January 31, 2022
KVV | A Note from our Director
Welcome to the end of the first month of 2022!
Are you still on path with the new year’s resolutions, or was it the first weeks to do list and nothing came from it? Whether you believe in new years resolutions or not, every new year brings an opportunity to reflect on your current position, status and then accept or challenge the status quo.
This topic reminds me of a great book, Atomic Habits by James Clear, the concept of small daily habits that compound to great results. We often first experience a ‘Plato’ before any big significant results. The key though, is to stay disciplined until the habit becomes a part of your new norm. According to James Clear, real results will be achieved if we focus on the systems to reach the goal and not on the goal itself. How are your systems and habits transpiring into your goals? Will they pave the way to personal and professional success?
According to many futurists, the biggest challenge of 2022 will be the mental health of our society. We often have clear milestones and actions in place to reach all the work and physical related goals in our lives but forget of the vital and pivotal goals of our mental wellbeing. We at KVV want to encourage you to set strong goals for your heart and mind in 2022.
It appears that we will see more employees returning to offices, the semi migration to continue to the Western Cape and an increase in interest rates to around 8%. We can continue to expect rapid change in the world of work and performance, so let us buckle up.
Whatever your circumstances, challenges, goals and habits, keep on growing, developing and building.
We will continue to foster our partnerships and relationship with you as we drive results that will contribute to you reaching your goals in 2022!
Kind Regards
Diaan Van Wyk | Director
January 31, 2022
How the Property Practitioners Act Affects You as a Property Seller, Buyer, Landlord or Tenant from 1 February
“… a property is an asset to enhance economic activity, growth and development…” (extract from preamble to the Property Practitioners Act)
The Property Practitioners Act (“PPA”) finally comes into effect on 1 February 2022. It has major ramifications for everyone involved in the property industry, but in this article we’ll concentrate only on aspects of particular importance to property sellers and buyers, and to landlords and tenants.
The PPA’s full definition of “property practitioner” is long and complex with some grey areas still to be clarified, but for our purposes let’s just note that estate agents and agencies, property auctioneers, property managers, bond originators and the like all fall into the definition.
We turn now to some of the more important changes which will impact on you from a practical perspective from 1 February –
New mandatory disclosures by sellers and landlords
It has always been best practice for sellers and landlords to make full written disclosures of any property defects or deficiencies known to them to prospective buyers and tenants, and to attach a list to the agreement of sale/lease. As regards residential leases, the Rental Housing Act already provides for both incoming and outgoing joint inspections. Now for both sale and leasing the PPA provides that no PP can accept a mandate without a “mandatory disclosure form” which must be provided to any prospective buyer or tenant, signed by both parties and attached to the sale agreement/lease. The form published in the new Regulations refers to sellers only so it is unclear (at date of writing) what form landlords are supposed to use but the form requires sellers to answer a series of questions (and certify the answers as correct) relating to defects (structural and other), to disclose any boundary line disputes/encroachments/encumbrances, to certify that the necessary consents and permits were obtained for any additions/improvements etc, and to disclose any historical structure/heritage site issues. There is also a catch-all “Additional Information” section. The form specifically states that it is not a substitute for any inspections or warranties so buyers/tenants should still insist on these in their agreements, but it does provide proof of any disclosure or non-disclosure of defects or deficiencies (there is a presumption against disclosure if no form is supplied). Sellers and landlords will want to tread with care here and, importantly, they are not the only ones at risk of being sued here – a buyer/tenant can hold the PP liable for not complying with these requirements.
