Tag Archives: property

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 These restrictions were uplifted in 2003 by the new Immigration Act (“the Act”) which repealed the Aliens Control Act and many of its restrictive provisions and now clearly defines who a legal foreigner is and who is not.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)

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)

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)

How does inheritance work?

Posted on by

B2When someone dies they normally have what is called a ‘will’. The people who benefit from this ‘will’ are known as the heirs. Upon someone death, the heirs receive an ‘inheritance’. The person who administers the will of the deceased is called an ‘executor’.

What legislation affects inheritances?
.

South Africa’s inheritance laws apply to every person who owns property in South Africa.

The three main statutes governing inheritances in South Africa are:

  1. The Administration of Estates Act, which regulates the disposal of the deceased’s estates in South Africa;
  2. The Wills Act, which affects all testators with property in South Africa;
  3. The Intestate Succession Act, which governs the devolution of estates for all deceased persons who have property in the Republic and who die without a will.

All property located in South Africa is subject to these laws, and there are no separate laws for foreigners. Immoveable property is not treated any differently to other types of moveable assets for inheritance purposes. Inheritance issues of foreigners and South African citizens are primarily dealt with by the Master of the High Court; however, if a dispute arises, then the case can be heard in any High Court of South Africa.

Foreigners who acquire immovable property in South Africa through purchase or inheritance must register their transfer of ownership by registering a deed of transfer with the Registrar of Deeds in whose area the property is situated. The process of registering a deed of transfer is carried out by a conveyancer, or specialised lawyer, who acts upon a power of attorney granted by the owner of the property.

Tax and inheritance

In South Africa, there is no tax payable by the heirs who get an inheritance. Capital Gains Tax (CGT) is also not payable by the recipient of an inheritance. Estate Duty and CGT, where applicable, are usually payable by the estate. If it is a foreign estate, it will be subject to the taxes of its country of origin.

What about donations or gifts?

Donations and gifts are treated differently to inheritance. For individuals, donations are subject to a Donations Tax of 20%, with an annual exemption of up to R100,000 of the value of all donations made during the tax year.

  • Non-residents are not subject to Donations Tax. However, in cases where the resident donor transfers his property to a non-resident (donee), and the resident donor fails to pay the Donations Tax, the non-resident (donee) and the resident (donor) will be jointly and severally liable for the tax.
  • Donations between spouses are exempt from Donations Tax, as are donations made to certain public benefit organisations.

Reference

  • The South African Revenue Service (SARS)

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)

Engineering contribution figures

Posted on by

B1Sections 20(2)(c)(i), 48, 63 and Chapter 5 of the Town Planning and Townships Ordinance 15 of 1986 (“the Ordinance”) deal with the levying and payment of engineering contribution figures. These are essentially amounts payable by a person who has applied for rights to change the use of a property, in order to facilitate the upgrading of necessary engineering services (such as roads, sewers, pavements, parks, and any other upgrades necessary to facilitate the proposed use of the property). Engineering contribution figures may also become payable when a property is subdivided. This article explores what they are, how they arise, and the legalities surrounding levying and payment of engineering contribution figures.

Brief explanation – amending land use rights*

A property’s ‘default’ land use rights are contained in the applicable town planning scheme. Each municipality has one (or more) and they only apply to a certain area. These town plainning schemes essentially dictate what uses a piece of land can lawfully be put to. If an owner wants additional rights or different rights to use the land in a manner other than prescribed by the scheme, an application can be lodged to obtain these rights. If this application is granted it will result in an amendment to the ‘master’ town planning scheme, which we refer to as an amendment scheme. Every property that acquires different land use rights by way of an application, thus has its own amendment scheme approved for it, giving it different rights to those prescribed in the applicable town planning scheme.

Application can be made by an owner or a person acting on behalf of an owner to amend land use rights. This would be necessary where the existing land use rights do not cater for the future intended land use. An application can be made for consent use (this is where the existing land rights provide that the land can be used in the manner proposed, if consent is granted) or for rezoning (where the existing land use rights provide that the land cannot be used for the proposed use, and it is necessary to apply to put the land into a completely different ‘zoning’, in order to ensure that the future use of the land for the intended purpose, is lawful). Both of these applications are made on prescribed forms against payment of a prescribed fee and with certain prescribed supporting documentation.

The municipality’s Land Use and Management (also known as Town Planning) department decides on the applications after having circulated them for comment to the relevant internal departments that provide services within the municipality’s jurisdiction. A decision is then made to deny or grant the application in whole or in part, sometimes on certain conditions, which may (and often) include the payment of amounts for engineering contributions, or to deny it. An appeal can be lodged if a person is dissatisfied with the initial decision.

