Russell Loftus
(Attorney & Conveyancer)
Tel: 082 6515548
Jan Watson
(Paralegal)
Tel: 011 447 1534
SERVICES
We look forward to being of service to you!
PROPERTY
“Residential and commercial
transfers, including
deceased estates, insolvent
estates and partitions.
Developments including
subdivisions, consolidations,
registration of sectional
title developments and
establishment
of townships.”
ESTATES
“Preparation of Wills and the
liquidation and distribution of
deceased estates.”
COMMERCIAL
“Agreements for the sale of
companies and close
corporations, shareholder
agreements, partnership
agreements, formation of
trusts and general contractual
work.”
ABOUT US
Loftus Law is a boutique law firm offering a wide range of property related and other services.
The firm prides itself on delivering a friendly, personal and efficient service.
Russell, as an attorney and conveyancer, has over 40 years experience, while paralegal Jan has 30
years experience. Both have extensive knowledge of all types of property transactions including
developments. The firm also helps to secure clients interests in commercial transactions, and helps
them in planning their estates.
With integrity and dedication Loftus Law endeavors to provide its clients with the very best service.
A sectional title scheme has two components: sections and common property.
Sections are owned by one or more persons. Common property is that part of a scheme that does not consist of sections but is owned by all the owners of the sections in undivided shares determined in accordance with each owner’s participation quota.
Common property may be divided into two categories: that in respect of which all owners have unrestricted use of and access to, and that which specific owners have the exclusive use of. The latter portions of the common property are known as exclusive use areas (EUAS).
The Sectional Titles Act obliges the body corporate to maintain a scheme’s common property. As EUAS are part of the common property, these areas are part of that obligation. An owner’s obligation in this regard is limited to keeping their EUA neat, clean and tidy.
Who bears the cost of the maintenance?
The Sectional Titles Schemes Management Act obliges a body corporate to charge the holder of an EUA a levy to cover the costs associated with the maintenance and repair of their EUA. A body corporate may pass the required resolution amending the scheme’s management rules, making owners directly responsible for those costs. In such a situation, the body corporate cannot also charge levies for the EUAS.
A body corporate may enter into agreements with owners regarding the liability for maintenance costs. These agreements will, however, not be binding on an owner’s successors in title until recorded in the scheme’s management rules. [...]
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As we become immersed in the digital age, so electronic communication in various forms has become a way of life.However, despite the speed of technological change and the extent to which we use technology, certain restrictions do present themselves.
A case in point is the signature of certain types of legal documents. While the average agreement or document may be signed electronically, section 4(4) of the Electronic Communications and Transactions Act, 2002 specifically provides that the Act does not apply to the signature of:
Agreements for the disposal of land. Section 2(1) of the Alienation of Land Act, 1981 stipulates that any agreement for the disposal of land in any way must be in writing for it to be valid.
Wills as defined in the Wills Act, 1953.
Bills of exchange, a good example of which would be a cheque although no longer used.
A long-term lease of immovable property in excess of 20 years.
This means the above documents cannot be signed electronically.To be valid these documents/agreements must be signed in what is known as “wet ink” i.e. ballpoint or fountain pen or similar. Failure to adhere to the wet ink requirement would render the document or agreement in question void i.e., a legal nullity. [...]
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In commercial transactions concluded by a party registered as a VAT vendor in the terms of the Value Added Tax Act, 1991 (the Act ), the vendor charges VAT at the standard rate of VAT (currently 15%) on goods or services provided by him in the course of his enterprise as a vendor.
Not all transactions concluded by a vendor attract liability for VAT. Some are exempt, such as rentals of residential property.
There is a third category in this context in which the seller vendor charges VAT but at the rate of zero percent.
The following are the elements of this type of transaction:
Both the seller and the purchaser must be registered as vendors in terms of the Act.
The subject matter of the sale must be an enterprise providing vatable goods or services which is fully functional and capable of separate operation at the time the agreement is concluded by the parties and the enterprise is taken over by the acquirer.
All the assets necessary to conduct the enterprise as a separate business must form part of that disposal.
This type of transaction frequently involves the sale of a building that is let to a third party. Such a sale is referred to as the sale of a letting enterprise. In keeping with the definition of a zero rated transaction, the tenant and the purchaser cannot be the same party for the transaction to qualify for zero rating.
The advantage to a purchaser in transactions of this kind is that he is not faced with a cash flow downside. He doesn’t have to claim an input credit in respect of the VAT he would have had to pay if the sale had been standard rated. [...]
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It often happens that an owner wants to increase the size of their apartment or home by adding extra space. This could be done by either creating a patio or extending an existing room or similar. Also possible is the erection of a free standing building on common property linked to the section in question.
As always there are legal requirements to be complied with to achieve the desired result. In legal parlance, this is known as extending your section and is governed by section 24 of the Sectional Titles Act, 1986.
The process is as follows:
The body corporate must first approve the proposed extension by way of a special resolution.
Once approved, a surveyor will draw a plan of extension of the section and submit it to the surveyor general for approval.
The owner will then instruct a conveyancer to apply to the Deeds office for the registration of the extension. The application is accompanied by the approved plan of extension together with the title deed to the section.
If the section is subject to a mortgage bond, then the application must be accompanied by the bond and an architect’s certificate that the extension will not alter the section’s participation quota (PQ) by more than 10%.
If there is a variation of the PQ exceeding 10%, all the banks who hold mortgages in the scheme must consent to the registration of the extension. There is fortunately a short method of achieving this available.
Once the extension has been registered, the registered area of the section is increased accordingly.
The increase in the area of the section increases that section’s participation quota (PQ) in the scheme ie it’s share of levies will increase. All the other PQ’s will be reduced proportionately.
If an unregistered extension to a section exists, it is essential that the owner registers the extension as there may be adverse consequences from an insurance and marketability perspective. The unregistered portions of a section are not taken into account when assessing the section’s insurance or market value. [...]
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All agreements, whether verbal or reduced to writing, have terms and conditions. The meaning and effect of the two concepts are however very often confused.
The terms of an agreement are the undertakings the parties give to each other to make up their agreement.
To use an agreement for the sale of land as an example. Terms would be the statement that it is a sale, the description of the property that is the subject of the sale, the purchase price and the method of payment, the date of occupation of the property by the purchaser, the occupational rental payable for such occupation, and similar.
A condition on the other hand is the insertion of a provision in the agreement that determines or affects the existence of that agreement.
There are two types of conditions that may be applicable:
1. Suspensive condition (also known as a condition precedent): as the name suggests, a suspensive condition is one which suspends the operation of the parties’ obligations until the happening of a specified event.
