Colin Flax Attorney, Notary & Conveyancer

08/04/2021

Court finds against Estate Agency Affairs Board (EAAB) battle for Fidelity Fund Certificates (FFCs)

In a scathing judgement handed down from the High Court on 15 March, the failure of the Estate Agency Affairs Board (EAAB) to issue Fidelity Fund Certificates (FFCs) to the applicant estate agents has been found without merit.
This comes after an urgent application from the Real Estate Business Owners of South Africa (REBOSA) as a last resort to assist real estate professionals still awaiting the issuance of their FFCs for 2021.
The EAAB was not only unable to provide any evidence supporting the lawful withholding of FFCs from the applicant agents and agencies, but its conduct during litigation was such that it was explicitly called out in the court’s judgement as “further evidence of the disarray in the EAAB and the concerns raised by REBOSA”.
As a result, the court found in favour of REBOSA and its co-applicants, with costs. The EAAB has been given urgent deadlines by which they must either issue the outstanding FFCS to each qualified agent and agency listed in the application, or notify them of valid reasons for not doing so.
Further to this, the EAAB has been ordered to file a report with the court within 30 days detailing the number of applications for FFCs received on or before 31 October 2020, how many of these applications were approved for certification, and how many certificates have been issued. The regulator must also disclose the total number of unresolved queries lodged by estate agents and the total funds currently held in its suspense account.
“REBOSA welcomes the judgement, as it highlights the plight of the average agent in our industry,” says REBOSA Chairman, Tony Clarke. “Even more importantly, we hope that it will open doors to collaborating with the EAAB on resolving its service delivery challenges once and for all. This would be a huge step towards achieving a mutually beneficial working relationship with our regulator and building a better professional future for the real estate industry as a whole.”

30/04/2020

COVID-19 Crisis Funding: Where and how to apply.
Details of qualifying criteria included.

And what are the qualifying criteria?

13/04/2020

Coronavirus (COVID-19) and its effect on the rights and obligations of parties in contractual relationships

By Tanya Waksman of Eversheds Sutherland

A force majeure event is an unforeseen and superior force, event or circumstance, which is beyond the control of the contracting parties, and which renders contractual performance impossible.
Where an agreement does NOT contain a force majeure clause, the legal principle of supervening impossibility or impossibility of performance becomes applicable. In such instances (unlike an express force majeure provision, which contains the guidelines of application) the party who is unable to perform due to the supervening event must objectively prove that:

• as a result of the event, contractual performance is impossible (not merely difficult or more costly); and
• the event was unforeseen, and the consequences of non-performance unavoidable.

Where an agreement DOES contain a force majeure clause, it will be constructed to protect the parties to a contract by:

(i) limiting the affected party’s liability for non-performance, if a force majeure event occurs; and/or
(ii) suspending performance of both party’s obligations (without penalties) until such time as performance can continue; and/or
(iii) allowing an agreement to be terminated, without penalty, where performance cannot resume. Consequently, the force majeure provision suspends the ordinary consequences of breach of contract.

Coronavirus (COVID-19) is a force majeure event.
In the context of South Africa, President Cyril Ramaphosa declared a “national state of disaster” because of COVID-19, in an address to the nation on 15 March 2020. This becomes a landmark date, as the application of a force majeure clause will be assessed (in most cases) based on the impossibility of performance, as a result of COVID-19 and/or the effects of the President’s declaration on performance, after that date.

As such, a contracting party can only invoke a force majeure clause if the consequences of the declaration, and/or the spread of the virus, renders contractual performance impossible.

The precise application, and effect, of a force majeure clause (or the principle of supervening impossibility), will depend on the circumstances and the specific wording of the clause, and its interpretation under the relevant governing law of the contract.

12/04/2020

I am at your service during Lockdown

As people come face to face with mortal jeopardy, they are ensuring that their houses are in order should the worst-case scenario play out.

06/04/2020

Deeds office closure hits estate agents
05 April 2020 - 05:00 by Nick Wilson, Sunday Times

SA's estate agency industry, already under the cosh thanks to a sputtering economy, is now experiencing a cash squeeze as the closure of the deeds office and local municipalities during the lockdown means many agents cannot receive commissions for finalised sales.

Samuel Seeff, chair of Seeff Properties, says this has created a "major problem for the industry as a whole" and that the Real Estate Business Owners Association (Rebosa), of which he is a director, is urgently working with the Law Society of SA to try to get the deeds office opened "as an essential service"...