When the applicant is happy with the decision, he submits documents called “MAP3’s” which depict what the amendment to the town planning scheme will look like – this is the draft amendment scheme. When the municipality is satisfied that all conditions prescribed by it and by law have been complied with, it publishes a notice advertising to the public that the land use rights applicable to the property have been amended. This is called ‘promulgation’. It is only on promulgation (and in certain instances referred to below only thereafter) that an amendment scheme comes into effect and the additional/different land use rights might be used.

At what point in the process are engineering contribution figures calculated? Ideally this should happen before the applicant is advised of approval, when the municipality advises the application of the conditions upon which the land must be rezoned (which usually includes payment of engineering contribution figures) so that the applicant can appreciate and budget for the financial consequences of going through with the rezoning application. In practice, however, this is not the case, and engineering contribution figures are usually only calculated after approval. However, municipalities are aware that their window to demand payment is small, and so they usually ensure that the figures are ready before promulgation.

Who must pay?

  • The Ordinance provides in respect of engineering contribution figures payable as a result of the approval of consent use, that the person to whom the consent is granted (who might not be the owner) must pay.
  • When a rezoning occurs, the owner must pay.
  • In practice, if a person who is not the owner wants to make an application for amended land use rights, the municipality requires the owner to authorize such person, so where a developer has asked an owner for permission to apply for a rezoning pursuant to an offer to purchase concluded for the property on the condition that it is granted amended land use rights, it is usually the developer who pays, by agreement with the owner.

Who can make a demand for amounts payable?

  • An amount for engineering contribution figures may be levied either in agreement with the applicant or (in the absence of agreement) the amount will be determined by a committee called the Services Appeal Board of the municipality upon the making of an application for same.
  • Where the proposed land use will bring about a higher density of dwellings, then the municipality will determine the amounts payable.

How much can be demanded?

Any amount necessary (as determined by the municipality or Services Appeal Board) to upgrade any/all engineering services to the property, in order to facilitate the upgrading for the proposed land use, can be demanded.

What if the amount demanded is unreasonable?

An appeal can be lodged if the owner/applicant/any interest party is not satisfied with the initial decision.

Who can lodge the appeal, in which circumstances, and to whom the appeal lies, varies depending on what type of application is brought and by whom. The Ordinance provides that any person who is aggrieved by a decision as to the amount of engineering contributions payable in a consent application, or an owner in a rezoning application, can lodge an appeal for reconsideration of the matter. However, an appeal must be lodged within relatively truncated time frames and thus this would not be available to a person who finds out some years after the engineering contribution figures have been levied, that there are amounts owing.

What if the engineering contribution figures make the development too expensive?

  • An owner can apply to the municipality to repeal the amendment of the town planning scheme, in terms of which additional rights for the proposed use the property were approved. This will allow the owner to avoid payment of all amounts claimed for engineering contribution figures.
  • Alternatively the owner can apply again to change the land use rights, by lodging another rezoning/consent application for different land use rights, that will require less upgrades of engineering services, and will thus attract a much lower engineering contribution.
  • Strictly speaking, however, these options are only open for a limited time after the municipality has told the owner what amounts are payable, and so it would not usually be open to an owner who has purchased from someone else and has now discovered that there are unpaid engineering contributions registered against his/her land, to make use of these options.

When and how can payment of engineering contribution figures be demanded?

The municipality can only demand payment of engineering contribution figures in a narrow ‘strip’ of time – within 30 days of commencement of the amendment scheme. In terms of the Ordinance, an amendment scheme commences when the notice is promulgated.

This is subject to the proviso that if there were objections or the approved scheme was subject to amendments, that the amendment scheme will only come into operation on a date not less than 56 days from the publication of the notice. The amounts must be demanded by way of registered post.

When do engineering contribution figures become payable?

This is a different question to when the amounts payable can be demanded. The Ordinance expressly state that engineering contribution figures are payable before a clearance certificate is issued, or before building plans are approved that would facilitate the amended land use, or the additional or altered land use rights are used. This is significant because this means that the person who applies for those additional rights, should be called upon to pay them by the municipality before the property is transferred to a new owner. In the view of the authors, this is a clear indication that the legislature intended that the person who originally applies for those rights should be called upon to pay them, unless that person makes an agreement with a third party (for example a developer or a purchaser) to take over that responsibility.

Can payment arrangements be made or security be given for payment?

A municipality is empowered to allow payment in instalments for a period up to three years, or to postpone payment for a period up to three years, and in making alternative payment arrangements to impose any other reasonable condition on such arrangement, including the levying of interest on amounts outstanding. Provision is also made for a municipality to accept an undertaking from a purchaser that it will pay the contributions at a later date in certain circumstances, allowing transfer to go through and the rates clearance certificate to be issued before the contributions have been paid.

What are the consequences of non-payment?