Using the sale agreement as an example, it could be made subject to the condition that the purchaser secures a loan to pay the purchase price of the property within a specified time period. Should the loan not be obtained within the agreed time period, the agreement would lapse ie fall away with neither party to it having a claim against the other arising from the conclusion of the agreement. The status of both parties at the time the agreement was concluded is then restored. This means that if the purchaser has for example paid a deposit as required by the terms of the agreement, that deposit would be refunded to him.
If on the other hand, the loan is obtained by the buyer within the agreed time, the agreement becomes unconditional retrospective to the date on which it was concluded. Both parties would then have to comply with their respective obligations as set out in the agreement.
In this context, there is an interesting concept known as the doctrine of fictional fulfillment. If the purchaser in our agreement of sale deliberately frustrates the grating of the loan applied for and that loan would have been granted were it not for the purchaser’s obstructive conduct, the condition will be deemed to have been fictionally fulfilled.
2. Resolutive condition: a resolutive condition on the other hand is one which, when fulfilled, can terminate the existence of the agreement.
The agreement can for example be made subject to the condition that a specified person does not die within a specified period. Should that event take place, the agreement will come to an end.
The agreement is valid as against both parties from the time it is concluded subject to the possibility that the resolutive condition is fulfilled. If it is fulfilled, the agreement will fail. Here too the parties’ status quo ante would be restored.
The difference between the two is, therefore, best summarised as follows: fulfillment of a suspensive condition creates an agreement while the fulfillment of a resolutive condition may terminate an agreement. [...]
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Every person has a home for legal purposes . It is the country whose governmental authority that person heeds, where he pays his taxes, where he derives state benefits etc. This is known as his country of domicile.
The term “domicile is derived from the Latin term “domicilium” which in turn comes from “domum colere”, meaning inhabit the home.Domicile is therefore your place of habitual and physical residence where are you are presumed to be present and where you have shown an intention to be present indefinitely. This principle is however complicated by the fact that residence and domicile are not always the same thing.
A person can never be without a domicile, nor can he ever have more than one domicile. Domicile may however be changed.In our law a person’s private legal status is determined by the law of the country in which he is domiciled (the lex domicilii) . By contrast in many continental legal systems a person’s legal status is determined by the law of the country of which that person is a citizen.
The following illustrate the importance of domicile apart from the issue of status:(a) the property consequences of a marriage are determined by the laws of the country in which the husband was domiciled at the time of marriage. This does not change despite any subsequent change in his domicile.(b) where someone dies without a will (intestate), succession to movable property in the deceased’s estate is governed by the law of the country in which the deceased was domiciled at the time of his death.(c) the legitimacy or otherwise of a child is determined by the law of the father’s domicile at birth,(d) an order of divorce may be granted by the court within whose jurisdiction either or both husband and wife are domiciled at the time the action is instituted.
From a practical point of view, domicile comes into play when signing a contract or agreement. A party to an agreement chooses an address at which any document relevant to the agreement may be served on him. This is known as his domicilium citandi et executandi.
Very often a residential address is chosen for this purpose with disastrous consequences if that person leaves that address. Unless his domicilium has been changed, documents can still be served on him at that address even though he no longer lives there.
In our law there are two types of domicile, domicile by operation of law and domicile of choice.(a) The Domicile Act 3/1992 provides that a person younger than 18 or someone lacking the required mental capacity to make a rational decision, cannot acquire a domicile of choice. Such persons are assigned a domicile by operation of law ie at the place at which they are most closely connected. This would necessitate a factual enquiry into the relevant circumstances.(b) Domicile of choice is acquired by a person having the necessary legal capacity to so. He would establish his presence in a particular place with the intention of being there indefinitely (this is known as the animus manendi,( the intention to remain).
The basic requirement for domicile of choice is habitual and physical presence in the intended chosen domicile. Although there is no prescribed minimum period of residence to determine if a choice has been made, a short visit may suffice if the intention to remain is present. The converse also applies. A lengthy stay in a particular place Is not necessarily automatic evidence of the animus manendi.
Length of residence is nonetheless an important yardstick in determining the issue.
A person’s presence in an intended domicile must be lawful. A prohibited immigrant cannot acquire a domicile of choice in SA even if the intention to remain is present. Similarly, a deportee from SA cannot retain SA as his domicile of choice as his intention to remain is meaningless.
Domicile of choice can only be acquired by the exercise of a person’s own free will. A member of the armed forces for example does not acquire domicile simply by being stationed in a particular place on government orders. He can however acquire domicile in that country once discharged from duty. The same would apply to members of the diplomatic service. [...]
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Contrary to popular belief, a document purporting to be a will can be regarded as a will even though the formalities required for the will to be signed as per the Wills Act, of 1953 have not been complied with.
The requirements for the valid execution of a will are:
Signature by the testator in ink ( ie not electronically)
On each page
Witnessing the testator’s signature on the last page
If the Master of the High Court, to whom deceased estates are reported, is concerned about the validity of a document purporting to be a will due to non-compliance with the formalities, he may refuse to accept it for the purposes of the Administration Estates Act, 1965, until it’s validity, has been determined by the Court. An interested party (a nominated executor or a beneficiary) may in such a case approach the High Court for a ruling on the matter.
The Master’s acceptance of a will does not automatically mean that the will is valid. It would still be open to question by interested parties.
High court judgments that have been handed down on the issue of validity generally have a common thread running through them: if the document is intended to be a will and it is clear that that was the intention of the person signing it(the testator), it should be regarded as a will.
In LOGUE vs THE MASTER 1995(1) SA (N), it was held that failure to comply with the formalities should not frustrate the genuine intention of the testator. This judgment was applied in VD MERWE vs THE MASTER 2010(6) SA 544(SCA) where it was held that the true intention of the testator must be recognized notwithstanding noncompliance with the formalities if the document was self-evidently intended to be a will.
Such self-evident intention could be gleaned from the contents of the document. In SCHNETLER vs THE MASTER 1999(4) SA 1250 (C), it was held if the document contained a reference to the testator’s assets and provided for the devolution of those assets to specified beneficiaries, it should be treated as a will.
It is clear from the various judgements that have been handed down, that the courts will take a very restrictive stance in determining whether or not a purported will should be regarded as such. The circumstances surrounding the signature of the document are crucial in making this inquiry. [...]
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SIGNATURE OF DOCUMENTS
Despite the increasing popularity of electronic signatures, certain documents still require signatures in the old-fashioned way (ie by wet ink) to ensure their compliance with the relevant statutory law.