30/03/2020

NOTICE - WORK AS USUAL DURING LOCKDOWN

Kindly note I am fully functional during the lockdown and
am at your service. I may be contacted on 011 882 9217
or 082 210 4078 or by email [email protected] or
[email protected]

30/03/2020

The only way our country is going to work through this is to unite around a single purpose, a common goal, and to show compassion and solidarity for everyone around us. We all need to remain calm and do our part to
support the country. Please empower yourself with factual information and continue to take preventative
measures such as practising social distancing and good personal hygiene.

Proudly support our President and the leadership he has shown, while carrying the weight of the
country on his shoulders. Now is the time for all of us to stand tall and really be the difference. We
can all do this together. You have to do your part.
Wishing you and yours well !

30/08/2019

President Cyril Ramaphosa recently signed the controversial Administrative Adjudication of Road Traffic Offences (AARTO) Amendment bill, which bill will come into effect once published in the Government Gazette. Some of the main implications for vehicle owners, drivers and operators are as follows:

A demerit system is introduced whereby you are allocated demerit points when committing a traffic infringement*;
Your driver’s licence will be suspended if you reach the maximum points allowed in terms of the demerit system;
If your licence has been suspended three times, your licence will be confiscated and you will need to re-apply for your driver’s licence;
Failure to adequately respond to an infringement notice or courtesy letter will result in the authorities not issuing a permit, driver’s licence or licence disc until the penalty is paid or revoked;
Notices can be sent electronically in addition to utilising registered mail;
Law abiding behaviour will reduce a road user’s demerit points.
Penalty Procedure:

In short, you will be issued with an infringement notice which must be complied with within 32 days. Should you elect to pay the penalty, a discounted rate may apply. A courtesy letter will be sent to you if you fail to respond to the infringement notice. You have to respond to the courtesy letter within 32 days, failing which an enforcement notice will be issued. You will be unable to renew your driver’s licence, licence disc or professional driver’s permit if an enforcement notice has been issued against you. You will need to comply with the enforcement notice or apply to have it revoked should you wish to have the aforementioned licences issued.

Both the infringement notice and the courtesy letter will provide you with various options, mainly being:

To pay / make arrangements to pay the stipulated penalty;
Make representations to the authorities that you were not the driver of the motor vehicle and provide the details of the driver who committed the infringement;
To elect to be tried in court for the alleged offence.
Demerit points will only be allocated once an infringer complies with an infringement notice by paying the penalty.

As will be clear from the above, the Act seeks to alleviate the burden on our district courts of hearing traffic offences. It does this by establishing an alternative system whereby you can make a representation to the Road Traffic Infringement Authority when disputing a notice of infringement. Should your representation be rejected, an appeal may be directed to an Appeals Tribunal. An infringer who is affected by the outcome of the Tribunal’s decision may further appeal to the High Court having jurisdiction.

It is clear that this legislation will present the authorities with many challenges, the fiercest likely being the mountain of administration required to implement and regulate it, as well as the backlash that can be expected from motorists.

Although the Act can be commended for its aim of promoting compliance with traffic laws in order to promote road safety, it is yet to be seen how the authorities will deal with the challenges outlined above.

*A link to Schedule 3 of the Regulations setting out the range of traffic infringements and offences, penalties payable, discount available and demerit points allocated can be accessed below.

Click here for PDF (5.9Mb)

18/07/2019

Different types of Home Loans

In today’s economy, homebuyers often struggle to scrape together the money needed in order to buy their dream homes. Therefore, home loans have become so popular among prospective home buyers. New home loan providers noticed this and entered the mortgage lending market in order to satisfy this demand. Prospective home buyers are now spoiled for choice when it comes to choosing a provider to finance their property purchase. But that’s not all. Prospective home buyers can now choose the perfect home loan type that will be suitable for them specifically. There are several home loans available to prospective home buyers in South Africa. We will provide an overview of these types of home loans below:

Fixed-rate home loan
Fixed-rate home loans have a fixed interest rate for a certain period, which covers one or two years. The fixed-rate will always be higher than the base home rate, but you will be protected against increasing rates. This loan helps you to avoid increased interest rates, however, if the interest rates drop, you will still be paying the same fixed rate.

First-time buyers home loan
First-time buyers home loans are very popular among first-time home buyers who want to invest in their first home but do not have the money at hand to put down on a deposit. Banks and other lenders are now open to lending more than 100% of the purchase price, which includes the registration and transfer costs.

Variable home loan
Variable home loans have their interest rate attached to the base home loan rate, which goes up and down, depending on the amount of the loan. If the home loan base rate goes down, the interest rate follows, however, it also works the other way round.

Capped rate home loan
Capped rate home loans provide you with the extra security of a variable interest rate without locking in a fixed rate. These home loans protect you against interest rate increases. However, it should be noted that qualifying for these types of home loans are quite difficult.

