before any disconnection takes place, the municipality must follow the necessary procedure.

The municipality is legally obligated to give a notice to the person responsible for the account. A minimum of 14 days written notice of termination is required for water and electricity accounts in arrears and if the notice period is shorter than 14 days, or not supplied, any disconnection is illegal. The 14-day notice gives the responsible party an opportunity to present any disputes or queries they may have regarding the account or allow them to repay the arrears.

In the event of a query lodged with the municipality

Once a query relating to the account has been lodged, the municipality may not disconnect services provided that the amount being queried is equal to the amount in arrears. In the case where the amount is less that the amount in arrears, the service may be disconnected for the undisputed amount owing.

When a query has been logged, it can only be valid as long as the monthly bill or any other related payments are being made to the respective account. If the responsible person does not make any form of payment, the service may be disconnected even if a logged query exists with the municipality.

State where the payment should go

If there is an account dispute and the responsible person makes a payment to the municipality, the municipality may choose to allocate that money to any account they wish. This means the account in need of the payment may not have the payment made into it. To curb this, the responsible person must notify the municipality, in writing, of the payments being made as well as which account they should be allocated to. This must be done before payment is made.

For more information regarding property matters, please contact:

 

Lisa Visagie | Partner

E: l.visagie@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)


What to include in a basic lease agreement

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If you are considering leasing out your property, it is important that you, as landlord, and the tenant agree on your respective rights and obligations.

A basic lease agreement should at least contain the below information, but in more detail:

  1. Basic information (who, where, what, duration)

The details of those who are party to the agreement, the address of the property being leased out, and the lease period.

  1. A deposit and other fees

The purpose of a deposit is to ensure that, should there be any damages to a property due to the tenant’s fault, they could be repaired without the landlord incurring the expenses or waiting for the tenant to pay for said damages.

Remember that the landlord is legally obligated to deposit this money into an interest-bearing account, held with a financial institution. The tenant is entitled to receive the deposit and all interest earned on the money over the period it was held for, after deduction of any damages, at the end of the lease agreement.

  1. Responsibilities, repairs and maintenance of the premises

Landlords are not able to oversee everything the tenant does, and this is where the responsibility and maintenance clause comes in. If the property’s utilities will be included in the rent, it should be stipulated and not assumed. It must be explicit who will be responsible for the general upkeep, such as mowing the lawn or cleaning the pool. An oral agreement will not suffice because if it is not in writing, it is easy to challenge in future.

  1. Subletting and limits on occupancy

All the adults who will be living on the premises should be party to the agreement; their names, details and signatures must be provided. This allows for the landlord to determine who may live on the property and serves as proof that these are the occupants that he/she has approved. Explicitly state in the agreement whether subletting is allowed or not.

  1. Rent payment

It is very important to state the rent payable, as well as annual escalation in the event of a longer lease. In addition, details regarding the amount, date on which it is to be paid, acceptable payment methods, and repercussions of failing to meet these requirements, must be included.

  1. Termination of the lease

The terms that warrant a lease to be terminated must be included in the agreement.

  1. Pets

If pets are allowed on the property, descriptive limitations and restrictions must be included.

For more information regarding lease agreements, 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)


It’s tax season – Make sure you declare your Bitcoin gains!

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Bitcoin… Ethereum… Litecoin… Dash…

You may have been trading in cryptocurrencies over the past tax year. You may also have recently sold some of your long-term cryptocurrency investments. With tax season on the horizon, it is essential that firstly you declare your gains in your tax returns, and secondly that you declare your gains correctly, to avoid potential penalties and possibly even criminal charges.

How are the gains from your cryptocurrencies taxed? The South African Reserve Bank does not regard cryptocurrencies as legal tender, nor does the Income Tax Act 58 of 1962 define “cryptocurrencies”. As a result, there appears to be confusion surrounding the taxation of cryptocurrencies.

The South African Revenue Services released a statement in April 2018 that it intends to regard the taxation of cryptocurrencies in accordance with the normal income tax rules of South African tax law.