These are:
1. Agreements for the disposal of land (The Alienation of Land Act, 1981)
2. Wills (The Wills Act, 1953)
3. Cheques(!), promissory notes and bills of exchange(The Bills of Exchange Act,1964) [...]
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Understanding the circumstances under which a lease can be terminated is crucial for landlords and tenants. Whether the lease is for a fixed term or month-to-month, various factors come into play when considering early termination.
A tenant may cancel a lease in the following situations:
1. If the lease is for a fixed term and does not provide for early termination:
(a) on the agreed expiry date without paying a penalty. Section 14 of the Consumer Protection Act, 2008 (the CPA) stipulates that the landlord must give the tenant no more than 80 days and no less than 40 days’ notice of the impending termination. The notice should also specify what changes, if any would be implemented should the parties agree to renew or extend the lease.
(b) the tenant is entitled to early termination of the lease provided 20 business days’ notice is given to the landlord.
2. The tenant is obliged to pay all outstanding rent due up to the date of cancellation. The landlord is entitled to charge a reasonable penalty for the early cancellation. Regulation 5 under the CPA sets out factors to consider in determining a reasonable fee. As a rule of thumb, 2 months’ rent plus compensation for any expenses incurred by the landlord due to the early cancellation (e.g. advertising charges) should generally suffice.
3. If the lease is for a fixed term and does provide for early cancellation, it may be terminated in compliance with those provisions.
4. If the lease is for a fixed term and there is a dispute about whether or not the tenant has the right to early termination, section 14 of the CPA should be applied.
5. If the lease is not for a fixed term (i.e. a month-to-month lease), the landlord should be given one calendar month’s notice of the tenant’s wish to terminate the agreement.
6. Irrespective of the type of lease involved, if the landlord breaches any of his obligations in terms of the lease, the tenant may cancel if the landlord fails to remedy his breach as demanded by the tenant.
The above summary applies to both residential and commercial properties. The CPA is not applicable if the tenant is a trust, a company or a close corporation. [...]
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The Sectional Titles Act of 1986 has very stringent provisions relating to the rights of certain tenants, which affect the developer’s application for the approval of his/her sectional plans and the sales of specific units.
DEVELOPERS APPLICATIONIf a developer intends to open a sectional title register in respect of a building which has, either wholly or partially, been let for residential purposes, he/she may not submit a sectional plan to the Surveyor General for approval unless:
(a) The tenants have been advised in writing of a meeting to be held at which full details of the proposed scheme will be made available, and the tenants will be notified of their rights as prospective purchasers, and
(b) A meeting was held at which all reasonable questions relating to the proposed development were put to the developer.The meeting need not be held if all the tenants confirm in writing that they know their rights and do not wish to purchase the units they occupy.
SALESIf the unit is let to a tenant who was entitled to notice as provided above, the developer may only offer that unit for sale to someone if he has first offered it for sale to the tenant. The tenant has 90 days within which to refuse the offer.If the tenant refuses the developer’s offer, the developer may not, for a period of 180 days calculated from the date on which the tenant refused the developer’s offer, sell that unit to anyone else at a price lower than that at which it was offered to the tenant, unless the tenant has been given a further 60 days in which to refuse the offer at the reduced price.
CONTRAVENTION
A contract of sale concluded in contravention of the above is void. The developer may be held criminally liable for the conclusion of such a contract.
Should such a contract be found to be void, the developer would be entitled to:
(1) Reasonable compensation from the occupier of the building for the use thereof and
(2) claim damages from anyone found to be liable for damage to the building.
A purchaser of the unit or the holder of an option to purchase that unit would be entitled to;
(3) A refund of monies paid,claim interest from the developer on any payment made in terms of that option or sale agreement,claim compensation in respect of expenses incurred in the preservation of the building, whether with or without the developer’s authority, and
(4) compensation for improvements effected with the developer’s consent, whether express or implied.
TENANT’S RIGHTSThe developer may not, from the date on which the tenant was notified of the meeting referred to above, and while the tenant continues to adhere to the terms of his lease or before the expiry of the periods of 60 and 180 days, whichever is applicable, require the tenant to vacate the unit unless he is guilty of non-payment of rent or has materially damaged the unit or has been guilty of conduct which constitutes a nuisance to other occupiers of the building.
The tenant may not be required to pay any more rent than what he was producing when he refused the developer’s first offer up to the expiry of the periods of 60 and 180 days referred to above.
It is important to note that the above protection is available to those tenants who were in occupation of the building before the developer submitted his sectional plans to the Surveyor-General for approval. A lease concluded after such submission is not hit by these provisions.
Navigating the complexities of sectional title deeds and agreements need not be complicated. Speak to us for professional guidance in this regard.
Contact Loftus Law about a Will today
Our Team:Russell Loftus (Attorney and Conveyancer)Tel 082 651 5548Email: russell@loftuslaw.co.za
Jan Watson (Paralegal)Tel 011 447 1534 | Mobile 082 560 8843Email: jan@loftuslaw.co.za [...]
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It is a common commercial practice to secure the settlement of a debtor’s indebtedness to his creditor; assets belonging to the debtor are mortgaged as security.
There are two types of mortgage available in our law :
Mortgages of immovable property, i.e. land
Mortgages of movable property, i.e. physical assets, incorporeals, intangible assets. In short, anything other than land
The latter mortgages are known as notarial bonds, which is the subject of this discussion.
Notarial bonds fall into two categories :
General notarial bond
Special notarial bond
Both are executed before a notary public and registered in the appropriate deeds registry.
REGISTRATION
Registration of a notarial bond must take place within 90 days of the date of its execution. If not, an application will have to be made to the court for an order condoning late registration.
The bond must be registered within the jurisdiction of the Deeds Registry in which the debtor resides and carries on business. In practice, this may mean registering in more than one Deeds office if the debtor’s place of business and residence are not the same.
If the debtor is a company, registration must take place within the jurisdiction of the Deeds Office in which its registered office is situated.
GENERAL NOTARIAL BOND (GNB)
A GNB is registered over all the debtor’s property, wherever it is situated, other than land
It is worth noting that section 53 of the Deeds Registries Act, 1937, specifically prohibits the registration of a mortgage bond that purports to bond all the debtor property, i.e., movable and immovable. A notarial bond may furthermore not bond immovable property
A GNB is a minimal form of security in that it is only on the debtor’s insolvency that the bondholder enjoys any preference concerning other creditors. In terms of section 102 of the Insolvency Act, 1936, the holder of a GNB is entitled to participate in the free residue in the insolvent estate ahead of the concurrent creditors.
