KVV Inc. Attorneys

Lending to a Friend or Relative – When Must You Register as a Credit Provider?

KVV Inc Attorneys

Published on: 04/03/2025

Lending money to friends or family can be risky. While it seems natural, if the loan isn't "at arm's length" (a formal business arrangement) it may not fall under the National Credit Act (NCA). A recent case highlighted this, where a R15m informal loan between friends was deemed outside the NCA, saving the lender. However, relying on informal agreements is dangerous.

Credit Law

Lending to a Friend or Selling Property on Credit – Must You Register as a Credit Provider?

KVV Inc Attorneys

Published on: 04/03/2025

Lending money, even to friends or family, can be risky. A recent Supreme Court of Appeal ruling highlights the complexities of the National Credit Act (NCA). Even one-off loans, including deferred payment property sales, may require lenders to register as credit providers. Failure to do so can invalidate the agreement, potentially costing the lender the entire loan amount. While some exclusions exist, such as certain family loans, the "arm's length" principle is key. If any independence exists between parties, the NCA likely applies. Seek legal advice before any lending arrangement, as registration involves red tape.

Business

Don’t Give a Loan or Credit to Anyone (Not Even a Friend) Without Legal Advice!

KVV Inc Attorneys

Published on: 04/03/2025

Lending money without registering as a credit provider under the NCA is risky. Unregistered lenders risk losing the entire loan amount, even if a settlement agreement exists, as courts may find the agreement unlawful and invalid. The NCA protects borrowers and requires credit providers to assess affordability. Even single loans of any amount fall under the NCA, and while courts have some discretion to make a "just and equitable" order, there's no guarantee. Always seek legal advice before lending.

Debt recovery

The Trouble with Family Loans: A R540,000 Lesson

KVV Inc Attorneys

Published on: 04/03/2025

Family loans can be risky. A recent court case highlights the importance of written contracts, even with family. In this instance, parents lost R540,000 because they couldn't prove a loan agreement with their daughter. Without a contract specifying terms, repayment, and intent, family ties offer no protection.

Credit Law

KVV Inc. Attorneys: Celebrating 10 Years of Excellence in Property Law and Conveyancing.

Fostering Partnerships, Driving Results.

KVV Inc. Attorneys: Celebrating 10 Years of Excellence in Property Law and Conveyancing.

Fostering Partnerships,

Driving Results.