Category Archives: Property

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)

Can the future development of a property be stopped?

Posted on by

B1The provincial heritage resources authority (PHRA) granted a permit in terms of Section 34 of the National Heritage Resources Act 25 of 1999 for the demolition of a structure that was older than 60 years and situated on a property with no formal heritage status. By doing so, conditions were imposed controlling future development on the property and it was held that such conditions were lawfully imposed.

Gees v the Provincial Minister of Cultural Affairs and Sport

The Supreme Court of Appeal (SCA) recently dismissed an appeal against a judgment of the Western Cape High Court. In so doing the SCA held that the large concentration of art deco buildings spanning Davenport Road, Vredehoek, Cape Town, forms part of the national estate and is worthy of protection as a heritage resource.

Therefore, the SCA held that Heritage Western Cape, in granting a permit for the demolition of the appellant’s 60-year-old block of flats, was justified in imposing conditions controlling future development on the property.

It is true that the conditions imposed in the demolition permit amount to a curtailment of the appellant’s entitlement to deal with his property as he sees fit, and may therefore to a certain extent be regarded as a deprivation of property. However, it is widely recognised that in our present constitutional democracy an increased emphasis has been placed upon the characteristic of ownership which requires that entitlements must be exercised in accordance with the social function of law in the interest of the community.

Conclusion

AJ van der Walt and GJ Pienaar in “Introduction to the Law of Property” 7ed (2016), put it as follows:

‘. . . the inherent responsibility of the owner towards the community in the exercise of his entitlements is emphasised. The balance between the protection of ownership and the exercise of entitlements of the owner regarding third parties, on the one hand, and the obligations of the owner to the community, on the other hand, must be maintained throughout. This might, in certain circumstances, even mean that an owner’s entitlements could be limited or infringed upon in the interest of the community. In such cases the infringement must always be reasonable and equitable [not arbitrary].’

Reference:

  • Gees v The Provincial Minister of Cultural Affairs and Sport (974/2015) [2015] ZASCA 136 (29 September 2016)

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

Why is my property transfer taking so long?

Posted on by

B1After signing a deed of sale, the purchasers often want to move into the property as soon as possible.  When they are informed of the process involved prior to the property being transferred this may damper their excitement. There may also be delays in the transaction.   In order to avoid unnecessary frustration, it is vital that parties to the transaction understand the processes involved and that delays are sometimes inevitable.

The deed of sale will normally be the starting point in a transaction for a conveyancer who has been instructed to attend to the transfer.  This conveyancer is also known as the transferring attorney and is normally the main link between the other attorneys involved the transfer transaction.

Postponements, delays and interruptions

  1. A major role of the conveyancer is informing any mortgagees, for example banks, about the transfer so that any notice periods for the cancellation of bonds can start running. The notice period is usually up to 90 days. The transfer may be delayed as a result of this notice period.
  1. Obtaining the various certificates, receipts and consents applicable to the transaction in question also takes time. Examples of these is the rate clearance certificate, transfer duty receipt, homeowners’ association’s consent to the transfer, levy clearance certificate, electrical compliance certificate and plumbing certificate. The time it takes to obtain these certificates will differ from case to case. After an inspection by a plumber or electrician, for example, it may be found that certain work needs to be carried out before the certificates will be issued.
  1. Once all the documents are lodged at the Deeds Office by the conveyancer, an internal process is followed, which has different time frames in the various Deeds Offices. This time frame can also vary in a particular Deeds Office. It is best to enquire from your conveyancer what the Deeds Office time frame is at any given stage.

There are many ways in which the transfer process could be delayed, these are just some of the examples. If you feel that the process is taking too long, then you should contact your conveyancer.

Reference:

  • Aktebesorging, UNISA 2004, Department Private Law, Ramwell, Brink & West

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)

How do I cancel a lease?

Posted on by

B2What happens when a landlord or a tenant wants to cancel a lease? What rules and what legislation apply? What protection does the law provide?

If you want to end your lease early, this can be done in situations where:

  • the Consumer Protection Act or Rental Housing Act applies, or
  • there’s a clause in the contract that allows for early cancellation, or
  • if both parties agree to it.

If, on the other hand, one of the parties wants to cancel because the other is in breach of the contract, then certain notice periods come into effect – the first of which being, of course, that the aggrieved party is required to give written notice for the breach to be remedied.

 For tenants

  • If your landlord is in material breach of the lease, then cancelling your lease early will not be in breach of the contract.
  • If your landlord has met all the conditions of the lease and you decide to cancel your lease early, you will be in breach of contract unless the termination of the lease has been mutually agreed upon. Speak to your landlord before making any rushed decisions, chances are, you may be able to come to a mutual agreement whereby you are able to find a replacement tenant or sublet the property for the remainder of your lease.

