Monthly Archives: February 2018

How do I register a trust?

Posted on by

B1A trust is an agreement between the person who owns the assets and the appointed trustees. A trust can be a good way to preserve your wealth for your family and children. A well-managed trust will make sure that anyone who is a beneficiary of the trust benefits from it. The trustees have the important job to administer the trust and its assets objectively with the best interests of the beneficiaries in mind.

Trusts and their administration fall under the Trust Property Control Act no 57/1988.

What types of trusts are there?

It’s important to note that there are two types of trusts. An inter vivos trust and a testamentary trust. A testamentary trust is one that’s formed from the will of a deceased person.  In the case of a testamentary trust the deceased’s last will serves as the trust document. An inter vivos trust is created between living persons, and will form the basis of this article. Inter vivos trusts can limit estate duty and preserve your assets and wealth for your descendants. Certain financial institutions assist in setting up a trust and can act as trustees.

Registering an inter vivos trust

To register an inter vivos trust with the Master of the High Court, the following documents must be lodged.

  • Original trust deed or notarial certified copy thereof.
  • Proof of payment of R100 fee, for registration of a new Trust.
  • Completed Acceptance of Trusteeship (J417) and Acceptance of Auditor Application (J405) forms.
  • Bond of security by the trustees – form J344 (if required by the Master)

* There are no costs involved in amending an existing Trust.

These documents are also required for the Master to issue the trustees with letters of authority for administering the trust. A trustee may not proceed to administer the trust without the written authority of the Master.

If the trust’s assets or majority of its assets are located in a particular area, then the inter vivos trust has to be registered with the Master who has jurisdiction in that area.

De-registering of a trust

The Master can de-register the trust only once it has been terminated. The common law makes provision for the termination of a trust as the Trust Property Control Act makes no such provision. The following circumstances can be grounds for a trust to be terminated:

  • by statute
  • fulfilment of the object of the trust
  • failure of the beneficiary
  • renunciation or repudiation by the beneficiary
  • destruction of the trust property
  • the operation of a resolutive condition

You will still need the original letter of authority, bank statements reflecting a nil balance on the final statement and proof that the beneficiaries have received their benefits.

Administering the trust

Trustees are required to comply with the Trust Property Control Act, which determines how trusts should be administered and the role of the trustees. If trustees fail to comply with the Act they may face criminal prosecution. The trustees have to always act with the best interests of the beneficiaries in mind.

Some legal requirements of trustees include not being able to make secret profits, taking care and being objective when administering trust assets and always acting in good faith.

Reference:

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

An ex-spouse refusing to pay maintenance?

Posted on by

B2If a couple has gotten divorced and they have a child, then it’s the responsibility of both parents to support the child. The duty to pay maintenance cannot be avoided, regardless of either parents’ situation. If one parent refuses to pay maintenance, then the other parent can go to a court and make a claim. Being a single parent doesn’t mean being the only one to contribute to maintenance.

What should I do about it?

To deal with a spouse who refuses to pay maintenance you would first need to inform the maintenance officer. The maintenance officer can apply to the court for:

  1. A warrant of execution;
  2. An attachment order against the defaulter’s salary;
  3. An order to attach any debts; and
  4. A criminal prosecution.

Does the non-paying parent have a defence?

The only defence that a parent could have for not paying maintenance is having a lack of income. However, if the parent is unwilling to work, such as laziness, then this will not count as a defence. Failure to pay maintenance is taken very serious, guilty parents won’t get much sympathy from the court or others. If the parent is capable of working, then they will be expected to pay maintenance.

But I can’t find my ex-spouse?

Non-paying parents may think that they’re being clever by changing their address and not notifying the court. This is considered a criminal offence, and will result in punishment. Fortunately, it’s not the responsibility of the single parent to find anyone. A maintenance investigator will track down and find a non-paying parent.

How to claim maintenance

If you want someone to pay maintenance or believe that they are not paying the proper amount, then you can follow these steps at your local magistrate’s court. Remember to go the court in the district where you live.

  1. Go to the court and complete the form “Application for a maintenance order (J101)”.
  2. Also submit proof of your monthly income and expenses.
  3. A date will be set on which you and the respondent (the person whom you wish to pay maintenance) must go to the court.
  4. A maintenance officer and an investigator will investigate your claim and look into your circumstances.
  5. The court will serve a summons on the respondent.
  6. The respondent then has to either agree to pay the maintenance, or challenge the matter in court.

