How to approach property purchases post-lockdown
At the end of the national lockdown, many South Africans will have gotten to know their properties better than the architects who designed them. For some, this time will lead to ways they plan to improve their homes, for others, it will leave them desperately wanting to never see the same four walls again. But how do you enter the buying market again after the lockdown? The answer is, with extra care. While buying property is never something to step into lightly, the chances of making an impulsive decision once you’ve tasted freedom again are a lot higher than they were before. The best advice would be to treat the experience as if nothing has changed. For the real estate market, this may even be somewhat true. The real estate market has proven time and again that it is able to recover from even the worst crises, whether it be financial, social or medical. The reason for the market’s stability lies in its properties’ stability. While stock markets crash and abstract financial concepts such as inflation crumble during a pandemic, properties continue to stand unaffected. And while stock trading is quite low on the priority list during a worldwide pandemic, such as the COVID-19 outbreak, a priority that is still at the top is the need for housing. The real estate market, by nature, prevails. So once the lockdown is lifted, don’t rush things. Use the same diligent consideration in every decision and make sure you invest accordingly. That said, there is one way in which the lockdown should influence your purchase. Use the negative experiences and shortfalls of your current (or soon to be previous) home to help guide you towards what it is you truly need and want in a home. An experience that may have seemed negative will help you to create a clear vision of what your next home should be. Once the lockdown has lifted, precautionary measures may still be put in place, especially regarding social distancing, nevermind people’s own fears of entering society again. The introduction of the Electonic Deeds Registration System, introduced at the end of 2019, will further assist the restoration of the property market even as the scare of the pandemic continues to loom over the country even after the lockdown has been lifted. This electronic platform allows property ownership to be transferred without having to set a foot inside a cramped government office, effectively continuing social distancing and creating a more efficient conveyancing process. So keep calm and plan your property comeback accordingly. 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 real estate market catering to everyone?
Knowing who’s in the lead when it comes to the property market is difficult. The traditional progression used to be: Finish your studies; find a job in which you’ll stay until retirement; get married; buy a starter home; start a family; work hard and finally retire. That tradition has faded away entirely. The generational divide is nowhere more apparent than in the property market. But is the property market evolving as quickly as society? And is the change happening where it needs to? Statistics show that the average age of home buyers is 44, smack dab in the middle of the Generation X age bracket, which is 38-53. But Gen Xers may have taken in a difficult niche in the real estate market. Currently, more focus is placed on the generations on both other ends, the Millennials (22-37) and Baby Boomers (54-72), trying to accommodate an older generation that is still thriving and looking for ways to enrich their lifestyles, while also trying to find ways to shape the market for the younger generations. On one hand, Gen Xers are often as up to date with technology as Millennials, being comfortable with the digital evolution they’ve been a part of since their first antennaed mobile phones and orange-screened Dos computers. In The Dark Knight Rises, Bane says to Batman, “You merely adopted the dark; I was born in it, moulded by it.” With Generation Xers, it may be the fact that they had to adapt to the changing world and be moulded by it that gives them the head start in the real estate market. On the other hand, Gen Xers are more settled in their careers and focused on their families, bringing with them similar financial stability as Baby Boomers. What makes the Gen X generation so uniquely placed in the economy, is that they incorporate the best of both worlds — being more financially stable, and looking for that stability in their real estate as well, just like the Boomers; but also being able to utilise the advantages of technology and be as connected with the world around them as the Millennials. That said, Baby Boomers are still proving to play an increasingly active part in the shaping of the real estate industry as the norm of retirement accommodations and “old age homes” drastically fall out of vogue. Those nearing retirement no longer want to be locked up in a room that is barely bigger than a school boarder’s hostel room and have three meals and a corner-mounted television provided in the common room. Thanks to improved health, with regular exercise and a healthier diet, Baby Boomers are looking for ways to make the most of their lives after retirement, creating a demand in the real estate market that had been missing for a long time. Millennials, while still the largest percentage of first-time home buyers, owning roughly 38% of the market, play a reasonably small part in property sales. But Millennials choosing to rent rather than buy may be out of their hands if one considers the inflation rate was 5.2% in 2018, and salary increases only averaging at 4.9% (resulting in a take-home increase of only about 0.4%, according to BankservAfrica’s Take-home pay Index). Many Millennials are only now entering their careers, and even when they have started a family, they do not have the same financial stability needed to properly invest in their families or become key players in the buying and selling market just yet. It’s clear to see that shifting the focus accordingly in both the rental and selling spheres has become an essential part of keeping the real estate industry up with the times. 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)