In terms of the normal income tax rules of South African tax law, the gains from the sale of cryptocurrencies will either be taxable as a capital gain or as a revenue gain, depending on whether the cryptocurrencies were held as capital assets or revenue assets. The test applied when considering whether profits on cryptocurrencies should be taxed as revenue or capital assets will involve the taxpayer’s intention, both at the outset and whilst holding the assets/cryptocurrency. If the intention at the outset is to make a profit (amongst other things), or the intention changes so that the taxpayer has “crossed the Rubicon” by embarking on a scheme of profit-making, it is likely to be taxed as a revenue asset. If the taxpayer invests with a view to holding the cryptocurrencies long-term (similar to a long-term property investment) then the profits are likely to be taxed as a capital asset.

Beware that SARS is likely to focus their attention on the taxation of cryptocurrencies in the coming months, including exploring the use of technology to track the movement of cryptocurrencies belonging to South African tax residents.

Should you require assistance with your tax returns, or advice regarding the taxation of your cryptocurrencies, get in touch with our tax experts who will be able to assist you.

 

Erlise Loots | Partner

E: e.loots@bissets.com

Areas of Expertise: Tax, Curatorships, Trusts, Estates, Exchange Control & 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)



Some helpful advice

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  1. Prepare your property insurance in advance, to ensure that your property will be insured once it is registered in your name. This can be arranged through your bank if you will be registering a mortgage bond.
  2. When you sell your property, you may pay capital gains tax to the South African Revenue Services. You will need copies of all invoices relating to capital expenditure on the property for when you sell, as it is difficult to claim capital expenditure deductions if you do not have supporting documentation. Our tax department can assist you with calculating your capital gains tax obligations. We can also assist you with the safekeeping of your records. Visit our Tax Department here

 

Erlise Loots | Partner

E: e.loots@bissets.com

Areas of Expertise: Tax, Curatorships, Trusts, Estates, Exchange Control & Non-resident services and advice



The transfer process

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If no transfer date is specified in the agreement of sale, registration of transfer of property into the purchaser’s name can usually take place within 2-3 months after the fulfilment of any suspensive conditions (assuming that both parties perform timeously).

The seller’s conveyancer usually performs the transfer, and oversees the process. As a purchaser, you are entitled to request that your attorney also assist you in overseeing the transfer process to keep you informed along the way, even though the seller’s conveyancer will do the actual registration of transfer. Usually this will result in an extra cost for you.

The following are the usual steps in an ordinary transfer:

  1. Agreement of sale is signed.
  2. The conveyancer establishes contact with the parties and collects important information such as FICA.
  3. The conveyancer requests guarantees and/or payment of the purchase price from the purchaser to secure the purchase price.
  4. The conveyancer requests advance municipal rates clearance figures from the municipality in order to obtain a rates clearance certificate.
  5. The conveyancer prepares the transfer documentation for signature, which both parties must sign.
  6. The conveyancer requests a transfer duty receipt/ a transfer duty exemption receipt (in the event that the sale is subject to VAT) from the South African Revenue Services, which the purchaser must pay.
  7. The conveyancer requests a levy clearance certificate from the home owners association and/or body corporate (where applicable).
  8. The conveyancer prepares all documents to be lodged at the deeds office and subsequently lodges the transfer at the deeds office for registration.
  9. The deeds office examines whether all documents are in order, and if everything is in order, registration can be effected within 5-15 working days (depending on whether the deeds office is experiencing a backlog).
  10. Registration of transfer is registered, and the seller is paid.

In the event that a mortgage bond is registered over the property it will need to be cancelled on registration of transfer. If the purchaser is financing the purchase via a mortgage bond, additional steps will need to be followed and the mortgage bond will be registered simultaneously with the registration of the transfer into the purchaser’s name.

 

Robert Ferrandi | Managing Partner

E: r.ferrandi@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Carl Burger | Partner

E: c.burger@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Michelle van Wyk | Partner

E: m.vanwyk@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Lisa Visagie | Partner

E: l.visagie@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Ronél Els | Partner

E: r.els@bissets.com

Areas of Expertise: Property Law & Conveyancing



Make sure you understand the sale agreement before you sign!

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Once you have signed the sale agreement, you cannot claim ignorance of the contents of the agreement. It is highly recommended that you obtain legal advice before signing an agreement, to assist you in identifying any possible risks.

It is also preferable for the parties to annex a “defects list” to the agreement of sale when signing, as this will avoid a situation where the seller claims a defect was disclosed to the purchaser verbally, but the purchaser disputes this claim.