For landlords

  • Firstly, look to the provisions of the lease itself. Most leases contain a breach clause, which indicate a period of a number of days that are necessary to be given as notice to the tenant of a breach. If there is no breach period specified, it will be a ‘reasonable period’ in terms of the common law.
  • If you give notice of the breach, and it is not remedied in the breach notice period, this means that you can take action to sue for whatever is owed or even issue summons and attach the tenant’s goods by evoking your landlord’s hypothec, but you cannot cancel the lease and evict.

When it comes to cancelling agreements, it is always best to consult a legal expert since doing something from your own understanding and experience could lead to a court case.

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)

 

Title deeds when buying or selling property

Posted on by

B3If you’re planning to buy a new property, you’ll need to get the title deed transferred into your name to prove that you’re the owner of the property. You’ll need the assistance of a lawyer specialising in property transfers (also known as a conveyancer) to help you transfer the title deed into your name.

You’ll only become the owner of the property when the Registrar of Deeds signs the transfer. After it’s been signed, a copy of the title deed is kept at the Deeds Office closest to you.

How long does it take? 

A search may take 30 to 60 minutes. In some of the larger offices, the copy of a deed is posted or it must be collected after a certain period of time.

To obtain a copy of a deed or document from a deeds registry, you must:

  • Go to any deeds office (deeds registries may not give out information acting on a letter or a telephone call).
  • Go to the information desk, where an official will help you complete a prescribed form and explain the procedure.
  • Request a data typist to do a search on the property, pay the required fee at the cashier’s office and take the receipt back to the official at the information desk.
  • The receipt number will be allocated to your copy of title.

Fortunately, a conveyancer will help you with the process so that you don’t have to worry about all the paperwork yourself. You should contact your legal advisor to find out more.

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)

What is a title deed?

Posted on by

B2If you are planning to buy a new property, you will need to get the title deed transferred into your name to prove that you are the owner of the property. You will need the assistance of a lawyer specialising in property transfers (also known as a conveyancer) to help you transfer the title deed into your name.

You will only become the owner of the property when the Registrar of Deeds signs the transfer. After it has been signed, a copy of the title deed is kept at the Deeds Office closest to you.

A Title Deed is documentary proof of ownership in terms of the Deeds Registries Act 47 of 1937. Each property has its own separate Title Deed. It is an important document containing all the details pertaining to a particular property.

These details are:

  • The name of the existing owner as well as the previous owners.
  • A detailed property description which includes size.
  • The purchase price of the property paid by the existing owner.
  • Conditions applicable to the zoning, use and sale of the land.
  • All real rights registered in respect of the property.

The owner will normally have the Title Deed or a copy thereof in his possession. Before signing an offer to purchase carefully scrutinize the Title Deed.

What is The Deeds Office and The Deeds Registry?

There are numerous Deeds Offices throughout South Africa. Each Deeds Office holds a Deeds Registry, containing filed Title Deeds of all the properties in its particular jurisdiction. All the Deeds Registries are linked to a computer network. Your estate agent can, via a computer-linked facility from his office, examine any Title Deed (registered from 1980) in the country’s combined Deeds Registry.

What’s the Difference Between a Property Deed and a Title?

Title is the legal way of saying you own a right to something. For real estate purposes, title refers to ownership of the property, meaning that you have the rights to use that property. It may be a partial interest in the property or it may be the full. However, because you have title, you can access the land and potentially modify it as you see fit. Title also means that you can transfer that interest or portion that you own to others. However, you can never legally transfer more than you own. Deeds, on the other hand, are actually the legal documents that transfer title from one person to another. Sometimes the Deed is referred to as the vehicle of the property interest transfer.

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)

What is the sale agreement?

Posted on by

B1Whenever you buy or sell a house you will encounter the sale agreement, which is also called an “offer to purchase”. This is a contract between a buyer and seller and covers the terms and conditions governing the sale of the property. Buying or selling a house can be stressful and sometimes confusing, however, the sale agreement doesn’t have to be.

An agreement of sale is a written agreement signed by both the buyer and the seller (and also by the seller’s spouse if he’s married or subject to the laws of a foreign country), whereas an offer to purchase may be either oral or written. If it’s in writing and signed by the buyer and accepted by the seller, an offer to purchase constitutes a binding agreement of sale, whereas an oral offer isn’t binding.

What should a sale agreement include?