The Dawn of a Shared Age in Real Estate
“…we may be about to see a shift of generational proportions toward [an]… array of real estate demands, ironically induced – at least partially – by technology. Overcoming isolation is becoming increasingly imperative, as seen in such trends as co-working and co-living.” Emerging Trends in Real Estate: United States and Canada 2020 Collaborative seems to be the keyword in the property market for 2020. While South Africa may not have caught up with the US and Canada in regards to innovative work environments, the change is visible as many South Africans are also relying more and more on freelancing and working from home, while more and more companies outsource assignments which use to be handled in-office. Our property market, however, may have surpassed them already. Over the last decade, the property market that arguably grew the most was that of sectional title properties, such as townhouses and apartments. The popularity of this choice of living arrangement, though, shouldn’t be a surprise at all. Recent years have seen the economic struggles of millennials and even older generations leaving them with little option but to opt for renting instead of investing in their own property. But even for those who can afford it, buying a property in uncertain times feels like too big a risk. When we look at world news, considering the drastic changes in the Russian, English and American political landscapes, for example, it becomes clear that uncertainty for the future is not a “proudly South African” product at all. Over and above the politics, Greta Thunberg’s warnings of environmental threat flood our news feeds whether we want to think about it or not. Simply put, the people who invested in property in previous years, are no longer willing to take the risk. Not on their own, that is. With co-living quickly rising in popularity. Families and friends are sharing yards more often, with garden flats just next to the main house, and often even sharing the house itself. Shared responsibility, shared accountability, and shared safety — this is what drives many homebuyers. Beyond the financial benefits, co-living also increases the sense of community and safety, allowing the residents to focus on the life within their home, instead of the one raging outside. In the work environment, however, SA is sadly still lagging. The workforce is SA is primarily still office-based, relying on a single fixed income from one employer while trying to keep their heads above water. While not everyone’s work allows them to work from a laptop in a coffee shop, the ones who can work remotely are rarely accommodated. This, unfortunately, leads to more office space being taken up, and more office resources being used up than is actually necessary. That said, the market is changing, with home offices expenses now even being tax-deductible. With more professionals choosing to work from environments other than traditional offices, the demand for collaborative workspace and working environments will increase. Working from a home filled with distractions, from TV to chores, simply isn’t ideal. Sitting amidst the smells of coffee and baked goods of a coffee shop, with constant conversation buzzing all day long, is equally disastrous for efficient work. That is why many freelance professionals are searching for workspaces that offer the same conducive environment an office would, without the downside of being constrained by office hours. Environments such as these are, however, rather scarce in SA, meaning there is a lack of supply for something that is quickly growing in demand. The era of collaboration seems to have arrived. 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)
The effects of expropriation without compensation
For many whose homes are where their hearts are, the Draft Expropriation Bill, 2019, which seeks to legalise land expropriation without compensation, is proving to be of great concern, especially after it was released for comment on 21 December 2019. The biggest concern is what effect the expropriation will have on existing property loans — a concern that the Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, confirmed has not been addressed. Didiza stated that the banks were not consulted to discuss what impact a lack of compensation would have on property loans and unpaid debt. The amendment aims to expropriate land without compensation. But when the land that is being expropriated is still being paid off and the title does not yet fully belong to the landowner, the party that is not being compensated will be the bank. But due to a lack of detail, the Bill never states that the loan repayments to the bank will cease, it simply states that the new landowner will not have to pay them. While a landowner cannot logically be expected to pay off land that no longer belongs to them, both Nedbank and SA Home Loans have confirmed that that would be the case. Property loans will have to be paid off as contractually agreed to, even when the land or property no longer belongs to the bond owner. If the bank is not compensated and stops receiving loan repayments, it will be forced to write off billions of Rands’ debt, resulting in utter devastation in the economy. If landowners are forced to pay for land and property that no longer belongs to them, it will undoubtedly