If the amounts demanded are not paid, or arrangements for payment/security made, the additional land rights may not legally be used (even if approved and even if promulgated) until the engineering contributions are paid. In addition, building plans should not be approved nor should any clearance certificate to pass transfer be issued. Any person who uses land in contravention of a town planning scheme is guilty of a criminal offence and may be liable to a fine or imprisonment. For every day that a person remains in contravention of the Ordinance, the fine can increase by R 100 and/or the period of imprisonment by 10 days. The municipality can also enforce the provisions of the scheme if the responsible person refuses to, by demolishing buildings if necessary.

Can rezoning be finalized without payment of the engineering contribution figures?

Yes, in fact it must. The last step in rezoning is promulgation, and only after promulgation can a municipality legally demand engineering contributions. This means that the municipality must ‘give’ the landowner the amended rights before demanding payment for them. However, as above, the additional land use rights are not meat to be utilized before the engineering contribution figures levied in connection with same have been paid.

Can transfer be passed without payment of the engineering contribution figures?

Yes, transfer can pass before engineering contributions have been paid. This happens often. There are two typical scenarios. The first is where an owner applies for additional rights, they are approved, but they are never promulgated and so the additional rights never actually ‘kick in’. If this happens and an owner applies for a rates clearance certificate to transfer the property, the municipality will provide the certificate without demanding payment of the engineering contributions applicable, because the time has not yet come at which the municipality is even legally allowed to claim those contributions (this is only permissible on promulgation). If the new owner then wants to use those additional rights, he will have to promulgate the amendment scheme and then pay any engineering contribution figures called for.

Problems arise here if the purchaser bought the land thinking that the seller had already paid all amounts necessary for the additional rights to ‘kick in’. If the seller has represented that this is the case to the purchaser, then the purchaser will have a claim against the seller for a refund of amounts paid for engineering contributions, but if the seller sold the property with the additional rights approved but not promulgated and did not represent to the purchaser that the property carried the additional rights, the purchaser is then able to, at his own cost and in his own time, and if he wants to, promulgate and then use the additional rights. If the purchaser never wants to use the additional rights, he does not have to, in which case he will not attract any liability in the form of engineering contributions for the additional rights because they will never be promulgated and the municipality will never be entitled to demand payment of the engineering contributions.

The other scenario is where a seller has rezoned a property and promulgation has occurred, meaning that the additional rights applied for have already come into force legally. In this case the municipality should require payment of the engineering contributions before transfer can pass to the purchaser, at the stage when the seller applies for the rates clearance certificate to facilitate transfer. If the municipality fails to do this, however, the property will pass to the purchaser and the municipality may then look to the purchaser for payment of these contributions either when the purchaser wants to use those additional rights, or have building plans approved, or wants to re-sell the property. This is where problems really arise because the purchaser is then held liable for amounts that the seller should have paid when the property was originally transferred. In such a case, if the purchaser is forced to pay these amounts, he will have a claim against the seller for a refund.

Do engineering contribution figures prescribe?

There is no law on the issue, but in our view, engineering contributions prescribe after three years, because they are more akin to ’fees’ charged by a municipality for the supply of services or upgrade of infrastructure in order to supply services to a property, than they are to ‘rates’, which are monthly charges billed to all properties of a certain type, based on a cent-in-the-rand ratio. However, this argument has not yet been brought before a court and so we would caution buyers to check whether they will become liable for engineering contribution figures at some stage in the future before they purchase a property to avoid the inconvenience and potential loss that could arise from having to pursue a claim (successfully or unsuccessfully) against a seller for a refund of amounts paid for engineering contributions.

 * For the purposes of this article only the general principles are referred to, so there may be slight variations to what is described above depending on which type of application you make and the internal requirements of the municipality to which the application is made.

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)

Is the tenant or landlord responsible for the water leaks?

Posted on by

B4Questions, and sometimes disputes, often arise between landlords and tenants regarding where the responsibility lies with the maintenance of a property. The simple answer is that tenants can generally only be held responsible for repairs/replacement on the property if the damage was caused by the tenant’s actions, or items that have a short life span, such as light bulbs.

On the other hand, alarm systems, auto gates and doors, locks, fixtures and fittings, appliances, or anything provided to the tenant are generally the responsibility of the owner to repair, unless damaged by the tenant.

Fair wear and tear

Damage due to fair wear and tear is the owner’s responsibility to correct. This includes situations where the property has, over time, experienced wear due to its use or age.

Examples would include:

  1. Fireplace chimneys: The landlord should maintain the fireplace e.g. having the chimney cleaned at appropriate intervals. Gardens, however, would require the tenant to do general maintenance.
  1. Blocked drains: This is usually due to tenant usage making it the tenant’s responsibility, but if blockage is due to tree roots, it would be the landlord’s responsibility.

