Transfer duty – No surprises – Part 2
The Transfer Duty Act 40/1949 (“the Act”) states that transfer duty (duty) is to be levied on any property acquired by any person by way of a transaction. The Act is clear as to whom and by when the duty is to be paid. It states that the duty shall be payable by the person who acquires the property within six months of such acquisition. Should that person fail to pay the duty within the aforesaid period he/she shall be liable to a penalty at a rate of 10% per annum on the amount of the unpaid duty. It must be mentioned that the penalty is calculated for each completed month after the expiry of the six months. It is important to therefore look at the definition of acquisition as set out in the Act. The date of acquisition is the date the transaction was entered into irrespective if the transaction was conditional or not. The date of acceptance by the seller of an Offer to Purchase will constitute the date of acquisition and will be reflected in the transfer duty receipt issued by SARS. It has been argued that should a Deed of Sale be subject to a suspensive condition the contract will only be perfected on the date of fulfilment of the suspensive condition which should then be viewed as the date of acquisition. Considering the definition hereinbefore it is improbable that this argument will be accepted by SARS. A prudent conveyancer would advise the purchaser to pay the transfer duty within the six-month period. How does SARS determine the value on which duty shall be payable? In the event consideration is payable, for example, the purchase price, then duty will be calculated on that consideration. If no consideration is payable, for example, a donation of a property, then transfer duty shall be paid on the declared value of the property. As to the declared value, the Act defines this as the amount declared by the person who is acquiring the property. However, if SARS is of the opinion that the declared value or the consideration payable is less than the fair value of the property, it may determine the fair value of that property. Fair value is defined as the fair market value of the property as of the date of the acquisition of the property. In determining the fair value SARS shall have regard, according to the circumstances of the case, to the municipal valuation of the property and any sworn valuation furnished by the person acquiring the property. In practice when a conveyancer applies for an assessment and SARS wishes to determine whether the consideration or declared value is in line with the fair market value, they request that the municipal valuation and occasionally two independent estate agents’ valuations be provided to them. Transfer duty is then paid on either the fair value or the consideration or the declared value, whichever is the highest. SARS wants its pound of flesh. One should keep in mind that SARS has the right to add certain payments to the consideration payable for the acquisition of the property and assess duty on the combined amount, for example; a) any commission or fees paid by the person acquiring the property, for example, if the purchaser of a property is contractually bound to pay the estate agents commission; b) if the property has been acquired by the exercising of an option to purchase, any consideration paid by the purchaser to the seller in respect of the said option; c) any consideration paid whatsoever in respect of the property other than rent payable by the purchaser. It is therefore inadvisable to state in a contract that the purchaser, over and above the purchase price, is paying an additional amount for certain movables as SARS might view this as part of the consideration and assess duty on the combined amount. A person acquiring a property should therefore be mindful of the above and when in doubt obtain legal advice. 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)
Having ‘skin’ in the property game
Bigger deposits mean a smaller loan and a better interest rate. Rising inflation and several interest rate hikes have many South Africans trying their best to keep their costs down where possible, and this has also translated into their homebuying behaviour. The Q2 ’22 oobarometer statistics, released by ooba, reveal lower-than-expected home price inflation from the last quarter. This has resulted in property becoming more affordable in certain regions (in real terms, i.e. after the effects of inflation are stripped out), enabling homebuyers to put down larger deposits. However, it’s interesting to compare buying behaviour across the various regions, and to identify areas where homebuyers are prioritising deposits. Deposits are a great way to reduce the size of one’s monthly and total home loan repayments, and to negotiate a better interest rate from the banks. While the oobarometer only observed a 0.4% growth in the price of property quarter-on-quarter, the average size of deposits experienced a 16.4% increase. We also observed that in many regions, the average deposit size was significantly higher than the national average of 7.8%. In the Western Cape, which is currently the region experiencing the most homebuying activity, the average deposit size is a whopping 17%. This could be attributed to increased semigration and the scarcity of property supply in the region, resulting in homebuyers needing to put down a larger deposit to secure their dream home. Tips for saving for a deposit With the largest deposit amounts in various provinces, including the Western Cape, Limpopo/Polokwane, Eastern Cape, KZN, and Gauteng North/East Rand exceeding the generally recommended 10% deposit, it’s clear that consumers are making smart choices and prioritising long-term savings over short-term gains. The benefits of putting down a larger deposit are primarily financial, but they also indicate to both the seller and the banks that the buyer is serious about their purchase. This results in a higher chance of approval, and more favourable interest rates. While putting aside money for a deposit may be a daunting prospect in these challenging economic times, here are some budgeting tips to make saving up easier: Set a goal. Start by receiving a pre-approval to determine what size bond you will qualify for. Set a realistic savings goal of 10% of that total amount, considering your timeline for buying a home. This will give you an indication of how much you will need to put aside each month to reach your goal by your preferred deadline. Draw up a monthly budget. This involves tracking your monthly expenditure and cutting down on unnecessary impulse purchases. Go through your bank statement to determine where you can cut back this may be in the form of a debit order that’s no longer needed, or by reducing your daily coffee stops. Get rid of credit card debt. The inflation on your credit card debt is eating away at your savings. Avoid making purchases that you can’t afford to pay back immediately, and speak to your bank about lowering your overdraft limit. Put your savings in a separate account. This way you don’t risk tapping into your savings, as this account should be strictly off-limits. Make sure that the account is interest-bearing, to increase your savings efforts. Finally, once you have successfully saved up for a deposit, make sure that your hard work doesn’t go to waste by ensuring that it is protected from cybersecurity threats. Third-party options, like Buyers Trust, offer you security, full transparency, free bank guarantees, and a high return on your investment as a result of it being stored in a maximum interest-bearing account. WRITTEN BY JACKIE SMITH Jackie Smith is the head of Buyers Trust (a subsidiary of ooba Group). 