result in civil unrest and, once again, devastation in the economy. The problem with the Bill is the fact that it does not state any of this directly. The primary issue is not in what the Bill says, but in what it does not. This is illustrated further in its definition of “land”, or rather it’s lack thereof. The proposed amendment does not confine the term “land” to agricultural land that is unoccupied and not utilised to its fullest potential. As it currently stands, the amendment will include urban and residential land and property, whether occupied or not, meaning every property or bond owner’s land/property may be expropriated while they will still be contractually bound to their loan down-payments. Shockingly enough, Melanie Verwoerd has stated that the primary focus of the policy would, in fact, be urban land even though many have defended the policy, stating this would not be the case. The fact is that whether or not urban reform is the main intention or not, the current wording does make it a possibility. The initial submission of comments ended on 31 January 2020. That period has been extended to 29 February 2020. Now, we wait and see. 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)
Sectional Title Schemes: A Developer’s Obligations
A developer who wishes to establish a sectional title scheme on a piece of land where there is an existing building, has certain statutory obligations should the building be wholly or partially let for residential purposes. This is not applicable to commercial leases. The Sectional Titles Act 95 of 1986, (the Act), as amended, requires the developer to submit a draft sectional plan to the Surveyor-General for approval. However, before the plans can be submitted, the developer has to comply with Section 4(3) of the Act. This section imposes a duty of notification on the developer. Every lessee of the proposed sectional title scheme building has to receive a notice, in writing, by way of a letter delivered either personally or by registered post. This letter has to give notice of a meeting to be held at least 14 days after the delivery or dispatch of the letter, at the building or at a location within a reasonable distance of the building. It should convey the fact that the developer intends to be available to provide such particulars of the relevant scheme as they may reasonably require, and furthermore provide information regarding the lessees’ rights as contemplated in Section 10 of the Act. The developer is also required to provide a certificate of prescribed particulars relating to the scheme with the letter. The particulars are peremptory and briefly-stated, include the following: The name of the scheme. The description and extent of the land upon which the building is situated. The full names and address of the developer. The title deed number of the land. The number and description of units in the scheme. The number of garages and parking places provided for. A land surveyor or engineer’s report in respect of the general physical condition of the building, specifically if there are any defects in the building. A specified estimate of the annual expenditure in respect of the repair, upkeep, control, management and administration of the common property, payment of rates and taxes and other local authority charges, the charges for the supply of electricity, water, sanitation and other services, insurance premiums, all other costs recovered in respect of the common property which are normally recovered from the owners of units. The developer has to confirm that the meeting has been held as provided for unless all the lessees have, in writing, stated that they are aware of their rights and they do not wish to purchase the proposed units which they occupy. Section 10 of the Act essentially provides a lessee with a right of pre-emption, restricting the developer to first offer the occupied unit to the lessee who was entitled to receive the notice letter. Should the developer act to the contrary and offer the lease to another party, that contract will be void. The lessee has 90 days from the receipt of the offer to purchase in which to accept or refuse the offer. Should the offer be refused, the developer may not within a period of 180 days from the refusal by the lessee sell the unit to any other person for a lower price without first offering it to the lessee. The lessee then has 60 days in which to accept or refuse the new offer. During these periods (i.e. from the date of the notification letter and subsequent offers to purchase), the developer may not, subject to the lessee occupying the unit and complying with the conditions of the lease, require the lessee to vacate the premises or increase the rent payable (unless the lease agreement makes provision for such an increase during these periods). The Act provides that a developer, or any person who has performed partially or fully in terms of a void contract, shall have a claim against the other party to the extent of such performances. The developer can, in addition, claim reasonable compensation for the use of the unit and claim compensation for any damages caused by the person thereto. The other party may claim interest on any payment made from date of payment, as well as reasonable compensation for any expenses incurred by him or any improvements subject to conditions and compensation for damages or loss which he would have been entitled to claim from the developer on the grounds of breach of contract, had the contract not been void. Finally, the Act imposes criminal sanctions on a non-compliant developer, imposing either a fine of R2,000.00 or imprisonment not exceeding 12 months or to both. It is clear that the legislature intends to protect and secure a lessee’s rights by imposing an obligation of notice of the proposed development and by granting an obligatory statutory right of pre-emption in favour of the lessee by the developer. The intention to protect a lessee’s common law rights, as found in the maxim “huur gaat voor koop”, is thus clear. 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)