Regarding appliances, as with any fixture or fitting, the landlord is responsible for repairs to appliances provided under the tenancy agreement unless the damage was caused by the tenant’s deliberate actions or negligence.

Tenants should report any damage on the property. If they fail to do this, they could find themselves held liable for any further damage due to lack of immediate attention to the initial problem. Furthermore, tenants are obliged to provide access for contractors to effect repairs.

Conclusion

If there is a water leak on the property, it would most likely be the landlord’s responsibility to fix. It is advisable for tenants to read and understand the lease agreement fully and for landlords to list as much as possible that needs to be maintained by the tenant. For example, if the unit has a garden that the tenant is responsible for maintaining, this should be mentioned in the lease.

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 does the Deeds Office do?

Posted on by

A4BThe Deeds Office is responsible for the registration, management and maintenance of the property registry of South Africa. If you are planning on buying a house, it can be useful knowing about the Deeds Office. However, you would use the services of a conveyancer when buying or selling a house. Your estate agent should be able to recommend a conveyancing attorney to register your home loan and transfer a property into your name.

What is conveyancing?

Conveyancing is the legal term for the process whereby a person, company, close corporation or trust becomes the registered and legal owner of immovable property and ensures that this ownership cannot be challenged. It also covers the process of the registration of mortgages.

Steps taken by the conveyancer:

  1. The conveyancer lodges your title deed and other documents in the Deeds Office for registration. These documents will be individually captured on the system. If there is a bond, the conveyancer dealing with the bond will lodge the bond documents with the Deeds Office at the same time as the transfer documents. The transfer, bond and cancellation documents must be lodged in the Deeds Office at the same time to ensure simultaneous registration. If different conveyancers are dealing with registering the purchaser’s bond and cancelling the seller’s bond, then they will need to collaborate.
    .
  2. The Deeds Office examiners go through the documentation that has been submitted, and make sure that it complies with the relevant laws and legislations.
    .
  3. The examiners then inform the conveyancer that the deeds are ready to be registered.
    .
  4. Registration takes place with the conveyancer and Registrar of Deeds present. The transfer of the property is then registered in the purchaser’s name. If there is a bond, it is registered at the same time.
    .
  5. Upon registration, the purchaser becomes the lawful owner of the property. The title deed that reflects this ownership is given to the conveyancer by the deeds office after the registration. Unless a bond has been registered as well, in which case the title deed is given to the bond holder.

The time taken to register a property at the Deeds Office depends on various factors and a number of parties. On average, registering a property transfer takes six to eight weeks, although unforeseen difficulties can cause the period to be extended.

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)

Co-owning property with someone else: The ups and downs

Posted on by

A3BWhat is co-ownership?

Co-ownership is when one or more people jointly own the same property. In essence, it is when they legally share ownership without dividing the property into physical portions for their exclusive use. It is thus commonly referred to as co-ownership in undivided shares.

It is possible to agree that owners acquire the property in different shares; for instance, one person owns 70 percent and the other 30 percent of the single property. The different shares can be recorded and registered in the title deeds by the Deeds Office.

The benefits

On paper, it’s a great idea. For starters, the bond repayments and costs of maintaining the home are halved. However, there can be problems and although not every friendship or relationship is destined to disintegrate, there does often come a time when one of the parties involved wants to sell up and move on to bigger and better things.

The risks

If ownership is given to one or more purchasers, without stipulating in what shares they acquire the property, it is legally presumed that they acquired the property in equal shares.

The risks, the benefits and the obligations that flow from the property are shared in proportion to each person’s share of ownership in the property. For instance, one of the co-owners fails to contribute his share of the finances as initially agreed, resulting in creditors such as the bank or Body Corporate taking action to recover the shortfall.

Having an agreement

If two people own property together in undivided shares it is advisable to enter into an agreement which will regulate their rights and obligations if they should decide to go their own separate ways.

The practical difficulties that flow from the rights and duties of co-ownership are captured by the expression communio est mater rixarum or “co-ownership is the mother of disputes”. It is therefore important that, when the agreement the co-owners entered into does not help them solve disputes, certain remedies are available to them.

The agreement should address the following issues:

  1. In what proportion will the property be shared?
    .
  2. Who has the sole right to occupy the property?
    .
  3. Who will contribute what initial payments to acquire the property.
    .
  4. Who will contribute what amounts to the ongoing future costs and finances.
    .
  5. How the profits or losses will be split, should the property or a share be sold?
    .
  6. The sale of one party’s share must be restricted or regulated.
    .
  7. The right to draw funds out of the access bond must be regulated.
    .
  8. A breakdown of the relationship between the parties.
    .
  9. Death or incapacity of one of the parties.
    .
  10. Dispute resolution options before issuing summons.
    .
  11. Termination of 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)