The holder of a GNB’s status as the creditor would change if he were to perfect his security.
A GNB typically has a clause entitling the mortgagee to claim control of the assets in question in certain circumstances. The mortgagee would perfect his security by invoking the provisions of this clause.
Subject to the actual terms of the bond, this could entail the debtor voluntarily parting with control of the assets or the creditor applying to the court for an order granting the mortgagee a pledge of the assets as security. The emphasis is on legal control, not physical control or possession. He becomes a secured creditor instead of being unsecured before his security is perfected.
If it is sought to register a GNB but to exclude certain specified assets from it, the bond loses its status as a GNB and becomes a special notarial bond
SPECIAL NOTARIAL BOND (SNB)
An SNB is a mortgage of all assets belonging to the debtor that does not consist of land.
In the normal course, a mortgagee under an SNB would have to perfect his security, as mentioned above, to become a secured creditor.
However, the Security By Means of Movable Property Act, 1993 provides that if the assets are “ specified and described in the bond in a manner which renders it readily recognisable ”(Section 1(1)), on registration of the bond these assets are automatically deemed to have been pledged to the creditor. This prevents the need for formal delivery or an application to court to perfect his security. He, therefore, automatically becomes a secured creditor.
This deeming provision only applies to corporeal movables, i.e. physical, tangible assets e.g. motor vehicles, furniture and the like. Excluded are incorporeals such as inheritance or a usufruct.
THE CREDITOR AS PLEDGEE
As a holder of the pledge, the creditor is
Obliged to look after and maintain the assets that are the subject of the pledge until they have served their purpose.
Entitled to participate in the proceeds of a sale should the assets be sold at the instance of a third party.
Entitled to exercise his rights as specified in the bond if the debtor defaults in complying with his obligations in terms thereof. These could include the right to sell the assets in question subject to the debtor’s right to contest that sale on the grounds of prejudice to him. He could furthermore also agree with the debtor that he retains those assets in settlement of the debt subject to a fair value being agreed.
CONCLUSIONIt is, therefore, preferable that if a notarial bond is tendered as security for a debt, the bond be drawn to comply with the provisions of the Security using Movable Property Act. [...]
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The term “servitude” is often used in the context of the ownership of immovable property i.e. land.But what is a servitude?
In its broadest sense, a servitude is the right to use your land or a portion of it for a particular purpose. Servitudes are typically either personal or praedial.
A PERSONAL SERVITUDE, as the name suggests, is the right someone enjoys over another person’s land in his personal capacity. On the death of the holder of that right, the servitude lapses. The right is not transmissible.Common examples of personal servitudes are:
Habitatio: The right to live on another’s land.
Usufruct: The right to use the land and receive the fruits of it, e.g. rent( a usufruct may also be granted over movable property, e.g. a herd of cows)
Usus: The right to use the land.
An essential requirement of the above servitudes is that the holder of the right is obliged to take care of and maintain the property that is the subject of the right.
Personal servitudes may be created by agreement between the parties. Their agreement is recorded in a document known as a notarial deed because it is signed (executed) before a notary public.
The holder of the right’s interests is protected by the registration of the notarial deed in the relevant deeds office. The owner or the land’s title deed is endorsed, indicating that the land is subject to that right.
As mentioned above, personal servitude lapses on the holder’s death of that right. It is not possible to endow that right to one’s heirs.A personal servitude may also, and often is, be created in a will. In these situations, registration of a notarial deed is not a requirement.
A PRAEDIAL SERVITUDE, on the other hand, is the right an owner of one piece of land enjoys over land belonging to someone else. As the right attaches to land, it exists irrespective of any change in ownership of either piece of land.
As praedial servitudes involve two (or more) pieces of land, the property enjoying the benefit of the servitude is known as the dominant tenement, while the other property is known as the servient tenement.
Examples of these servitudes are:
Right of way: the right to cross over another’s land to gain access to, say, a road.
Encroachment servitude: very often, structures on land are built in such a way that they cross over the boundary onto the neighbour’s property. To avoid demolishing the structure, the owner of the neighbouring property grants to the first owner an encroachment servitude over that part of his property affected by the building.
Water servitude: the right of the dominant owner to draw water from the servient land or to water cattle on the servient land.
Grazing servitude: the right to graze cattle on the servient tenement.
By definition, these servitudes are generally created by agreement between the owners of the two tenements. As in the case of personal servitudes affecting land, the party’s agreement is recorded in a notarial deed and registered against the title deeds to both properties.
Registration is not automatic because if the servient tenement is mortgaged, the mortgage holder has to consent to the registration. The servitude might adversely affect the value of his security.
An exception to the need for agreement between the parties is a right-of-way servitude known as a way of necessity (via necessitatis). This is a right claimed by an owner of land that is landlocked and has no direct or reasonable access to a public road other than over his neighbour’s property. As the name suggests, it is a question of necessity and cannot be claimed for frivolous reasons, e.g. to create a shortcut to a public road.
Prandial servitudes may also be created by statute, e.g. the Sectional Titles Act 1986 provides implied servitudes of support between buildings.
A local authority’s consent to the subdivision of a property or the establishment of a township invariably allows municipal servitudes to be registered in favour of that local authority. The owner of an affected property is not obliged to consent to this.
An interesting way a praedial servitude may be acquired is by prescription in terms of the Prescription Act, 1969 (known as acquisitive prescription).
If you have been openly (nec vi nec clam nec precario) and for an uninterrupted period of 30 years crossing your neighbour’s land, you may claim a servitude of right of way. This invariably involves an application to the court for an order to that effect, as claims of this kind are usually resisted by the servient owner!
The dominant owner is obliged to exercise the right granted to him to not interfere with the servient owner’s rights of ownership.
Praedial servitudes may be cancelled inter alia as follows:
By agreement between the owners of the two properties. Their agreement would also be embodied in a notarial deed, which is registered in the deeds office.
If either owner acquires the other’s property. This is by the principle that you cannot have a servitude over your property (Nulli res sua servit)
If registered for a limited time and that period expires.
By order of court in specific circumstances.
Both personal and praedial servitudes may be granted subject to the payment of consideration by the grantee of that right.
While servitudes may appear to be a form of ownership, this is untrue. A servitude is simply a right of use of another’s property. [...]