If found liable to pay maintenance

If the court finds someone liable for paying maintenance, it will make an order for the amount of maintenance to be paid. The court will also determine when and how the payments must be made. There are several ways the payments could be made. The court can order that the maintenance be paid at the local magistrate’s office or that the amount to be paid into the bank account chosen by the person claiming. The payments could also just be made directing to them. According to the new Maintenance Act (1998), an employer can deduct payments from an employee’s salary, if they’re liable for paying maintenance.

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

My tenant failed to pay rent: Can I kick him out?

Posted on by

B3

If your tenant has failed to pay his or her rent, it can be tempting to simply kick them out yourself and change the locks. However, do so would be considered illegal, even if the tenant has become an illegal occupant. The reason is because of the PIE Act.

In sum, the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) (1998) provides procedures for eviction of unlawful occupants and prohibits unlawful evictions. The main aim of the Act is to protect both occupiers and landowners. The owner or landlord must follow the provisions of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) (except in areas where ESTA operates) if they want to evict a tenant.

Who is covered?

  • Anyone who is an unlawful occupier, which includes tenants who fail to pay their rentals and bonds, is covered by PIE.  It excludes anyone who qualifies as an ‘occupier’ in terms of the Extension of Security of Tenure Act

When is an eviction lawful?

  • For an eviction to happen lawfully, certain procedures must be followed. If any one of them is left out, the eviction is unlawful. So, if an owner wants to have an unlawful occupier evicted, they must do the following:
    • give the occupier notice of his/her intention of going to court to get an eviction order.
    • apply to the court to have a written notice served on the occupier stating the owner’s intention to evict the occupier.
    • The court must serve the notice at least 14 days before the court hearing. The notice must also be served on the municipality that has jurisdiction in the area.

After a landlord intrusts their attorney to commence eviction proceedings, the following happens:

  • Typically, (except in a case of urgency, e.g. if the tenant is maliciously damaging the leased premises because he got notice to vacate) the attorney will call on the tenant to remedy the breach (usually failure to pay rent on time);
  • If the tenant fails to deal with the demand, the tenant will be considered to be in illegal occupation of the property;
  • The attorney then applies to court for permission to begin the eviction process. The court gives a directive as to how and on whom notice of eviction should be served;
  • The attorney doesn’t give the tenant notice at this time;
  • The application to court sets out the reasons for the application and the personal circumstances of the occupants;
  • If the courts are satisfied that it is fair to evict the tenant and all persons occupying the property with him, it gives a directive as to how the application for eviction must be served;
  • The sheriff then serves the notice of intention to evict on the tenant and the Local Municipality;
  • The occupants have an opportunity to oppose the application, and explain why they should not be evicted;
  • If there is opposition, the matter gets argued before a magistrate or judge, who decides whether an eviction order can be granted, and if so, by when the occupants should vacate the property within a stipulated time;
  • If the tenant does not oppose, the court will grant the eviction order;
  • If the tenant fails to move, the attorney will apply to Court for a warrant of ejectment to be issued by the Court. This process can take a further three to four weeks.

Reference:

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

Renting property to foreigners

Posted on by

B4Renting property in South Africa is a straightforward process. The country has a vast selection of rental accommodation including bachelor flats in apartment blocks, Victorian cottages, stand-alone houses with big gardens, and semi-detached units in modern townhouse complexes.

In South Africa, the right of a foreigner to purchase immovable property was restricted in the past by the Aliens Control Act. These restrictions were uplifted in 2003 by the new Immigration Act (“the Act”) which repealed the Aliens Control Act and many of its restrictive provisions and now clearly defines who a legal foreigner is and who is not. In short, a legal foreigner is a person in possession of a valid temporary residence permit or a permanent residence permit approved by the Department of Home Affairs.

The new Act makes provision for various temporary residence permits to be issued to foreigners, including amongst others:

  • A visitor’s permit
  • A work and entrepreneurial permit
  • A retired person permit

In principle, a landlord or tenant can legitimately lease or sell immovable property to any person recognised under the Act as a legal foreigner.