When commission isn’t payable (and can be clawed back if already paid)
Commission is normally payable to a PP by the seller in a sale, or by the landlord in a letting arrangement. The PPA provides for two situations in which a PP cannot earn commission or any other payment, and in which you can claim repayment (on pain of prosecution for failure to repay) if you have already made payment –
- Estate agents have always had to hold a Fidelity Fund Certificate (FFC) in order to trade, and the PPA clarifies that in order to act as a PP, it is not enough for just the agency itself to hold an FFC – FFCs must also be held by all employed PPs and (if the agency is not a sole proprietorship) also all directors (if a company), members (if a close corporation), trustees (if a trust) and partners (if a partnership). Another safeguard is that the conveyancer handling the transfer is now obliged to obtain a certified copy of the PP’s FFC before making any commission or other payment.
- Another situation in which a PP cannot claim commission is if there is any breach of the requirement not to “enter into any arrangement, formally or informally, whereby a consumer is obliged or encouraged to use a particular service provider including an attorney to render any service or ancillary services in respect of any transaction of which that property practitioner was the effective cause.” This is presumably an attempt to curb the paying of referral fees to PPs for recommending or requiring use of a particular service provider, such as perhaps a particular transferring attorney, bond originator, compliance certification service etc, but at the end of the day as a seller or landlord your best interests are served if you insist on using your own professional advisors – the choice is yours and yours alone.
Other things to know about
- The Property Practitioners Regulatory Authority (“PPRA”) which replaces the Estate Agency Affairs Board, will enforce a Code of Conduct applicable to all PPs, and will provide mediation and adjudication services in the event of any disputes arising.
- As regards costs of documentation – sale agreements, leases and mandatory disclosure forms “must be drafted by the developer or seller, as the case may be, for his, her or its own account” (there is no specific mention of landlords).
As always with property transactions, there is just no substitute for specific professional advice and assistance here!
Disclaimer: The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.
© LawDotNews
January 31, 2022
Why Life Partners Still Need Cohabitation Agreements and Wills
“Census data of 2016 reveals that approximately 3.2 million South Africans cohabit outside of marriage and that this number is increasing steadily.” (Extract from judgment below)What happens if your life partner dies without leaving you anything in their will (“Last Will and Testament”)? Do you have the same protections as married spouses do? A lot of the media coverage around the recent Constitutional Court decision dealing with this question may have given the impression that life partners are now as fully protected as if they were in a formal marriage, but that is not so – not yet anyway. First, some background.
Protections for surviving spouses only, not for unmarried life partners
As a starting point, note that the widely-believed and persistent myth of a “common law marriage” is just that – a myth. And the hard truth is that if a life partner dies intestate (without making a will), the other cannot inherit on the same basis as can a married spouse. Nor can the surviving life partner claim maintenance from the deceased estate on the same basis as a surviving spouse can. Spouses enjoy these protections in terms of two Acts –- The “Maintenance of Surviving Spouses Act” provides for a spouse to claim maintenance from the deceased estate.
- The “Intestate Succession Act” deals with cases where a deceased spouse left no valid will and provides for a spouse to receive only a “child’s share” of the estate (in other words, to share equally with any children) – far from ideal of course if the intention was to leave them more, but a lot better than nothing.
The Court’s decision, and why life partners must still protect their positions
An unmarried man, although intending to marry his (female) partner, died before doing so. He left substantial assets but his will was outdated, leaving everything to his (since deceased) mother. The executor of his deceased estate rejected, primarily on the basis of existing law, her claims to inherit from the estate or to be granted maintenance from it. Confirming High Court declarations of constitutional invalidity, the Constitutional Court held the relevant sections of the Acts to be invalid as they stand, and ordered that they be read so as to include life partners in their protections. However there are critical limitations to bear in mind –1) The orders of invalidity aren’t in force yet.
The Court suspended the orders for 18 months (to June 2023) to give Parliament time to remedy the defects. Perhaps Parliament will move quickly on this and do the necessary before mid-2023, but perhaps it won’t. And in the meantime, your lack of protection remains.2) You will still have to prove your entitlement.