It’s not all fun and games with holiday homes
Finding a holiday home isn’t as simple as choosing your favourite holiday spot and packing your bags. With the festive season around the corner, the urge to buy a holiday home may be rising, but a decision like this demands time and careful consideration. Let it simmer. This is not a holiday – this is an investment. Just like those of us who want to avoid over-crowded beaches and rush-hour-like traffic when travelling, you may want to wait for the off-season. Property prices, as well as both the buyer’s and seller’s expectations, may be affected by the holiday buzz. Be sure to conduct the necessary research. Owning property in an area is different from simply visiting for a week or two during the holidays. Make sure you choose a location suitable for a home, not just a pit-stop. Consider the area’s liveability both in and out of season. Quite often holiday destinations become ghost towns when the holiday season ends. If that is exactly the peace and quiet you want, perfect! If it’s not, you may want to continue your search, because, contrary to their names, holiday homes can’t only be lived in during holidays. Homes need constant maintenance and care. Staying close to your holiday home will allow you to break away for weekends, making sure the home receives the necessary attention. If your holiday home is a bit too far from your current residence, consider renting it out for the periods when you are not there. This will ensure your property is well-maintained as well as offering you an extra income. When choosing to rent out your property it becomes especially important to make sure the area provides the necessary amenities for everyday living. The most important aspect, though, is enjoyment. A holiday home is meant to be enjoyed. Make sure you enjoy yours for the longest possible time by making an informed decision. 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)
The architecture of a braai
Every HOA has applicable building guidelines which are stipulated in a Constitution or Memorandum of Incorporation (“MOI”) which every homeowner should be made aware of, read and understood. The guidelines will differ from estate to estate and it is important for the homeowners to adhere to these provisions. When one wants to erect a building structure on one’s property, written plans have to be lodged with the Homeowners’ Association for consideration. The plans must be within the building guidelines provided for in the Constitution or MOI and based on that, the HOA together with their architect will make a finding. If one erects a structure without these plans, a complaint may be lodged with the municipality and one may receive a notice to obtain written approval for the authorised building work following a summons to appear in court. The notice to be served on a homeowner who has erected any building, excluding a temporary building, is being or has been erected without prior approval from the local authority shall be served with a notice, calling upon him/her to obtain the approval, in writing, as required by The National Building Regulations and Building Standards Act No. 103 of 1977 (“the Act”), by a date specified in such notice. Failure to comply with such a notice may constitute to a criminal offence in terms of Regulation A25(11) of the Act. If the homeowner fails to comply with the notice, the following procedural step will be a Summons in a Criminal Case. The charges may be based on the contravention of S4(1) of the Act, which states that no person shall without prior approval, in writing, of the local authority in question erect any building in respect of which plans and specifications are to be drawn and submitted in terms of such Act. In addition, Section 4(4) of the Act which states that any person erecting any building in contravention of Section 4(1) shall be guilty of an offence and liable on conviction to a fine not exceeding R100 for each day on which he was engaged in erecting such building. Due to the homeowner failing to comply with the notice first served, he/she will then be charged with the contravention of Regulation A25 (10) of the Act as well. In essence, he/she would then be charged with the Count 1, the contravention of Section 4(1) and Section 4(4) of the Act and Count 2, contravention of Regulation A25(10). The penalty awarded to an accused if found guilty will be decided on a case-by-case basis. The Court may consider the nature and the amount of the penalty, the aim of the penalty, which is to compel compliance with the Constitution or the MOI. The Act makes provision for a general penalty clause where any person convicted of an offence under this Act in respect of which a fine or imprisonment is not exceeding R600 or to imprisonment for a period not exceeding 6 months and Section 4(4) of the Act makes provision for a person to be found guilty of an offence and may be found liable on conviction to a fine not exceeding R100 for each day on which he/she was engaged in erecting such building. However, the court may reduce the penalty to such an extent as it deems equitable or reasonable in the circumstances. It is clear from the above that the consequences of erecting a structure on one’s property without approved written building plans could be hefty and is something that can be easily avoided when one exercises a bit of patience. Reference List: The National Building Regulations and Building Standards Act No. 103 pf 1977 (as amended) 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)