That said, foreigners working in South Africa with a legal work permit, are not regarded as “non-residents” by the South African Reserve Bank. They are considered to be residents for the duration of the period of their work permit and are therefore not restricted to a loan of only 50% of the purchase price.

It is also important to take note that the Act criminalizes the letting or selling of immovable property to an illegal foreigner by making this transaction equivalent to the aiding and abetting of an illegal foreigner and is such an act classified as a criminal offence in terms of the Act.

In conclusion, a legal foreigner may let or buy immovable property in South Africa, provided that he is the holder of either a legal temporary residence permit or a permanent residence permit approved by the Department of Home Affairs. Ensure that you enquire from your potential tenant or purchaser whether they are legally present in South Africa and obtain the necessary proof from them before entering into any transaction with a foreigner. Also, take account of the restrictions on local financing, particularly where the procurement of financing is a condition precedent to the agreement.

References:

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

Should I plan my estate as a young adult?

Posted on by

B1It is very important for you to plan your estate, which could include a living will, a last will and a living trust. This can help families prepare for difficult times when you are no longer around to assist or advise them. Our lives get busier and more complicated by the day, so estate planning for young and old becomes increasingly important. Young people should consider preparing certain estate planning documents, and in particular financial powers of attorney and living wills.

At the age of 18 a young man or woman officially becomes an adult in the eyes of the world. This means that you are entitled to make important financial, legal or health decisions about your lives. But what if something happens and you are unable to make these decisions at a critical time? Such situations can range from a small inconvenience to a life-threatening crisis, but if your estate is in order, it can speak on your behalf.

Financial power of attorney

A financial power of attorney allows you to appoint someone you trust, like another family member, to make financial decisions on your behalf. This document can be activated when you are incapacitated or right after it has been signed, and it will remain effective until you can resume charge of your own decisions again.

A financial durable power of attorney will allow the appointed person to handle important legal and financial matters on behalf of the grantor. In the case of a business or financial situation which involves the young adult, such as a passport or car registration renewal, it is convenient for the power of attorney to act on his/her behalf if they cannot tend to the problem. This arrangement may come in handy when there is a legal situation which requires quick action and the young adult is unable to attend. Families with a disabled family member can also benefit from the security of a power of attorney.

Living will

A living will enables you to state specific medical wishes if you are alive, but unable to communicate them. Artificial life support in the case of a coma or terminal illness is an issue often discussed in such a document. Preferences regarding administering of pain medication, artificial nutrition and other treatments can be dictated in this document.

The Terry Shaivo case shows what can happen if this document is not in place. The legal battle between her husband, family and state of Florida lasted for years before she was granted her wish and taken off life support.

Health care power of attorney

With this type of power of attorney, you give someone else the power to make health decisions on your behalf. These decisions regarding serious health and emotional crises will be made based on instructions which you have given to your power of attorney beforehand. Sometimes a living will is combined with a health care power of attorney, because both of these can be revoked, i.e. it can be cancelled at any time by destroying it, communicating your wishes to your doctor, writing a letter regarding the cancellation or by creating a new living will and health care power of attorney, indicating that the new will revokes all the previous ones.

Start the conversation

Every family’s legal needs are different, so perhaps you should take the first step in being prepared for the worst. Remember that every time your family composition changes, like when a child is born, you need to adapt your will to include them. Start the process and be prepared.

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

Antenuptial contracts: With or without the accrual system?

Posted on by

B2If you don’t have an ANC, you are automatically married in community of property. This means that there is one estate between a husband and a wife. Everything is shared equally between spouses, which includes debts. However, with an antenuptial contract, the estates of each spouse remain separate. The difference comes with the addition of the accrual system.

What is an antenuptial contract?

An ANC determines whether a marriage will be out of community of property with/without the accrual system. It must be signed by the persons entering into a marriage, two witnesses and a notary public, and it must be registered in the Deeds Registries office within the prescribed time period.

What is the accrual system?

The accrual system is a formula that is used to calculate how much the spouse with the larger estate must pay the smaller estate if the marriage comes to an end through death or divorce. Only property acquired during the marriage can be considered when calculating the accrual.

  • If there is no accrual system, then the spouses have their own estates which contain property and debts acquired prior to and during the marriage – nothing is shared.
  • The underlying philosophy of the accrual system is that each spouse is entitled to take out the asset value that he or she brought into the marriage, and then they share what they have built up together.
  • The accrual system only applies if the marriage ends – either by divorce or death. You cannot claim your share of the joint estate while you’re still married.