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You’ve just built your home on a hill overlooking a valley that has a stream running through it. You have a beautiful view of the valley and the stream in particular from the patio of your house. Paradise on earth.One day while relaxing on your patio you see evidence of building construction work lower down the hill. You investigate more closely and conclude that when the structure in question has been completed, it will obstruct the view you have come to love and enjoy.Can you do anything to protect your view?Our law as it currently stands does not provide an automatic entitlement to that viewThe only way in which you could protect your view is to show that the proposed development contravenes either an existing servitude, a restrictive condition of title or the provisions of a town planning scheme.However should this lifeline not be available to you, the proposed development could be attacked on the grounds that the local authority’s approval was defective.The National Building Regulations and Building Standards Act, 1977 is the applicable law in these circumstances.The Act provides inter alia for:The prior approval by the relevant local authority of the erection of any permanent structure.
The appointment of a building control officer to process the application for approval.
The approval of the proposed structure if it complies with any applicable legislation.
The refusal of the application if the local authority is satisfied that the new structure will disfigure the area in which it is to be built, it will be unsightly or objectionable or its erection will detract from the value of adjoining or neighbouring properties or that it will be dangerous. (section 7 (1)(b))
The lapsing of the approval if building work has not been started within 12 months.However, the implementation of section 7 is not without its problems, especially in the context of a landowner’s purported right to a view.The courts have in a number of judgements pronounced on issues in this regard which include:What is market value?
How does the view enjoyed by an owner impact on his property’s market value?
Should a local authority take a third party’s loss of view into account in applying section 7(1)(b)?
When will a view enhance a property’s value?Reference to the undermentioned judgements will show that our law is not entirely settled on this subject: Paola vs Jeeva NO 2004(1) SA 396 (SCA)Clark vs Faraday 2004(4) 564(C).True Motives 84 Pty Ltd vs Madhi 2009 (4) SA 153 (SCA)Muller NO vs City of Cape Town 2006(5) SA 415 (C)Waterhouse Properties CC vs Hyperception Properties 572 CC(2198/04)(2004)ZAFSC 97Camps Bay Residents and Rate Payers Association vs Augoustides 2009 (6) 190 (WCC)Searle vs Mossel Bay Municipality(1237/09) (2009)ZAWCHC 10 Walele vs City of Cape Town 2008 (6 )SA 129(CC)If you were to acquire a property with a great view and the theoretical possibility exists that your view may be lost due to a neighbour’s development, your best course of action would be to first check if any servitudes or restrictive conditions of title exist that could be relied on to protect your view should it become necessary. [...]
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An agreement for the purchase of a property from a deceased estate cannot be concluded unless and until an estate representative has been appointed. The representative in this context is the executor who is usually nominated in the deceased’s will to act as such.Once a deceased estate has been reported to the Master of the High Court (the Master), the executor is appointed by the Master by issuing to the nominated executor letters of executorship authorizing him to act in that capacity on behalf of the estate.If an agreement for the sale of a property is signed by the person nominated to be the executor in the estate but before he has been formally appointed by the issue of letters of executorship, that agreement is void and of no legal effect.Having sold the property, the executor cannot pass the transfer thereof to the purchaser without a certificate from the Master that there is no objection to that transfer. This is provided for in section 42(2)of the Administration of Estates Act 1965The certificate is endorsed by the Master on the power of attorney to pass the transfer of the property(This power of attorney is submitted to the Registrar of Deeds along with the other documents required to pass the transfer)Section 47 of the Act provides that the executor must sell the assets in the estate(with certain exceptions) on terms and conditions as approved by the heirs in the estate. However if an heir is a minor or if the heirs cannot agree on the method and the terms of the sale, application must be made to the Master for his approval of the intended sale.If the deceased’s will specifically provides how a property should be sold and the executor sells it as prescribed, neither the Master nor the heirs are required to approve that sale.This also applies to the case if the will gives the executor complete discretion as to how the property should be sold.Notwithstanding the situations where the master’s approval is not required as mentioned above, the section 42(2) certificate is still required by the Registrar of Deeds to pass the transfer of the property. [...]
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In the context of property developments and sales the term “occupancy certificate” is often referred to.
The applicable law is the National Building Regulations and Building Standards Act 103 /1977What is an occupancy certificate (also known as a certificate of occupancy or a use certificate )?Before a building on a property may be erected, the owner has to prepare building plans showing the proposed structure to be erected on the property. These plans are submitted to the local authority within whose jurisdiction the property in question falls.Once the plans have been approved construction of the building may commence.After the building has been completed, the owner or any other person having an interest in the property may apply to the local authority for the issue of an occupancy certificate.The certificate in essence confirms that the building has been erected in accordance with the terms of the local authority’s approval of the building plans approved by it, that it has been inspected and that it meets the minimum standards for habitation.A certificate cannot be issued unless the local authority has been provided with :A certificate that the electrical wiring and all electrical installations on the property are legally compliant
Certificates that the structural system, fire protection system and the fire installation system have been designed and installed in accordance with the terms of the approval of the building plansA building may not be occupied before an occupancy certificate has been issued.Apart from the occupancy issue, there are other disadvantages to not having the certificate eg insurance cover may be difficult to obtain, mortgage finance will not be readily available, water and electrical connections may not be possible. The issue of a certificate is not a certificate that the building is free of defects. Its practical effect is that it is safe for habitation. Other enquiries regarding defects would have to be made.The above also applies to renovations or additions to existing buildings. [...]
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“Prenup” is a term often used in movies and the American media. It is an abbreviation of the phrase” pre-nuptial agreement”. It is a reference to an agreement we know as an antenuptial contract, commonly referred to as an ANC, being an agreement entered into between two people who are about to get married, regulating ownership of their respective estates during their marriage.A typical ANC provides for each party to that marriage to retain exclusive ownership of all assets brought into the marriage by him/her and any assets acquired by him/her during the marriage. This retention of ownership includes the right to deal with those assets in any way whatsoever without the consent of that party’s husband or wife, as the case may be.This system worked well for many years, especially in situations where both the husband and the wife had estates of approximate equal value. This meant that, in the case of divorce, the parties would be negotiating on equal terms.However in many marriages in the old days, one would have situations where the husband was the sole breadwinner and the wife was unemployed and stayed at home rearing the children. When marriages like this ended in divorce, the wife found herself in a very precarious position having no assets to fall back on and having only meagre maintenance payments from her ex-husband to keep her going. Assuming, of course, the ex-husband actually honoured his obligations towards her!The Matrimonial Property Act which became law on 1 November 1984 came to the rescue.The Act provides for a marriage out of community of property to automatically be subject to the accrual system unless the parties specifically agree otherwise in their ANC.If the accrual system is applicable, on the dissolution of a marriage, whether by death or divorce, the value of each estate would be determined. The estate that accrued the greatest net value since the date of marriage would have that accrued value divided by two and the amount so arrived at would be due to the other spouse.Donations between spouses during the subsistence of their marriage are not taken into account in determining the accrual. This also applies to inheritances, but this restriction may be excluded by agreement.At the time the ANC is signed, the parties would typically agree on the commencement values of their respective estate. These values would be recorded in the ANC.The accrual system provides for a much fairer situation where the wife did not earn an income at all. She would be entitled to 50% of the accrued value of her husband’s estate, which in practical terms is very similar to a marriage in a community of property. [...]