Ensure that you have checked whether transfer duty is applicable to the sale, or whether Value Added Tax will be levied in addition to the purchase price, which at 15% could be quite an unexpected shock.

If your agreement is subject to any suspensive conditions, it is critical that the agreement is clear as to how the suspensive conditions must be fulfilled and by when. It must also be clear when suspensive conditions are deemed to be fulfilled. Recent case law has outlined situations where the sellers and purchasers have held differing views as to what constituted fulfilment of suspensive conditions, with resultant devastating consequences, including cancellation of the sale and damages claims.

When it comes to occupation of the property, be wary of “occupation” and “possession” clauses. If the parties agree to early occupation, this should not be confused with possession of the property. In normal circumstances, possession of the property passes to the purchaser on registration of transfer.

Make sure you understand each and every clause. If you do not take care in preparing the most important part of the sale, it could result in misunderstanding, expensive litigation and disappointment.

 

Robert Ferrandi | Managing Partner

E: r.ferrandi@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Carl Burger | Partner

E: c.burger@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Michelle van Wyk | Partner

E: m.vanwyk@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Lisa Visagie | Partner

E: l.visagie@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Ronél Els | Partner

E: r.els@bissets.com

Areas of Expertise: Property Law & Conveyancing



Should I buy a residential property or a sectional title property

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Whether you should purchase a residential property or a sectional title property depends on your situation and needs. With a sectional title property, a prospective purchaser should bear in mind that upon transfer of a sectional title property, the purchaser automatically becomes a member of the body corporate and is bound by the rules of the body corporate.  Accordingly, you should familiarise yourself with the rules of the body corporate of the scheme before finalising a property purchase.

When purchasing a residential property, you should also ensure that you are aware of any restrictions and/or servitudes registered against the title deed, including whether you are obliged to become a member of a homeowners association, which should be evident from the title deed of the property.

Bear in mind that levies are payable, in addition to municipal rates charged by the local authority, if you are a member of a body corporate or a member of a homeowners association. In addition to normal levies being charged by the body corporate, special levies may be imposed by the body corporate should additional funds be required, for example, to replace the lifts of the building. You can read more about special levies here.

 

Robert Ferrandi | Managing Partner

E: r.ferrandi@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Carl Burger | Partner

E: c.burger@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Michelle van Wyk | Partner

E: m.vanwyk@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Lisa Visagie | Partner

E: l.visagie@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Ronél Els | Partner

E: r.els@bissets.com

Areas of Expertise: Property Law & Conveyancing



Should I purchase in my name, a trust or in a company?

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Normally you will purchase the property in your own name, although you may wish to consider purchasing in the name of a trust or a company. It is advisable to engage the services of your legal advisor and/or tax practitioner to explore the potential legal and tax implications of purchasing in your personal name, a trust or via a juristic person. Each person’s financial circumstances differ and therefore it is not always possible to provide generic advice. There are, for example, various tax implications involved in each of the possible options, and differing effective rates of capital gains tax for trusts, companies and individuals. There are also various legal implications when an individual, shareholder or trustee (where applicable) passes away.

 

Robert Ferrandi | Managing Partner

E: r.ferrandi@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Carl Burger | Partner

E: c.burger@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Michelle van Wyk | Partner

E: m.vanwyk@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Lisa Visagie | Partner

E: l.visagie@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Ronél Els | Partner

E: r.els@bissets.com

Areas of Expertise: Property Law & Conveyancing



Can I afford it, and what will it cost?

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This is possibly the most important question to ask before you purchase your home. There are many hidden costs involved in purchasing a property- as the saying goes, failing to plan is planning to fail! If you do not have sufficient funds to pay for all the costs of transfer of the property, including unexpected costs, you could find yourself in breach of the contract and may be liable to the seller for damages for breach of contract, as well as for the potential cancellation of the contract.

The following are usual costs to expect when purchasing a home:

  • The purchase price
  • The conveyancing fees for transfer of the property
  • The bond registration fees (note- this is in addition to the conveyancing fees, and the bond registration is usually performed by a separate firm of attorneys)
  • Transfer duty or Value Added Tax levied on the purchase price (where applicable)
  • Levy clearance fees/ home owners association clearance fees (if applicable)
  • Occupational rent (if applicable)
  • Moving costs

It is important to note that conveyancing fees are usually paid for by the purchaser. Many purchasers in the past have failed to take this into account, much to their detriment, despite having signed a sale agreement which specified the purchaser’s responsibility in this regard. Prospective purchasers are able to use our cost calculator to obtain an estimate as to likely conveyancing charges. Try our cost calculator here.