You will have to convince the executor and Master of the High Court (possibly in the face of opposition from the deceased’s other family members) that –- You were in “a permanent life partnership” (our courts apply a number of tests in assessing this),
- As partners you “undertook reciprocal duties of support” (in this case the partners were held to have been “involved in a relationship that comprised most, if not all, characteristics of a marriage”),
- For your maintenance claim, that your claim is for your “reasonable maintenance needs”, and
- For your intestate succession claim, that you have “not received an equitable share in the deceased partner’s estate”.
3) “Intestate” Succession is always second prize.
As we said above, a “child’s share” of an estate is a lot better than nothing, but if you want your partner to inherit everything, dying without a will risks prejudicing them badly. Leaving a valid will is the only way to nominate the executor of your choice, and to choose for yourself what happens to your estate on death. It could well be the most important document you ever sign.Life partners: Sign wills and a cohabitation agreement – now!
That’s a lot of uncertainty and potential for conflict and delay, and there could well be a lot at stake (in this case, some R10m worth of assets in total) but the good news is that it is all very easily avoided –- Have professional wills drawn up (or have your existing wills checked for necessary changes or updates) and
- Enter into a full cohabitation agreement recording exactly what your status is and what undertakings you make to each other. Remember there is no such thing as a “common law” marriage in South Africa – if you aren’t formally married, a cohabitation agreement is the only safe alternative.
© LawDotNews
January 31, 2022
Can Your Tenant Claim a Lockdown Rental Remission?
“It would thus be prudent that a commercial lease agreement includes a clause dealing with the risk associated with vis maior, casus fortuitus and the impossibility of performance.” (Extract from judgment below)The Covid-19 pandemic and its associated lockdowns and restrictions have impacted negatively on many businesses, and there has been much uncertainty as to whether commercial tenants of leased property are entitled to claim a remission of rental if their trading activities are curtailed. A recent High Court decision throws some light on this knotty question, and with the pandemic showing no signs of letting up, all commercial landlords and their tenants should be aware of it.
The steakhouse closed by lockdown regulations
- The Greenpoint Butcher Shop and Grill, a “well-known premium steakhouse restaurant”, was forced to close during the “hard lockdown” period.
- Sued by its landlord for just under R3m in arrear rental, the tenant raised as one its defences that the lockdown regulations had closed its doors for the duration of the hard lockdown, with only reduced trading possible as restrictions thereafter eased. This had rendered it impossible for it to perform its obligations in terms of the lease, plus “a supervening event made performance impossible and thus there was thus no beneficial use of the leased premises for the purpose for which it was intended.” The landlord, it said, had been unable to give it “beneficial occupation” and it was entitled to a remission of rental accordingly.
- The landlord replied that in terms of the lease, all amounts due had to be paid “free of deduction and set-off”, the tenant’s problems arising from the lockdown regulations did not excuse it from paying rental, and the full amount was still due.
- Before we get to the eventual outcome of this case (spoiler alert – it doesn’t end well for our unhappy tenant) the Court’s analysis of our law on the matter provides some useful and practical advice for both landlords and tenants.
Firstly, let’s understand “the Latin bits”
Apologies for inflicting legalistic Latin terms on you but a basic understanding of these two is important for landlords and tenants, particularly as you may well come across them in the Ts and Cs of a lease in the context of “supervening impossibility of performance” –- Vis maior (or vis major), means ‘superior force … some force, power or agency which cannot be resisted or controlled by the ordinary individual’.
- Casus fortuitus, or “inevitable accident”, is a type of vis major, which ‘imports something exceptional, extraordinary, or unforeseen, and which human foresight cannot be expected to anticipate, or which, if it can be foreseen, cannot be avoided by the exercise of reasonable care or caution’.
When is rental remission allowed?
- Our law is that “a lessor’s duty is to deliver the leased property in a proper condition and that the property is to be placed at the disposal of the lessee for its undisturbed use or enjoyment”.