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 rei vindicatio and the actio ad exhibendum
The are a myriad of circumstances where one might be deprived of possession of one’s property. You might, for example, have given permission to your friend to use your vehicle for one year, which your friend then refuses to return the vehicle after the friendship has turned sour a year later. South Africa is a constitutional democracy that is based on the rule of law, and you can not simply take back your vehicle with force in the absence of a court order as this would amount to taking the law into your own hands. Your friend, who has had undisturbed possession of your vehicle for a year, will in such circumstances be entitled to launch, and probably succeed with, a spoliation application against you. An aggrieved owner who has been dispossessed of his or her property, will have to institute the rei vindicatio action in order to have his or her property returned lawfully. Such an aggrieved owner must allege and prove the following in order to succeed with this action: That he or she is the owner of the property; and That the defendant was in possession of the property at the time of institution of the rei vindication action. Amler’s Precedents of Pleadings state that it is not necessary for the plaintiff to allege or prove that the possession of an owner’s property by another is wrongful as it is regarded as being prima facie wrongful. There are various defences that a party faced with a rei vindicatio action can rely on. The two most obvious defences are, firstly, a denial of the plaintiff’s ownership and, secondly, a denial of possession of the property of which the return is being claimed. These two defences do not draw an onus as the plaintiff is the one who must allege and prove these elements in order to succeed with the claim. A defendant can also allege that the property in question was already returned to the plaintiff. The defendant will have the onus of proving this defence. Another defence that draws an onus in that the defendant must allege and prove it if the defendant wishes to rely on a right to possession (i.e., claim that he or she, although not the owner, is in lawful possession of the property). The bona fide disposal of possession is a complete defence, which can be raised by a defendant. However, if the defendant knew of the plaintiff’s claim to the property, then the disposal will be deemed not to have been bona fide, but in fact wrongful. The plaintiff will then be entitled to rely on the actio ad exhibendum in order to claim damages calculated on the basis of the value of the property at the date of disposal. The plaintiff must allege and prove four essential elements in order to succeed with his or her alternative claim in terms of the actio ad exhibendum. The plaintiff must firstly allege and prove that he or she is or was the owner of the property at the time when it was alienated by the defendant and, secondly, that the property was in the defendant’s possession. The plaintiff must thirdly allege and prove that the defendant had knowledge of the plaintiff’s ownership of the property at the time that he or she lost possession thereof. It must be noted here that a defendant who loses possession of the property subject to a rei vindicatio action after such action has been instituted is regarded as being mala fide as he or she would have received proper notice of the plaintiff’s claim. The plaintiff must lastly also allege and prove that the defendant intentionally or negligently disposed of the property or caused its destruction. It is clear from the above discussion that the fictional vehicle owner referred to above will not be allowed to simply attend to the former friend’s house and take the vehicle back with force. You will have to approach the court for relief and the sheriff will have to go fetch the vehicle once the court has granted an order in your favour. It is furthermore advisable to claim damages in the alternative should your former friend have severely damaged the vehicle or unlawfully sold it to an innocent third party. Reference List: Amler’s Precedents of Pleadings 5th edition 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)
Landlord and tenant inspections
The Rental Housing Amendment Act[1], section 4B (4) and (5) determines that the tenant and property owner must jointly, before the tenant moves into the dwelling, inspect the dwelling for any defect and damage. It further determines that the same procedure must be followed when the tenant vacates the property, and this inspection must be done at least three days before the tenant exits the property to ensure that any damage that was caused can be attributed to the tenant while still in possession of the property. Failure by the property owner to inspect the property in the presence of the tenant will be deemed to mean that the property owner acknowledges that there is no damage to the property to be noted and that everything is in order. The same situation in reverse is also applicable. If the tenant fails to respond to the property owner’s requests for inspection, the property owner must do an inspection within 7 (seven) days after the tenant vacated the property for the damage to be validly attributed to the tenant. In the first instance, the property owner must refund the full deposit, plus interest, to the tenant. In the second instance, the property owner may deduct from the tenant’s deposit any reasonable cost for repairs. The balance of the deposit must be refunded to the tenant. It is clear from the abovementioned Act that the property owner has a responsibility to do an entry and exit inspection, and it can have financial