If you intend financing your property through a mortgage bond, you need to bear in mind that each bank has its own specific lending criteria before granting a mortgage bond. It is possible that you may not obtain the full home loan financing for which you applied, which is why it is best to pre-calculate your monthly bond instalments, to ensure that you can afford the repayments (Try it here).

 

Robert Ferrandi | Managing Partner

E: r.ferrandi@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Carl Burger | Partner

E: c.burger@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Michelle van Wyk | Partner

E: m.vanwyk@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Lisa Visagie | Partner

E: l.visagie@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Ronél Els | Partner

E: r.els@bissets.com

Areas of Expertise: Property Law & Conveyancing



Things to think of when buying a home

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It is exciting to purchase a home. For some, it may be the biggest investment they will ever make. It is therefore essential that all prospective purchasers plan a purchase in advance, to avoid a situation where the process becomes a stressful one.

Can I afford it, and what will it cost?

This is possibly the most important question to ask before you purchase your home. There are many hidden costs involved in purchasing a property- as the saying goes, failing to plan is planning to fail! If you do not have sufficient funds to pay for all the costs of transfer of the property, including unexpected costs, you could find yourself in breach of the contract and may be liable to the seller for damages for breach of contract, as well as for the potential cancellation of the contract.

The following are usual costs to expect when purchasing a home:

  • The purchase price
  • The conveyancing fees for transfer of the property
  • The bond registration fees (note- this is in addition to the conveyancing fees, and the bond registration is usually performed by a separate firm of attorneys)
  • Transfer duty or Value Added Tax levied on the purchase price (where applicable)
  • Levy clearance fees/ home owners association clearance fees (if applicable)
  • Occupational rent (if applicable)
  • Moving costs

It is important to note that conveyancing fees are usually paid for by the purchaser. Many purchasers in the past have failed to take this into account, much to their detriment, despite having signed a sale agreement which specified the purchaser’s responsibility in this regard. Prospective purchasers are able to use our cost calculator to obtain an estimate as to likely conveyancing charges. Try our cost calculator here.

If you intend financing your property through a mortgage bond, you need to bear in mind that each bank has its own specific lending criteria before granting a mortgage bond. It is possible that you may not obtain the full home loan financing for which you applied, which is why it is best to pre-calculate your monthly bond instalments, to ensure that you can afford the repayments (Try it here).

Should I purchase in my name, a trust or in a company?

Normally you will purchase the property in your own name, although you may wish to consider purchasing in the name of a trust or a company. It is advisable to engage the services of your legal advisor and/or tax practitioner to explore the potential legal and tax implications of purchasing in your personal name, a trust or via a juristic person. Each person’s financial circumstances differ and therefore it is not always possible to provide generic advice. There are, for example, various tax implications involved in each of the possible options, and differing effective rates of capital gains tax for trusts, companies and individuals. There are also various legal implications when an individual, shareholder or trustee (where applicable) passes away.

Should I buy a residential property or a sectional title property

Whether you should purchase a residential property or a sectional title property depends on your situation and needs. With a sectional title property, a prospective purchaser should bear in mind that upon transfer of a sectional title property, the purchaser automatically becomes a member of the body corporate and is bound by the rules of the body corporate.  Accordingly, you should familiarise yourself with the rules of the body corporate of the scheme before finalising a property purchase.

When purchasing a residential property, you should also ensure that you are aware of any restrictions and/or servitudes registered against the title deed, including whether you are obliged to become a member of a homeowners association, which should be evident from the title deed of the property.

Bear in mind that levies are payable, in addition to municipal rates charged by the local authority, if you are a member of a body corporate or a member of a homeowners association. In addition to normal levies being charged by the body corporate, special levies may be imposed by the body corporate should additional funds be required, for example, to replace the lifts of the building. You can read more about special levies here.

Make sure you understand the sale agreement before you sign!

Once you have signed the sale agreement, you cannot claim ignorance of the contents of the agreement. It is highly recommended that you obtain legal advice before signing an agreement, to assist you in identifying any possible risks.