Tips for investing in property for retirement
Have you ever wondered if real estate is a sound investment? Well, it certainly can be! There are people out there who have invested in real estate and created a very comfortable lifestyle for themselves. That being said, there are also people out there who have lost everything due to bad real estate investments. When it comes to investing in real estate, especially for retirement purposes, it takes quite a bit of knowledge, skill, intuition and guts. Here are some tips to consider when it comes to investing in property for retirement income: Make sure to increase your real estate knowledge It goes without saying that to be good at anything, you need to know what you are doing. There are many seminars that you can attend that focus on how to invest in real estate. You can also read books on the matter and with the internet, all this information is readily available to you. Make sure to polish your skills There are many ways to invest in real estate. You can purchase a home or piece of land that you can flip, or a home that you can remodel and sell at a higher price. Otherwise, if you are looking to generate an income that can be used for retirement, you can look for income-producing properties such as commercial office spaces, apartments or homes that can be rented out. It’s important to assess your skills before purchasing a property. For example, if you have close ties to the development plans of your area, you could have a knack for spotting pieces of land that will increase in value over time and if you know contractors, you could be able to get remodels done at a discounted price. Make sure to develop your intuition Have you ever heard the real estate saying, “Location, location, location”? Well, this saying is very true. You need to have some intuition as to what areas will become popular over time, and what areas will deteriorate over time. We recommend avoiding buying property in areas that you are not familiar with. Have the guts to take the leap When it comes to investing in property, you need guts because there will be taxes to pay and there will be times where your rental properties are left unoccupied. Just because your rental property is vacant, doesn’t mean that you don’t still have a mortgage, repairs and maintenance costs to pay. That is why it is so important to choose the right property to invest in. Flipping properties will take guts too. Because the property might not sell as quickly as anticipated, that is when you need to have the guts to hang on or the guts to sell the property at a lower price. The takeaway here is that real estate can be an excellent investment and can generate a great source of income while you are enjoying your golden years. However, you must go about it in the right way. If you are planning on using real estate to build a source of retirement income, make sure to be patient and work systematically as you build a portfolio of income-producing properties. Never jump the gun, do your research and make the right decisions, this way you can enter retirement with peace of mind. 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)
Different types of home loans
In today’s economy, homebuyers often struggle to scrape together the money needed in order to buy their dream homes. Therefore, home loans have become so popular among prospective home buyers. New home loan providers noticed this and entered the mortgage lending market in order to satisfy this demand. Prospective home buyers are now spoiled for choice when it comes to choosing a provider to finance their property purchase. But that’s not all. Prospective home buyers can now choose the perfect home loan type that will be suitable for them specifically. There are several home loans available to prospective home buyers in South Africa. We will provide an overview of these types of home loans below: Fixed-rate home loan Fixed-rate home loans have a fixed interest rate for a certain period, which covers one or two years. The fixed rate will always be higher than the base home rate, but you will be protected against increasing rates. This loan helps you to avoid increased interest rates, however, if the interest rates drop, you will still be paying the same fixed rate. First-time buyers home loan First-time buyers home loans are very popular among first-time home buyers who want to invest in their first home but do not have the money at hand to put down on a deposit. Banks and other lenders are now open to lending more than 100% of the purchase price, which includes the registration and transfer costs. Variable home loan Variable home loans have their interest rate attached to the base home loan rate, which goes up and down, depending on the amount of the loan. If the home loan base rate goes down, the interest rate follows, however, it also works the other way round. Capped rate home loan Capped rate home loans provide you with the extra security of a variable interest rate without locking in a fixed rate. These home loans protect you against interest rate increases. However, it should be noted that qualifying for these types of home loans are quite difficult. Step-down home loans Step-down home loans are popular among homeowners who are close to retirement. With this type of loan, the rate offered to you by the bank is gradually lowered every year or 6 months. This saves you a lot of money. This home loan is very similar to switching home loans, as switching your home loans enables you to secure a significantly lower rate. Whichever home loan you choose, rest assured that there is a home loan out there for you that will enable you to make the biggest investment of your life; buying a home. 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 secure is the estate you live in?