- Thus the general rule is that, unless the lease specifically provides otherwise, a tenant can claim rental remission “where there is a deprivation of or lack of beneficial use or occupation …, partially or fully, of the leased premises, and where the interference is caused by vis maior or casus fortuitous, neither of which eventuality is the fault or cause of either the lessor or lessee”.
- Critically, the Court in this case held that “the COVID-19 regulations passed in terms of the Disaster Management Act would amount to vis maior or casus fortuitous” (emphasis supplied).
- A tenant can set off a rental remission against the landlord’s claim for non-payment of rental only “if it is capable of speedy and prompt ascertainment”.
- Each matter must be considered in light of all the facts – “the specific regulations applicable at the relevant time(s), the extent to which performance was not possible, the extent to which there was a lack of beneficial occupation (if any)” and the provisions of the lease. This last is a critical point – the tenant’s obligation to pay rental remains, even where the impossibility of performance is not due to his fault, “where the parties specifically provided in their agreement that the lessee would be responsible for and/or take the risk upon himself for the impossibility supervening” (emphasis supplied).
The sub-tenancy that sank this tenant’s defence
In the end however, the tenant was ordered to pay the full amount of rental outstanding. Its problem was that it had effectively sub-let the premises to another legal entity. In a case of sub-lease, held the Court, the landlord’s obligations are towards the tenant, not towards the sub-tenant. The steakhouse being a sub-tenant, it could not claim rental remission from the landlord. Neither could the tenant claim remission of rental because it was not itself in possession and control of the premises. An appeal against this aspect of the judgment is pending. As an interesting side note (which could be of use to you if you are a sub-tenant or have sub-let to one) there is much discussion in the judgment around an old 1902 Transvaal Supreme Court (TSC) case. A hotel had been forced to close after the government of the time had prohibited the sale of liquor by hotels and bars, and it had re-opened only temporarily when forced to house military forces during the war. The TSC allowed rental remission even though a sub-lease was involved, apparently on the basis that the tenant and sub-tenant in that matter were “one and the same”. In contrast, in our 2021 steakhouse case the tenant and sub-tenant were found to be totally separate legal entities, so the 1902 case was in the end of no help to the tenant. Nevertheless the principle has been established that in certain cases a sub-tenant may be able to argue for remission.The Court’s advice to commercial landlords and tenants
As the Court put it: “It would thus be prudent that a commercial lease agreement includes a clause dealing with the risk associated with vis maior, casus fortuitus and the impossibility of performance.” Landlords – have your leases checked immediately to ensure that you are covered against any possible rental remission claims. Tenants – you will want to negotiate any such clause to give you some leeway should disaster strike. Otherwise be ready to bear the consequences if the pandemic (or indeed any other unforeseen disaster) should suddenly force you to close your doors. Think also of tying this in with some form of business interruption insurance. Disclaimer: The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.© LawDotNews
January 31, 2022
Divorce: Claiming Interim Maintenance and a Contribution to Legal Costs
Even if your marriage is collapsing around you, you might be afraid to sue for divorce because you have no money to survive on, plus you know that a hotly contested divorce might take years to finalise while your breadwinner spouse fights you tooth and nail every step of the way. How will you support yourself and your children until the case is finalised? How will you pay your lawyer to run the case for you? Must you wait for the end of the case before you see a cent? The answer luckily is “no” in that you have a relatively quick and simple remedy in the form of asking the court for “interim relief” in respect of –- An order that your spouse pay you –
- Maintenance (for children and/or for yourself) pending finalisation of the divorce,
- A contribution towards your costs in the divorce proceedings,
- Interim care of, and contact with, your children (if there is any dispute over this aspect).
A “coy about his wealth” spouse ordered to pay up – now
- The warring spouses here are a senior banking executive and his wife, who qualified as a teacher but gave up that career to become a homemaker and mother to the couple’s two children.
- She asked the High Court for interim maintenance for herself and the children, and for a contribution to her legal costs.