It is also preferable for the parties to annex a “defects list” to the agreement of sale when signing, as this will avoid a situation where the seller claims a defect was disclosed to the purchaser verbally, but the purchaser disputes this claim.

Ensure that you have checked whether transfer duty is applicable to the sale, or whether Value Added Tax will be levied in addition to the purchase price, which at 15% could be quite an unexpected shock.

If your agreement is subject to any suspensive conditions, it is critical that the agreement is clear as to how the suspensive conditions must be fulfilled and by when. It must also be clear when suspensive conditions are deemed to be fulfilled. Recent case law has outlined situations where the sellers and purchasers have held differing views as to what constituted fulfilment of suspensive conditions, with resultant devastating consequences, including cancellation of the sale and damages claims.

When it comes to occupation of the property, be wary of “occupation” and “possession” clauses. If the parties agree to early occupation, this should not be confused with possession of the property. In normal circumstances, possession of the property passes to the purchaser on registration of transfer.

Make sure you understand each and every clause. If you do not take care in preparing the most important part of the sale, it could result in misunderstanding, expensive litigation and disappointment.

The transfer process

If no transfer date is specified in the agreement of sale, registration of transfer of property into the purchaser’s name can usually take place within 2-3 months after the fulfilment of any suspensive conditions (assuming that both parties perform timeously).

The seller’s conveyancer usually performs the transfer, and oversees the process. As a purchaser, you are entitled to request that your attorney also assist you in overseeing the transfer process to keep you informed along the way, even though the seller’s conveyancer will do the actual registration of transfer. Usually this will result in an extra cost for you.

The following are the usual steps in an ordinary transfer:

  1. Agreement of sale is signed.
  2. The conveyancer establishes contact with the parties and collects important information such as FICA.
  3. The conveyancer requests guarantees and/or payment of the purchase price from the purchaser to secure the purchase price.
  4. The conveyancer requests advance municipal rates clearance figures from the municipality in order to obtain a rates clearance certificate.
  5. The conveyancer prepares the transfer documentation for signature, which both parties must sign.
  6. The conveyancer requests a transfer duty receipt/ a transfer duty exemption receipt (in the event that the sale is subject to VAT) from the South African Revenue Services, which the purchaser must pay.
  7. The conveyancer requests a levy clearance certificate from the home owners association and/or body corporate (where applicable).
  8. The conveyancer prepares all documents to be lodged at the deeds office and subsequently lodges the transfer at the deeds office for registration.
  9. The deeds office examines whether all documents are in order, and if everything is in order, registration can be effected within 5-15 working days (depending on whether the deeds office is experiencing a backlog).
  10. Registration of transfer is registered, and the seller is paid.

In the event that a mortgage bond is registered over the property it will need to be cancelled on registration of transfer. If the purchaser is financing the purchase via a mortgage bond, additional steps will need to be followed and the mortgage bond will be registered simultaneously with the registration of the transfer into the purchaser’s name.

Some helpful advice

  1. Prepare your property insurance in advance, to ensure that your property will be insured once it is registered in your name. This can be arranged through your bank if you will be registering a mortgage bond.
  2. When you sell your property, you may pay capital gains tax to the South African Revenue Services. You will need copies of all invoices relating to capital expenditure on the property for when you sell, as it is difficult to claim capital expenditure deductions if you do not have supporting documentation. Our tax department can assist you with calculating your capital gains tax obligations. We can also assist you with the safekeeping of your records. Visit our Tax Department here

Read more on the following:

Contact our Property Specialists:

 

Robert Ferrandi | Managing Partner

E: r.ferrandi@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Carl Burger | Partner

E: c.burger@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Michelle van Wyk | Partner

E: m.vanwyk@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Lisa Visagie | Partner

E: l.visagie@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

 

Ronél Els | Partner

E: r.els@bissets.com

Areas of Expertise: Property Law & Conveyancing

 

Contact our Tax Specialist:

 

Erlise Loots | Partner

E: e.loots@bissets.com

Areas of Expertise: Tax, Curatorships, Trusts, Estates, Exchange Control & Non-resident services and advice



Substantial penalties for the late filing of annual financial statements

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The Companies and Intellectual Property Commission (CIPC) is tasked with ensuring that companies comply with the provisions of the Companies Act.