These are a few things a sale agreement should include:

  • The names, identity numbers and marital status of all the parties.
  • The buyer’s address.
  • Description and size of the property as detailed in your deed of transfer.
  • The selling price and whether a deposit will be payable. If so, the deposit money will be held in the trust account by the transferring attorney.
  • A provision that the buyer pays all transfer and bond costs.
  • The name of the attorney handling the transfer.
  • The date of taking possession and occupation.
  • The provision that the buyer is responsible for all taxes and other municipal charges from the day of taking possession.

Who is responsible for the sale agreement?

The agreement, or contract, is usually an offer by the interested buyer. The buyer presents the offer to the owner of the property, who will accept it by signing it. This forms a binding contract. It is necessary to always consult a property lawyer who can assist you in a sale agreement.

References

  • Anderson, AM. Dodd, A. Roos, MC. 2012. “Everyone’s Guide to South African Law. Third Edition”. Zebra Press.
  • Legalwise.co.za

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)

Demystifying the executor in a deceased estate

Posted on by

B4During a person’s lifetime s/he will gather assets, in other words, belongings such as a house or a motor vehicle. These assets and liabilities will form part of a person’s estate. At the death of that person, his/her deceased estate must be administered, in other words, divided, distributed and controlled by someone. This person is called an executor.
.

However, the role of an estate executor and who can be appointed as one has been largely misunderstood.

What does the executor do?

“Executor” is the legal term for referring to the person, or people, nominated in your will to carry out the directives you set out in your will.

  1. This means that it is the executor’s responsibility to disburse your property to the mentioned beneficiaries in your will, but also obtain information on potential heirs, collecting and arranging payments, and approving or disapproving creditors’ claims.
  2. It is the executor’s duty to calculate and pay the estate tax, and to ensure that the correct documentation is filed with the relevant authorities.
  3. The executor is the individual that represents your estate.

Who can be appointed as the executor?

It has become normal to appoint a friend, family member or beneficiary to act as the executor, as they most likely have intimate knowledge of your estate and your affairs, but also, they will not rack up the fees that a legal body might accrue.

However, there is a misconception that you can avoid the fees by appointing a family member as the estate executor, but this could also mean that you are deferring the cost to the nominated family member.

  1. Family members appointed as executors on larger estates immediately find themselves out of their depth, and not only end up hiring a professional executor, but may also pay more for these services than necessary.
  2. A simple way to address this is by appointing a “professional” executor during your lifetime. This allows you to negotiate the executor fees.

If you appoint a family member, make sure that they understand that they will have to appoint a professional agent, and that they should negotiate the fee and be very cautious of agreeing to a fee arrangement in terms of which the professional agent charges their professional fee, instead of the legislated scale.

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)

Maintenance in Sectional Title Schemes

Posted on by

B4The requirements now necessary with regards to sectional title maintenance of major capital items as per the Sectional Title Schemes Management Act (STSMA) are there to create a more formalised and long term view with regards to maintenance, which in turn will create a need for better budgeting and financial management, says Michael Bauer, general manager of property management company IHFM.

There are two provisions in the STSMA, Regulation 2 and Annexure 1 of the new Prescribed Management Rules.

Regulation 2 provides for a reserve fund to be established (purely for maintenance of major capital items) and the amounts to be in reserve.

Trustees must distinguish between normal repairs and maintenance (on-going during the year) and replacement of major capital items as these will have purpose-bound funds in the reserve fund, said Bauer.

Repairs and ongoing maintenance need to be adequately budgeted tor in the operational/administrative budget and cannot be cross-subsidised. If the scheme runs out of budget in the repairs and maintenance, trustees may have to raise a special levy.

“Many will attest to the fact that well-maintained buildings create better first impressions and growing property values. The financial protection offered through a well-managed scheme will create a demand for units for sale and the cycle of increased prices and demand perpetuates,” he said.

The first new requirement in terms of the new legislation is that all sectional title schemes must have a ten year maintenance plan which must be presented at the Annual General Meeting (AGM). The Act does not specify what format this documentation should be in but it should include all major maintenance items, e.g. electrical installations, plumbing, glazing, waterproofing, perimeter fencing, and the like, and the costs of repairing, replacing or maintenance of any of these items over the coming ten year period should be listed.

“The problem with the fact that there is no prescribed form provided for the maintenance plan, is that some might not list the necessary details required, and miss an important part or aspect of the plan”, said Bauer.

“The maintenance within the scheme of any of the common property for the previous year, the current year and the following year should also be presented. With the specific information required, all the projects will be clearly defined and documented, which will help with more effective budgeting for maintenance”, said Bauer.

Larger sectional title schemes might need to employ a professional to survey the premises and compile the ten year maintenance plan, as this is something that the layperson might not be able to carry out with the necessary detail.