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A problem that often occurs with neighbouring properties is that of encroachment.By definition, an encroachment is very seldom if ever a deliberate intrusion onto the land or property of another. It may however arise because of negligence on the part of the encroaching owner.Encroachments can be divided into the following categories :Encroachments by buildings being (a)overhanging or protruding building works that don’t actually touch the affected land(b) insignificant parts of buildings or structures that actually attach to the other property but by a very small margin. This could be either on or above the ground.(c) large parts of a building or an entire building being erected on the neighbouring propertyEncroaching trees and plants which is very similar to building works that do not come into contact with the affected land.Encroachment on rights i.e. where a property owner in putting his property to a particular use or fails to do so, breaches the terms of an agreement reached with his neighbour or acts in contravention of applicable legislation.What follows below is an overview of the remedies open to an owner affected by an encroachment.1(a) Our law would probably treat this type of encroachment as a nuisance for which a court would issue an interdict stopping the building work constituting the encroachment or order its removal. It could also grant a compensation order for the damage caused by the encroachment because of the impossibility or difficulty of removing it. As the encroachment has as its source the neighbouring property, the affected owner would be unable to remove it himself 1(b) An example of this would be where an underground foundation extends into the neighbouring land by a very short distance. The court would in all likelihood grant a compensation order rather than an order compelling its removal because of the negligible effect the encroachment has on the other land.1(c) It is a principle of our law that if a structure is erected on land, that structure accedes to and becomes part of that land. A court may accordingly in these situations order the transfer of that land to the encroaching owner. This may be accompanied by an order for compensation. In making an appropriate order the court would take into account factors such as justice, equity and legal practicality.2. The encroachment arises from the fact that the overhanging ranches constitute an intrusion into the airspace above the affected property. In contrast with the remedy available under 1(a), the offended owner may remove branches from an overhanging tree if the owner thereof fails to do so despite a request to that effect. The court may grant an interdict preventing the encroaching owner from allowing his trees or plants to overhang the neighbouring property.If the affected owner removes the branches, he may only keep those branches if the encroaching owner has no interest in doing so. He is also not entitled to ask the encroaching owner to remove the overhanging branches that have been cut off if the owner of the affected land has removed them.An affected owner fails to exercise his rights at his peril. If the affected owner does not ask for the removal of the offending branches and does not remove them himself, and the owner of the offending tree does not remove them despite the request, the affected owner cannot ask the other owner to remove fallen leaves, branches and the like that fall onto his land from the tree!3. In a 2008 Eastern Cape case the court was faced with a complaint by an owner that his neighbour was using his property in contravention of certain restrictive conditions of title. The court held that damages was not an appropriate remedy and ordered the removal of the offending structures instead.Encroachments can in most cases be settled by the parties involved. Failure to reach an agreement or the complexity of the circumstances may force the parties to approach the court for relief. [...]
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The inescapable reality of property ownership is that damage to it can and does occur. Who is liable when that occurs?In the case of freehold property i.e. homes that are not part of a sectional title development, the answer is straightforward. The owner is responsible for the maintenance and upkeep of the entire structure built on his property, both the inside and the outside thereof.Cluster developments invariably have homeowners associations who are responsible for the management of the development. These associations bear no responsibility for the maintenance of homes in the development or for any damage that may occur to them.The sectional title scenario is very different.The general rule is that the body corporate of a sectional title scheme, managed by the trustees, is responsible for the maintenance and upkeep of the common property in that scheme.What is common property?Common property is the land and buildings that don’t form part of the sections in the scheme. It also includes the exterior of sections i.e. walls and roofs. Usual maintenance of this part of the common property would include repairs to leaking roofs or the repainting of the outside walls.The interior of a section, on the other hand, is the owner’s sole responsibility. The cost of repairing any damage to it would be for his account.What is the position if a roof leak and the interior of that section is damaged as a result of that leak?The owner would not be responsible for repairing the damage to the inside of his section if it is shown that the damage he suffered was the direct result of that leak(resultant loss). The cost of those repairs would then be for the body corporate’s account. The damage is treated as being directly linked to a defect for which the body corporate is responsible.Assume an owner who has had a roof leak repaired by the body corporate, subsequently claims he has suffered loss as a result of that damage (consequential loss), for example, an expensive artwork was warped as a result of water leaking down the wall.The Sectional Titles Schemes Management Act does not define consequential loss nor does it prescribe who is liable for such loss. One must therefore look to the common law for the answer.The enquiry then is: was there a causal connection between the leaking roof and the damage to the painting? If the answer is yes, the body corporate is liable.If the connection cannot be established the owner would have to carry the costs of repairing the painting.Both the owner and the body corporate may of course find relief in insurance cover that may exist in respect of the section or its interior. [...]
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A will is an essential legal document that allows you to decide how your assets will be distributed after your death. However, not all wills are valid. Several factors can render a will invalid or limit the freedom of a testator‘s disposition of their estate. Here’s what you need to know to ensure your will is valid.Invalid willsTo be valid, a will must meet certain formalities and capacity requirements. The person creating the will (the testator) must have the necessary intention to make a will (animus testandi), and the will must be executed in accordance with the prescribed requirements. The latter includes signing the will and having it witnessed by at least two competent witnesses who are not beneficiaries of the will.Fraud, coercion, or undue influence can also invalidate a will. If a beneficiary, for example, coerced or unduly influenced the testator into including or excluding certain provisions, the will may be invalid. Proving fraud, duress, or undue influence can be challenging, and each case is determined based on its particular facts.Limitations on valid willsEven if a will is valid, certain limitations can impact its effectiveness. These include the following:Beneficiaries who are incapable of taking a benefit under a will, such as an unworthy person who intentionally or recklessly caused the testator’s death.
Dispositions that are unenforceable, illegal, against public policy, impossible, uncertain, or subject to an unfulfilled condition. For instance, a will cannot contain a provision that aims to break up a marriage or is discriminatory.
Inadequate provisions for the maintenance and education of the testator’s minor children or surviving spouse.
Claims against the estate by a surviving spouse in a marriage out of community of property with the accrual system.
Breach of limitations on fideicommissary dispositions.