Step-down home loans
Step-down home loans are popular among homeowners who are close to retirement. With this type of loan, the rate offered to you by the bank is gradually lowered every year or 6 months. This saves you a lot of money. This home loan is very similar to switching home loans, as switching your home loans enables you to secure a significantly lower rate.
Whichever home loan you choose, rest assured that there is a home loan out there for you that will enable you to make the biggest investment of your life; buying a home.

This article is a general information sheet and should not be used or relied on as legal or other professional advice.

31/05/2019

Land Expropriation Bill

During 2018, the African National Congress (ANC) announced its intention to drastically speed up the land reform process in South Africa when President Cyril Ramaphosa announced that he would be proposing changes to section 25 of the Constitution of the Republic of South Africa (“the Constitution”) to allow for the expropriation of land without compensation.In essence, expropriation of land occurs when the state takes land away from its owner for public use. Where land is expropriated without compensation, the landowner is not compensated for the value of the property lost. Currently, our Constitution only allows for expropriation with compensation.
The proposed changes to the Constitution elicited much debate, as there is a rigorous process to be followed to amend a right such as section 25, which forms part of the Bill of Rights. In terms of section 74(2) of the Constitution, the Bill of Rights may only be amended by the passing of a Bill which must be approved by the supporting vote of at least two thirds of the National Assembly, as well as the supporting vote of at least six of the nine provinces of the National Council of Provinces. Once voted on, the Bill must be drafted and published in the Government Gazette allowing the public 30 days to comment thereon. Only once this 30-day period has passed may the Bill be introduced to Parliament.

Importantly, amendments to a right in the Bill of Rights may only be made where they are in line with section 1 of the Constitution and do not stray from matters directly connected to the amendment. Section 1 states that the Republic of South Africa is founded on the value of supremacy of the Constitution and the rule of law. If the rights contained in the Constitution, as the supreme law of the land, were subject to constant change, its overall credibility and reliability would be in danger. The credibility and supremacy of the Constitution are pivotal, especially in light of apartheid which was enabled by the manipulation and strategic interpretation of laws.

Following the above-prescribed procedures, the ANC introduced the Land Expropriation Bill (“the Bill”) to Parliament in February 2018.

In terms of clause 7(1), an expropriating authority must serve a notice of intention to expropriate on the owner of the land and any other person who may hold a right in the property. Clause 7(2) specifies what is to be included in such notice.

There is a misconception that the Bill allows for the expropriation of land without compensation immediately and without recourse to the owner of the land or any person who has rights therein. This is incorrect. The Bill requires the landowner and the expropriating authority to negotiate and reach an agreement as to the amount of compensation payable to the landowner. Only once such an agreement of compensation payable cannot be reached, and 40 days have passed, may the expropriating authority decide whether or not to proceed with the expropriation.

Clause 12 states that the amount of compensation to be paid to a landowner must be just and equitable and reflect an equitable balance between the public interest and the interests of the landowner. Notably, clause 12(3) of the Bill states that it may be just and equitable for nil compensation to be paid to the landowner where land is expropriated in the public interest.

In sum, the Bill entitles an expropriating authority to expropriate land against a payment of compensation determined in terms of clause 12 of the Bill. This means that the compensation awarded must be just and equitable, which, where it is in the public interest, may be nil.

Reference List:

The Constitution of the Republic of South Africa, 1996.
Draft Expropriation Bill, 2019.
https://irr.org.za/reports/submissions-on-proposed-legislation/synopsis-of-submission-on-2019-expropriation-bill-19-02-19.pdf
https://businesstech.co.za/news/government/284510/section-25-amendment-south-africas-historical-moment-in-the-land-debate/
https://www.biznews.com/thought-leaders/2018/08/08/changing-sa-constitution-pierre-de-vos
This article is a general information sheet

31/05/2019

Your Neighbours Are Renovating

What one’s neighbour builds on their property, is not something the owner of the neighbouring property has a lot of control over. Unfortunately, it can have a negative impact on your property if the building work completed on your neighbour’s property does not comply with building regulations. Furthermore, it can be aesthetically displeasing, and be a sore eye to your property. Is there anything you can do in terms of the law to assist you in situations like these?
Buildings not complying with building regulations:

In the context of increasing state regulation, the adjudication of neighbour disputes about building has now apparently mostly migrated from the private law context of reasonableness to the public law context of legality. One consequence of this shift is that any building, first of all, has to comply with statutory and regulatory requirements before there could be any question about the reasonableness of any impact it may have on neighbours. Building works that do not comply with the applicable formal requirements (including permission to develop or subdivide, removal or amendment of restrictive conditions, compliance with zoning restrictions, and approval of building plans) are illegal regardless of their effect on neighbours.