Whether or not you decide to include the accrual system in your antenuptial contract depends on the couple. Some may see the relevance while others do not.

It’s important that both of you consult the lawyer who’s drawing up the ANC because both spouses need to be fully aware of the consequences. It’s also important to see someone who’s neutral, and who can mediate what goes into your ANC, because emotions can cloud your judgment, and it can be a stressful negotiation if one spouse has a lot of assets and the other doesn’t, for example.

References:

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

Fearing Foreclosure: What are your rights as the homeowner?

Posted on by

B3The recent junk status announcement has shaken us into a quick action of tightening our belts and letting go of luxuries to afford our day to day expenses. This financial condition inhibits the possibility of purchasing a new house, let alone affording your current home.  Have you thought about what you would do if your foreclosure wiped its shoes on your doormat?

You have the option to sell

Selling, rather than waiting for foreclosure, offers a greater possibility of you receiving greater value for your home. You may choose to sell privately or through an estate agent. It is advisable that your qualified conveyancing attorney be notified of any concerns, as well as any interests of potential buyers. During this time, look for alternative home solutions, and consider a suitable transfer date.

  • Prior to the signing of the agreement of sale and the transfer of ownership, the property still belongs to you.

You have time

Before receiving a foreclosure notice, the bank allows a grace period for you to catch up on your bond instalments. It may be difficult to do so, considering your finances have already been tightrope walking over the past few months. Meeting with your bank allows the opportunity for a payment restructure to be discussed and agreed upon.

  • The repossession procedure is paused during the time you are in application of or in debt review. The National Credit Act allows this opportunity.

Approach your lawyer

If, after attempting to recover payments, you receive foreclosure summons, contact your lawyer. As stated by section 26(3) of the South African Constitution, your eviction may not be finalised without an official court order. The courts consider all relevant circumstances before reaching a final eviction decision.

  • You may not be arbitrarily removed from your home.

You won’t be homeless

You have the right to adequate housing, despite your previous or current economic standing. Adequacy is determined by a place to eat, shelter, a place to sleep, and a place to raise a family, and this accessibility is the responsibility of the state. Following the outcome of the sale by the bank, the home is no longer in your ownership, and the state classifies you as an unlawful occupier.

  • The eviction process will then follow that of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act.

References:

  • National Credit Act
  • Constitution of the Republic of South Africa [1996]
  • Prevention of Illegal Eviction from and Unlawful Occupation of Land Act [No. 19 of 1996]

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

Customary marriages in
South Africa

Posted on by

B4In South Africa, there are various forms of marriage, which includes Civil Marriage, Customary Marriage and Civil Union. For a long time, customary unions (marriages) did not have the same full legal status as civil marriages (e.g. magistrate’s court marriages) had in South African law. This was unfair discrimination and also made women in customary marriages vulnerable.

The Recognition of Customary Marriages Act

The new Recognition of Customary Marriages Act became law on 15 November 2000, together with Regulations under the Act.

The new Act:

  • Sets down the rules for a proper customary marriage.
  • Gives full legal recognition to a customary marriage.
  • Makes women and men equal partners in a customary marriage.
  • Gives community of property to partners in a customary marriage who married after 15 November 2000 – unless they agree not to share property between husband and wife.
  • Gives legal recognition to polygyny (when a man can have more than one wife).
  • Protects a woman’s right to end a polygynous marriage, and her right to the joint property of her marriage.
  • Sets down legal rules for ending a customary marriage, including divorce.
  • Allows a woman to claim maintenance when the marriage ends – although the courts will take into account the lobola/bohali contribution when deciding on maintenance payments.

Requirements for a customary marriage

There are only three basic statutory requirements for the validity of a customary marriage in terms of The Recognition of Customary Marriages Act 120 of 1998. Section 3 of the Act states that:

“For a customary marriage entered into after the commencement of the Act to be valid:

  1. the prospective spouses:
    1. must both be above the age of 18 years
    2. must both consent to be married to each other under customary law; and
  2. the marriage must be negotiated and entered into or celebrated in accordance with customary law.”

Reference:

  • The Recognition of Customary Marriages Act, 120 of 1998

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