Revocation of a will before death by the testator or the creation of a subsequent will or codicil.
Beneficiary addiation is the acceptance of the inheritance by the beneficiary. If a beneficiary fails to adiate, they will not be entitled to their inheritance.Additional ConsiderationsTestators and drafters of the will should consider their circumstances and seek legal advice to ensure their will meets all requirements. For example, if you have minor children or a surviving spouse, you must provide adequately for their maintenance and education.Always keep in mindCreating a valid will is essential to ensure your assets are distributed according to your wishes after death. However, several factors can render a will invalid or limit the freedom of a testator’s disposition of their estate. Understanding the grounds for invalidity and limitations on valid wills is critical to creating a legally sound and effective will. Seek legal advice to ensure your will meets all requirements.Contact Loftus Law about a Will todayIf you’re unsure about the legal processes behind attaining a Will, then please feel free to give us a ring!Our team prides itself on friendly, effective, and reliable customer service. Whatever legal advice you may need, our professional attorneys will provide valuable insight into the legal process while maintaining a fluid and dynamic relationship with you. [...]
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What is a phased development?A phased development is one in which the developer registers a sectional title scheme in stages as opposed to registering the entire scheme at once.The procedure and requirements for a phased development are set out in section 25 of the Sectional Titles Act 1986. What follows below is a general overview of the concept and its implementation.Phased development has distinct commercial advantages for a developer. He might decide to register the scheme with just two units. Having sold and transferred the two units, he uses the income generated from the sales to fund the next stage of the development and further stages thereafter.How does a developer acquire the right to register a scheme in phases?When the developer applies to the registrar of a deed, with the assistance of his conveyancer, s for the registration of the sectional plan showing the first phase of his development, he also reserves to himself the right to extend the scheme by the erection of buildings on designated parts of the common property. This is generally referred to as a right to extend.As part of his reservation, he submits a plan drawn to scale showing the buildings he intends to erect, their position on the common property, all relevant dimensions, and in particular how these buildings will be divided into sections.The developer is obliged to erect further buildings in accordance with the plans submitted at the time the right is reserved. The general rule is that no deviation from these plans is permitted. Deviations from these plans have however been permitted where developers have shown that market conditions have changed and that the deviation is necessary for commercial reasons.The developer’s right to extend his scheme is recorded by the issue to him by the registrar of deeds of a certificate of real right at the time the sectional plan is registered. This certificate will contain details of the period within which the right is to be exercised.Failure to reserve or exercise the right.If a developer does not reserve the right to extend, the body corporate may apply to the registrar for the issue to it of a certificate of real right entitling it to extend the scheme. The body corporate may exercise that right or transfer it to a third party, if all members of the body corporate and banks who hold bonds over the various units comprising the scheme have given their consent. If the developer has reserved the right to extend to himself and fails to exercise it within the time period specified in his certificate of real right, the right to lapses. The right to extend then vests in the body corporate of the scheme.How is the right to extend exercised?The developer applies to the registrar of deeds for the registration of a plan of extension and the issue of title deeds to him in respect of the sections shown on the plan of extension. The developer’s bankers are required to consent to this registration if the right to extend is mortgaged.Sale agreementsA developer is obliged to disclose the existence of a right to extend or his intention to apply for the right, as the case may be, in any sale agreement relating to a unit in the scheme. Failure to make the disclosure will entitle the purchaser to withdraw from the sale with obvious negative consequences for the developer. A purchaser may however elect to continue with the transaction despite the developer’s failure to make the disclosure.Can a right to extend be mortgaged?The Sectional Titles Act specifically provides that a right to extend is immovable property. It may therefore be used as mortgage security.Can a developer transfer his right to extend to a third party?The right to extend may be transferred to a third party. This is done by way of a cession executed before a notary and registered in the deeds office. [...]
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What happens if you die without leaving a will viz without legally acceptable directions as to who your estate should go to? In this situation, you will be regarded as having died intestate.Fortunately, the law provides a formula as to how your estate should devolve in these circumstances. This is contained in the Intestate Succession Act, of 1967.The order of succession is set out in the Act as follows :If you leave a husband or a wife (spouse) but no children, your spouse will inherit your entire estate.If you leave children but no spouse, your children will share their entire estate.If you leave a spouse and children, your spouse would inherit the greater of a child’s share in your estate or R 250 000.A child’s share is determined by dividing the number of children plus one into the gross value of the estate. If there were 5 children and the estate is worth R 500 000, you would divide R 500 000 by 6 (5 children plus spouse) =R 83 333. As R 83 333 is less than R 250 000, your spouse will inherit R 250 000 and the children the balance, also amounting to R 250 000 to total R 500 000.If you died not leaving a spouse or children, and both of your parents were still alive, they would inherit your estate in equal shares. If you died with one of your parents still alive, that parent would inherit 50% of your estate. The other 50% would go to the children of the deceased parent(brothers and sisters). If the deceased parent had no children, that 50% would also go to the surviving parent.If you had no spouse, children, or parents that were still alive, 50% would go to the descendants of that parent related to you through your father or mother as the case may be (brothers and sisters). The other 50% would be dealt with similarly.If only one predeceased parent left children as per 5 above, those children would inherit the entire estate. If you did not leave a spouse, children, or parents and there were no descendants of those parents, your nearest blood relative/s would inherit the entire estate.If you did not leave relatives of any kind, your estate would be forfeited to the State!What about illegitimate and adopted children?For the purposes of the Act, illegitimate children are treated the same as legitimate children. An adopted child is treated as the descendant of the adoptive parent, not the natural parent. He may be regarded as the descendant of the natural parent only if the natural parent is also the adoptive parent or if the natural parent is married to the adoptive parent.It will be clear from the above that if the Act was applicable and there is bad blood in the family, the situation could become very awkward. Ensuring you have a will should therefore be a top priority! [...]
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The formalities for the signature (also referred to as execution) of Wills are laid down in the Wills Act No 7/1953:For obvious reasons, a will cannot be a verbal instruction or record. It must be in writing.
The last page of the will must be signed by the person making the will(the testator/testatrix).
His/her signature must be witnessed by two people who are not mentioned or referred to anywhere in the will. The reason for the prohibition is to avoid conflict between interested parties after the deceased’s death.
The will may be witnessed by anyone who is 14 years or older.
To assist in the resolution of any problems later, it is advisable to have each witness provide his identity number and address.