In terms of Section 30 of the Companies Act, a company is required to prepare its annual financial statements within six months of the end of its financial year and file it with CIPC, where applicable.

The auditors of a company’s annual financial statements are required to submit reports of any irregularities, such as failure of a company to comply with the Section 30 requirements, to CIPC through the Independent Regulatory Board for Auditors (IRBA).

In three recent instances, Reportable Irregularity reports were received by CIPC who, in turn, issued Compliance Notices to the respective companies. In all instances, these notices were ignored.

The Companies Act further gives CIPC the power to levy administrative fines against companies for specific, continuous non-compliance with provisions of the Companies Act. Accordingly, CIPC’s Corporate Disclosure Regulation and Compliance Unit applied to Court for an order against each of the non-compliant companies for the payment of an administrative fine equal to 10% of the company’s turnover during the period which the company was non-compliant. These orders were subsequently granted.

This again shows that there are serious consequences for companies who do not comply with the provisions of the Companies Act, and fail to correct their behaviour.

Should you have any questions relating to the Companies Act or related legislation, 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)



The Position of Land Reform in South Africa Today

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Land reform is a topic which is legal, political and emotional in nature. It is a topic which is relevant to all South Africans – not only those who currently own land but also for those who are looking to own land in the future. Foreigners who currently own or who are considering purchasing land in South Africa may also be affected by the path chosen by the South African government in their objective of reforming ownership of land. This article will briefly illustrate the legal developments surrounding land reform in South Africa.

In 1996, a land reform policy was formulated and adopted after the apartheid government had systematically excluded the black majority from land ownership and security of tenure. Three pillars, namely redistribution, restitution and tenure reform, currently underpin South Africa’s land reform policy. Each addresses distinct issues faced by many South Africans, yet contains its own set of challenges and limitations. This has led to the introduction of two new pieces of proposed legislation.

The first piece of proposed legislation is the Regulations of Agricultural Land Holding Bill, which will only apply in respect of agricultural land. It seeks to establish a public register containing the information of all owners of agricultural land. In order for agricultural land to be transferred from one owner to another, notification will need to be lodged with a commission to be established and known as the “Land Commission”, before the transfer can be registered. The concept of ‘land ceilings’ will be introduced, which will limit how many hectares of agricultural land may be owned by an individual.

The Bill further seeks to control how foreign owners acquire and dispose of their agricultural land. Foreign owners will be required to give the Minister of Rural Development and Land Reform the right of first refusal. If the Minister declines to purchase the land the foreign owner may then transfer the land, but only to a South African citizen. Foreigners will no longer be able to acquire ownership over agricultural land but will be able to secure long leases.

The second piece of proposed legislation is the Expropriation Bill which, if and when accepted, will replace the current Expropriation Act which was promulgated in 1975. One of the controversial issues of expropriation concerns what is meant by compensation. The current Act states that expropriation may only be done for a public purpose and the meaning of compensation hinges on a willing-buyer-willing-seller model. The Bill seeks to bring the Act in line with the Constitution which states that expropriation may happen if it is in the public’s interest, which is a wider notion than for a public purpose. The Bill states that the meaning of compensation should be what is “just and equitable, reflecting an equitable balance between the public interest and the interests of the expropriated owner”. Arguments about expropriation without compensation and the amendment of the Constitution to allow for as much, have been considered by Parliament and have led to the creation of a Joint Constitutional Review Committee to examine the propositions.

What does this mean for current agricultural land owners and those looking to buy in the future? Despite the introduction of proposed legalisation the current legal landscape regarding agricultural land ownership remains largely unchanged. On 21 May 2018 the ANC National Executive Committee announced that it will not pursue amending the Constitution itself but will rather push forward with amending current legislation through the Expropriation Bill.

Neither of the Bills has been promulgated into law (become Acts), which only then will be binding on the public. It is not clear how long this will take and one cannot be certain as to how exactly the future legal landscape regarding land reform legislation will look like as provisions of the Bills may be added, amended or deleted.

Interested parties can help shape the future of land reform in South Africa as the public may voice their concerns regarding the proposed review of section 25 of the Constitution by delivering written submissions to the Joint Constitutional Review Committee before 15 June 2018.

For more information contact us.

 

Robert Ferrandi |  Managing 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)