To have these building works declared illegal (to have building work stopped or to have the completed building work demolished), neighbours do not have to prove that the buildings are unnatural, abnormal or unreasonable in the context – the mere fact that they do not comply with the formal requirements is enough to render them illegal. Building and zoning regulations are normally enforced by the relevant local authorities, but if they fail to do so, it has been decided that neighbours have the necessary locus standi to apply for a court order to enforce compliance with the relevant laws and regulations.

Remedies

The local authority or neighbours can obtain an interdict to stop the building work and – at least in some instances – an order to have the illegal buildings demolished.

It has been decided that the courts have the discretion to award monetary compensation rather than order demolition, but recently the courts have repeatedly stated that they will not be precluded from handing down demolition orders simply because buildings have been completed or because of the cost or value of completed building works or the hardship that the builder would suffer if a demolition order was granted.[1]

Views, sunlight, natural flow of air, privacy

A landowner cannot complain generally speaking, when otherwise lawful building works on adjoining or neighbouring land obstruct her previously existing view across that land or her previously existing access to sunlight, natural light or the natural flow of air.[2]

In De K**k v Saldanhabaai Munisipaliteit[3], the applicant argued that the building plans approved with regard to neighbouring land had to be reviewed and set aside because the building, once completed, would allow the neighbours to see onto his property, thereby invading his privacy. The application was dismissed because the court found no indication that the local authority had failed to apply its mind or to consider the relevant legislation and regulations in approving the plans. The implication seems to be that a landowner does not have an independent, inherent right to oppose building works on neighbouring land that would afford a view onto his property.[4]

Conclusion:

If a building does not comply with the relevant building regulations, or is not built according to an approved plan, an aggrieved neighbour’s primary remedy is to report the building to the municipality. The municipality is then supposed to interdict the person transgressing building regulations from building further and can even order for the demolition of an illegal structure. If the municipality fails in abovementioned duty, a neighbour can approach the court to enforce compliance with municipal regulations.

Building work which is only aesthetically displeasing or cause a loss of privacy, but adheres to all municipal regulations, will not constitute an actionable cause of action. The rationale behind this is because of the subjective nature of aesthetic considerations – what bothers one neighbour will not bother the next. Therefore, a neighbour’s remedies in this regard are very limited.

[1] AJ van der Walt, The Law of Neighbours, 1st edition, (2010), p. 341-343
[2] Van der Walt, The Law of Neighbours, p. 356
[3] 7488/04 (2006) ZAWCHC 56 (28 November 2006)
[4] Van der Walt, The Law of Neighbours, p. 372

21/05/2019

The pros and cons of co-ownership
Question posed:
“A friend and I are considering buying a house together as an investment property. I’m quite keen but she is a bit worried about how it will work and if it’s a good idea. Can you give some guidance on what the pros and cons might be of jointly owning the property?”

Buying property, whether for personal use or investment or business purposes, remains a stressful exercise. Often, as probably in your case, a person feels they wish to share some of the responsibility and financial exposure with another person and then partner up to jointly buy a property, essentially co-owning the property in question.

In such a case you and your friend will have to apply for a home loan together (and jointly have to meet the necessary credit application requirements, etc.), the property will be registered in both your names and you can own the property in either equal undivided shares or according to a determined percentage.

There are pros to co-owning a property. You can share expenses, deal jointly with upkeep and maintenance issues, help manage tenants and rental issues and divide the responsibility for mortgage repayments.

On the downside, it must be understood that you are a co-owner. That means that issues may arise if you and your friend are no longer friends; you may want to sell, but your partner not; you don’t want to spend money to renovate, but your partner does; you want to kick out your tenant but your partner wants to keep him, and so forth. Most of these issues can be dealt with in a properly drafted co-ownership agreement, but it must be appreciated that you don’t have the same freedom over your property as with sole ownership.

In such a co-ownership agreement, one should typically provide for what share each party owns in the property, financial contributions to the loan repayment, maintenance and upkeep costs of the property, the distribution of any profit, management of the bank account, arrangements regarding the renting or selling of the property, pre-emptive rights to buy the property etc. The agreement should also deal with the situation if a co-owner passes away and who will inherit or have the option to buy the co-owners share.

Clearly co-ownership has pros, but also cons, many of which can be quite onerous if not properly engaged with beforehand and addressed in a clear agreement between the co-owners. Seek the assistance of a property specialist and discuss the option of co-ownership as well as other potential structures for investing in a property portfolio before making any final decisions.