If the will consists of 2 or more pages, the testator is required to sign each additional pageThe testator’s signature must be in the original made in ink. A copy will not suffice.In addition, despite the increasing popularity of electronic signatures, such a signature will also not comply with the requirements of the Act. But given the speed of technological change, the law may well end up being amended in this regard.If the testator’s signature to a will takes the form of a mark, this will be regarded as compliant with the Act provided a commissioner of oaths certifies on the document that he has satisfied himself as to the identity of the testator.The above also applies to any changes to a will by way of deletion of words, phrases or paragraphs, etc.It may happen that a will does not comply with the formalities prescribed by the Act, for example where the testator’s signature was not witnessed. The High Court has in the past had to make rulings in cases like this. The general thrust of their decisions has been that the will should be accepted if the surrounding circumstances show unequivocally that the document in question was without a doubt intended to be the deceased’s will.It is obviously better to ensure that the formalities are complied with! [...]
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Effective from February 2022, the Property Practitioners Act is the successor to the Estate Agency Affairs Act 1976 which has been repealed. The Estate Agency Affairs Board has been replaced by the Property Practitioners Regulatory Authority.
What are the effects and applications?
It applies to immovable property generally, i.e. to both residential and commercial property and includes rights therein such as timeshare and fractional ownership. No distinction is drawn between new developments and pre-owned property.
It affects anybody involved in the selling, letting, financing, purchase, promotion, and management of property This includes natural persons, companies, close corporations, associations and trusts and anyone employed by or connected to such entities.
Exceptions to this are:
Attorneys
Persons who do not partake in these activities in the normal course of business.
Anyone doing so in his personal capacity.
The Act has in it a number of provisions affecting property practitioners’ business activities which are not dissimilar to those contained in the old Act.
Some examples :
Every practitioner is obliged to have a fidelity fund certificate which is to be displayed wherever he conducts his business. Every agreement brokered by a practitioner must have in it a clause guaranteeing the validity of his certificate. The certificate must be applied for every three years.
Trust accounts are compulsory. The Minister may in certain circumstances exempt a practitioner from complying with this provision
All documents relating to any transaction in which a practitioner was involved must be retained for no less than 5 years. This includes communications with the regulatory authority.
Candidate property practitioners (formerly interns) may not complete a document or a clause in a document conferring a mandate on a practitioner or relating to the sale or lease of a property. Contravention of this provision may cause a practitioner to forfeit his right to the payment of the selling commission.
A conveyancer may not pay a selling commission to a practitioner unless he has first been given a certified copy of the practitioner’s fidelity fund certificate. A consumer may not be debited with the cost of the preparation of an offer to purchase or an offer to let a property.
There are three important provisions in the Act relating to consumer protection :
A seller or lessor is obliged to sign a full disclosure regarding defects in the property being sold or let. A practitioner may not accept a mandate to sell or let a property unless he has been provided with the signed disclosure form. The practitioner must furthermore put the proposed purchaser or tenant in possession of the signed form before an offer to buy or rent is made.
If a seller accepts an Offer To Purchase (OTP) without the signed disclosure being attached to it as an annexure, the seller is regarded as not having disclosed any defects to the purchaser.
This means that the seller cannot rely on the voetstoots clause in the offer and he would have to make good any defects found to be in the property.
The converse is that if the offer has a voetstoots clause in it and a signed disclosure is attached, the normal voetstoots rules apply.
A purchaser or tenant is fully entitled to commission their own inspection of the property.
A practitioner’s failure to comply with this requirement may expose him to legal action by the buyer.
A practitioner may not encourage or oblige a consumer to use the services of a particular service provider. This includes an attorney.
This raises some interesting, potentially problematic questions, such as :
When is a recommendation an encouragement?
How will the current practice that a seller gets to choose the transfer attorney be affected?
A practitioner may not provide an incentive for a particular service provider to be used for the issue of compliance certificates.
The Minister is obliged to prescribe a code of conduct that every practitioner must comply with. The Minister may also from time to time, by notice in the Gazette, classify certain conduct as an undesirable practice.
Any transgression of the Act amounting to an offence can expose a practitioner to either a fine or imprisonment for up to 10 years.
If you are unsure of anything in this article then please feel free to contact us for any legal queries you may have.
Contact Loftus Law today
Our Team:
Russell Loftus (Attorney and Conveyancer)
Tel 082 651 5548
Email: russell@loftuslaw.co.za
Jan Watson (Paralegal)
Tel 011 447 1534 | Mobile 082 560 8843
Email: jan@loftuslaw.co.za [...]
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A will is a unique document in which you record your decision as to how your assets will be dealt with after your death. Because your will cannot be changed in any way after your passing, it must be drawn to reflect your wishes accurately. You will be avoiding interfamily disputes which so often arise.
What happens if you don’t have a will?
If you do not have a will when you die, you will have lost all personal decision-making power regarding your estate. You will be regarded as having died intestate, and your estate will be distributed in terms of the provisions of the Intestate Succession Act.
The Act stipulates how your assets are to be distributed amongst your family members depending on whether or not you leave a surviving spouse or children. The result of this distribution may have an unintended consequence in terms of which someone you may not have wanted to inherit from you does, in fact, do so.
Your intestate heirs can agree on how your assets are to be reallocated amongst them. This is done by entering into a redistribution agreement.
Contact Loftus Law about a Will today
Our Team:Russell Loftus (Attorney and Conveyancer)Tel 082 651 5548Email: russell@loftuslaw.co.za
Jan Watson (Paralegal)Tel 011 447 1534 | Mobile 082 560 8843Email: jan@loftuslaw.co.za [...]
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When is the right time to be registered as a Credit Provider?
If you sell property, land or anything else to someone on credit, you enter into a credit agreement.
In essence, you are now the seller and a credit provider.
The National Credit Act stipulates that you must be registered as a credit provider to conclude the transaction. Failure to do so will entitle the other party to cancel the transaction at any time and reclaim all the money paid to you in terms of that agreement.
However, the Act does not apply to the following situations making it unnecessary to register as a credit provider :
Where the transaction is not at arm’s length. e.g. where the other party is a family member.
Where the other party is a company, close corporation or trust (juristic person)and its asset value or annual turnover is more than (currently) R 1m.
Where the juristic person has an asset value or annual turnover of less than R 1m and secures the debt by way of a mortgage bond or where the amount of credit is at least R 250 000.
Contact Loftus Law for more information
Lending people money can become complicated and lead to unexpected problems. Rather than putting yourself through the stress of going it alone, contact us and let us assist you.
Our Team:
Russell Loftus (Attorney and Conveyancer)
Tel 082 651 5548
Email: russell@loftuslaw.co.za
Jan Watson (Paralegal)
Tel 011 447 1534 | Mobile 082 560 8843
Email: jan@loftuslaw.co.za [...]
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