The second requirement in terms of regular maintenance is the provision for a reserve fund to be established, which goes hand in hand with the ten year maintenance plan. This is listed in the regulations of the STSMA and Annexure 1 of the Prescribed Management Rules. The suggested amount is to have 25% of the scheme’s annual Levy budget in reserve at all times, if it needs topping up from year to year, this should be done, and it is not necessary to pay in 25% of the levy budget each year.

The reserve fund should be in a separate account and separate financial records should be kept for this.

“Trustees might see this as creating much extra work, but a future maintenance and budget plan is very important when it comes to protecting the owners’ investments – proper maintenance helps hold property values and proper financial planning helps eliminate large special levy payments, which have been known to create very difficult financial situations for some sectional title owners,” said Bauer.

Reference:

  • eProperty News

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)

Vacant gardens and property rates

Posted on by

B3The purpose of this article is to explain the laws and policies that determine how property rates and other services are charged to erven that do not have residential homes on, but form part of the garden of a person’s residence.

Typical Example

The problem discussed in this article most commonly arises where a person’s home is comprised of more than one erf, and only one of the erven has the house build upon it (the other erf or erven being vacant and simply forming part of the garden that surrounds the home). It is necessary to distinguish at this point between situations where all of the erven concerned are notarially tied, as opposed to situations where they are not.

Notarial Ties Explained

A notarial tie is an act of registration that happens in the Deeds Office in terms of which certain erven that are contiguous (i.e. share a common border) and are located in the same township (suburb) are bound together such that they cannot be sold to third parties individually, without the others that they are tied to. In order to create a notarial tie one would need consent from the local authority (the Municipality) and the assistance of a Conveyancer to draft and register the notarial tie agreement against the title deeds of the properties concerned. If the properties are bonded then the consent of the bondholder will also be required before the notarial tie can be registered.

In most cases the registration of a notarial tie agreement against the title deeds of the properties concerned will result in the value of those properties collectively dropping somewhat. This is because the properties are no longer capable of being sold off individually and must be sold together as one big property.

Where there is a notarial tie

If the various erven are notarially tied it is the City of Johannesburg Metropolitan Municipality’s (“COJ”) policy to treat all of the erven concerned as if they were one big consolidated erf. The result of this is that the homeowner will be charged only once for rates (calculated on the cumulative value of all of the erven) in connection with one account (which is usually an account created in respect of the erf on which the house sits), as well as only once (again usually in connection with that same erf) for refuse removal services and water and/or electricity services, and sewer services, at the residential rate.

This precludes the duplication of charges for sewer and refuse services (by the levying of such charges only once, as if the property consisted of one large consolidated erf rather than by the levying of separate sewer and refuse charges for each of the individual erven).

If this policy is not applied and each of the erven were treated individually as if they were not notarially tied together and forming part of one dwelling, each stand would then receive a separate rates account with property rates based only on the value of that stand alone, together with refuse collection charges as well as sewer availability charges.

In extreme cases the municipality will charge the property owner for electricity and/or water services by linking those services to one of the erven that form the garden rather than the erf on which the house sits.

The result of this is often that because the vacant garden erven are classified as “vacant” rather than ”residential” in the municipality’s records, the services will be charged for at the vacant land rate, as opposed to the lower tariff applicable to residential properties.

This can be a very serious problem for a property owner as the charges for rates and sewer based on the vacant land tariff are significantly higher than the charges would have been on the residential tariff.

How to remedy the situation

The first step is to determine whether your properties are notarially tied. If they are then you need to lodge a Section 78 inquiry with the municipality’s Valuation Department asking for the municipality to consider all of the properties concerned as one property and to rate the property and to charge services for that property only on the stand on which the house sits, and all at the residential rate. This should trigger the property appearing on the next property valuation roll, which will allow the property owner to (if necessary) lodge an objection to the manner in which all of these properties are classified (because they will probably be classified as vacant stands because although they form part of the garden, where there is no house built on them they might then be classified on their own as vacant).

Conclusion

The manner in which the municipality charges for rates and services in relation to homes that consist of more than one erf, is relatively complex and there are many reasons why invoices in relation to same may not be correct.

If you are of the view or you suspect that you are being overcharged or otherwise incorrectly charged by the municipality in this regard, contact your attorney for assistance immediately.

The sooner that you take action the sooner the problem will be resolved and your charges will drop, alternatively the sooner you act the more likely it is that you will be able to obtain a refund retrospectively of amounts that you have historically been overcharged (although there is no guarantee in any situation that you will indeed be entitled to or receive a retrospective refund, as whether this is applicable depends on the facts of each case).

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)