- In assessing these requests the Court laid out some of the general principles involved –
- Unless the care and residence of children is involved the issues are straightforward, relating to “the applicant’s reasonable needs, and the respondent’s ability to meet those needs. The applicant’s entitlement to maintenance must be assessed having regard to the standard of living enjoyed by the parties during the marriage.” This should be “a simple and straightforward calculation of needs and means”. (Emphasis supplied).
- The aim is “to avoid substantial prejudice to either party pending divorce. It is not to provide a precise account of what is due to or from either party, according to the parties’ or the court’s sense of morality, propriety, the blameworthiness of the parties’ conduct during the marriage, or their habits of living after the separation.” The case should be cast in practical rather than moralistic terms, and the “emotional heat of a separation” should be kept out of it.
How much money could you be awarded?
Of course every case will be different, but where the parties have, as in this case, enjoyed a high standard of living, the figures can be substantial. Here for example the Court’s awards were sizeable, commenting that the husband “is coy about his wealth, but there is little doubt that he has a substantial income” – just under R7m in the previous year – with “considerable resources” and an estimated net worth of just over R40 million. Moreover the couple had enjoyed “a very comfortable lifestyle” together. The end result is that the husband must pay substantially what his wife asked for in the form of R1.6m immediately and thereafter R108k p.m. –- R88,701-69 p.m. for the wife and children’s interim maintenance, plus school fees, extra mural activity costs, medical aid and medical costs
- Rental of up to R20,000-00 p.m., plus cost of utilities
- R34 656.39 for house moving costs
- R1,572,945-80 as a contribution towards the wife’s interim legal costs.
© LawDotNews
January 31, 2022
Using the New Cybercrimes Act to Protect Yourself
“…cybercrime has increased by over 300% during the COVID-19 pandemic – making it one of the biggest threats to businesses around the globe.” (Property 24 report)The Cybercrimes Act, which has been years in the making, is now (with effect from 1 December 2021) at last largely in force. Although some provisions still remain on hold (most notably some of those relating specifically to “revenge porn” and the granting of protection orders), a whole range of unlawful cyber-related activity has now been specifically criminalized. The police have also been given wide powers of investigation, search, access and seizure, and the penalties for contraventions are substantial. The pandemic-forced shift to a “work from home, shop and communicate online” culture has reportedly seen cybercrime rocketing by 300%. As always our best protection from online criminals is prevention, but for anyone unfortunate enough to fall victim to them at least the new Act now provides us all with a layer of legal protection we haven’t had before – but only if we actually use it and report cybercrime.
The new crime categories
The Act’s provisions are detailed and complex, so this is of necessity just a very brief summary. But for most practical purposes what you need to know is that both individuals and organisations now face prosecution for any –- Unlawful access to a “computer system” or “computer data storage medium” (i.e. “hacking”).
- Unlawful interception of or interference with data, computer programs, data storage mediums and systems.
- Unlawful acquisition, possession, provision or use of passwords, access codes and the like (PINs, access cards and devices included).
- Cyber fraud, forgery, extortion and theft.
- “Malicious communications” (which would by definition include messages sent by email or via Social Media channels, WhatsApp and the like) to the general public, individuals or groups that –
- Incite damage to property or violence to a person or persons,
- Threaten a person or persons with damage to property or violence,
- Disclose a “data message of an intimate image of a person” without that person’s consent, and regardless of whether the victim is identifiable in the image itself or only from a description or other related information. Moreover the image can be “real or simulated”.
A particular warning to Social Media users
Posting or sharing anything prohibited by the Act – perhaps particularly any of the types of “malicious communication” referred to above – could land you in some extremely hot water. Think before you post!What about “revenge porn”?
As noted above, some of the Act’s provisions relating specifically to “revenge porn” are not yet in effect, but there are already prohibitions against it in other legislation, plus the offences mentioned above relating to disclosure of “intimate images” should at least partially assist victims in the interim. Disclaimer: The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.© LawDotNews