Choosing to live in a secured residential estate in South Africa is becoming ever more popular with South Africans. Entering your estate whilst security guards watch out for unknown assailants that may enter, living in your home peacefully knowing that the security guards are ensuring that people may only enter with your permission, giving the home owners a sense of security. But is this a true sense of security or is it false, and if the unfortunate happens that you are robbed or assaulted in your home, who is responsible? The Home Owners’ Association? The security company? A Home Owners’ Association (HOA) is a body/committee comprising of the home owners of a specific estate entrusted with the running of the estate and communal affairs of those that own homes there. On the 28th of August 2018, Judge J Unterhalter of the Gauteng Local Divison High Court handed down judgment in a matter of Van der Bijl and Another vs Featherbrooke Home Owners’ Association and Another. The Van der Bijls, home owners in a secured estate, brought an action against the (HOA) and the security company for failing to secure their safety, as their property was invaded by robbers. On the 8th of April 2014, robbers unlawfully gained access into the estate during the night and then proceeded to enter the Van der Bijls’ home. Mr Van der Bijl suffered a gunshot wound to his abdomen and Mrs Van der Bijl sustained injuries from being assaulted. Due to these injuries, the Van der Bijls claimed damages from the HOA and the security company, alleging that the HOA and security company were wrongful in their duty to care and were negligent as they failed to take measures to ensure their safety. The HOA defended the action and took exception to the Van der Bijls’ cause of action, citing that the HOA did not have a legal duty to take steps to protect the Van der Bijls from the robbery, thus there was no wrongfulness or negligence on their part. The court’s stance is that wrongfulness and negligence are two separate requirements of Aquilian liability. Where wrongfulness concerns the issue as to whether the law imposes liability by recognising a legal duty resting upon the defendant to prevent the harm that the plaintiff suffered, negligence concerns the defendant’s conduct judged against the standard of whether a reasonable person would have foreseen the harm and guarded against it, inter alia, a defendant may be burdened with a legal duty to prevent a harm, but his/her conduct may be blameless because the harm was not reasonably foreseeable. Thus, a defendant may be negligent but not act wrongfully because there was no duty to prevent the harm. The HOA took exception to the plaintiff’s particulars of claim inter alia, it did not have a legal duty to protect the Van der Bijls from the robbery, citing that the Van der Bijls did not make a case for Aqulian liability as there was no wrongfulness. The plaintiff’s counsel relied heavily on the decision of the Loureiro case, wherein the Constitutional Court held that a private security company, who was employed and remunerated for crime preventing, owed a duty to stop avoidable harm. The Constitutional Court went to express the opinion that there would be wholesome deterrent effect if private security firms were not insulated from their own mistakes. Thus, the plaintiff’s counsel submitted that, as in the Loureiro case, the security company employed by the HOA had a duty to protect the residents of the estate including the Van der Bijls and the HOA bears the same duty. But the two cases do not bear the same facts, inter alia, Loureiro did not decide that Mr Loureiro, by hiring a security firm, was under any duty to secure the house, it was the security company that owed the duty to protect Mr Loureiro and his family. So the fact that the HOA employed the security company to provide security for the estate does not simply follow on that the HOA owed the same duty as that assumed by the security company. Such a duty would have to be shown to exist apart from what the security company had undertaken to do. But yes, following the logic of Loureiro, it is the security company that owed a duty to the HOA and the members it represents. Hence the Van der Bijls may have recourse against the security company and they are one of the defendants. Further, it was noted that the robbers/assailants that caused the harm were not sued and which the plaintiff will have a claim against. While the Van der Bijls definitely enjoy fundamental rights to security of the person, bodily, physical and psychological integrity, dignity and privacy, and these rights were infringed by being assaulted in their home, the big question is from whom can these rights be claimed. The answer is, you will have a claim against the assailants, and based on the Loureiro case, the security company, but the Judge failed to see how the HOA, which is an extension of the collective will of the estate home owners, is burdened with the duties to secure these rights. Should the home owners be burdened with these duties, then the question is, does my neighbour have a duty to protect me in my home? He or she may come to your aid and he/she may be described as being valiant to do so but it is not out of duty. Further, there was no contractual obligation, be it in the Memorandum of Agreement or written agreement between the HOA and the home owners, holding the HOA liable for protecting the Van der Bijls. In conclusion, the court found that the plaintiff’s particulars of claim did not set out a cause of action, which follows that the HOA did not have a legal duty to protect the home owners, in particular, the van der Bijls, hence not wrongful. So, the next time you are