consequences for him if it is not done accordingly. The next question that the client wanted clarity on was whether the rental agency can be held liable for the damage if inspections were not done by the rental agent before handing over the keys of the dwelling to the tenant. The recently promulgated Property Practitioners Act[2] (“PPA”) refers to a Mandatory Disclosure Form. Section 67 directs that a property practitioner (which includes a rental agency) must not accept a mandate unless the property owner has provided the practitioner with a fully completed and signed Mandatory Disclosure Form in the prescribed format. The property practitioner must provide a copy thereof to the prospective tenant and it must be annexed to the lease agreement. If it is not included in the lease agreement, there is deemed to be no defects to the property. In section 67(3), the property practitioner may be held liable by an affected consumer if there are latent defects. The rental agency does not have to do the inspection themselves, as it still remains the responsibility of the property owner. If the agency was instructed to do the inspection on behalf of the property owner and failed to do it, the property owner may hold the rental agency liable for damages, but liability will have to be determined by legal process. Important to note is that the PPA also allows for the prospective tenant to undertake for his/her own account an inspection to ascertain the state of the property before entering into an agreement. This might be a useful undertaking by prospective tenants where the rental agency fails to comply with the above rules. [1] Act 35 of 2014 [2] Act 22 of 2019 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 you should know about the new Property Practitioners Act
The long-awaited Property Practitioners Act finally came into effect this year and brings with it significant changes to the real estate industry. The Act takes a more consumer-focused approach and is premised on the need for transformation in the property sector. Property practitioners The Act has widened its scope of application by consolidating all role players in the real estate industry under the same Act. The concept of a property practitioner is therefore not confined to real estate agents only but includes property developers, property managers and bridging financiers among others. The limitation on the relationship between property practitioners and other real estate service providers As aforementioned, the Act takes a more consumer-focused approach and is primarily aimed at protecting the consumer. This is evident in section 58 of the Act, which states, inter alia, that a property practitioner may not enter into an agreement that obligates or encourages a consumer to use a particular real estate service provider, including an attorney, to render a service in respect of a transaction of which that property practitioner was the effective cause. The Act then further provides that any person who renders services in contravention of this section is not entitled to remuneration. All property practitioners must be in possession of a Fidelity Fund Certificate In addition to the above, the Act also makes it mandatory for all property practitioners to be holders of a Fidelity Fund Certificate issued by the newly established Property Practitioners Regulatory Authority. Furthermore, the practitioner must also be in possession of a Tax Clearance Certificate, as well as a BEE certificate. In terms of section 56 of the Act, a practitioner shall not be entitled to remuneration or payment if at the time of the performance of their duties the practitioner was not in possession of a Fidelity Fund Certificate. The Act makes it mandatory for a conveyancer to first request this certificate from the property practitioner before making any payment to the practitioner. This provision will ensure that sellers and buyers deal with properly qualified practitioners. Mandatory disclosure of defects Lastly, one of the most significant changes that the Act brings forth is the obligation of sellers to now disclose any defects on the property that they are aware of. The Act compels sellers to make a written disclosure to potential buyers of all the defects on the property. The written disclosure must be signed by all parties and must be attached to the offer to purchase. In terms of section 67 of the Act, the property practitioner cannot accept a mandate if this written disclosure is not produced. Conclusion In light of the aforementioned, it is clear that the new Act primarily aims to protect the interests of the consumer. Consumers should therefore make use of the protection afforded to them in terms of the Act and before signing any offer to purchase, make sure that there is a written disclosure by the seller setting out all the defects on the property. They should also ensure that the property practitioner is in possession of a Fidelity Fund Certificate that has been issued by the Property Practitioners Regulatory Authority before mandating the practitioner to render his or her services. Reference list: The Property Practitioners Act 22 of 2019 The Property Practitioners Act and its impact on the property sector (Lethabo Mashishi) 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)
Selling a property with defects: What you need to know
The Purchaser signs an agreement of sale with the Seller. The property is transferred into the Purchaser’s name. A month later, there were heavy rainfalls and the roof leaks. Is the Seller liable to repair the roof or the Purchaser, as the new owner? To understand which party is liable, one must appreciate the difference between latent and patent defects. A latent defect is not visible or can be discovered when inspecting the property. This type of defect impairs the use and enjoyment of the property. Typical examples of latent defects are leaking roofs, dampness and/or structural defects in the foundation, to name but a few. On the other hand, a patent defect is visible when inspecting the property. Hence, the parties can discuss the options of who will attend to the repairs. The same may be negotiated between the parties, be it the Seller who repairs the patent defect or reduces the purchase price for the Purchaser to repair. Thus, it is the latent defect matter that triggers the dispute between the parties should it arise. The common law position is as follows: If the Seller gives the purchaser an express written warranty that the property is sold free from any defects, and after the sale is concluded, the purchaser confirms that there is a defect, the Seller can be held liable for the repairs. For example, if the Seller declared in the agreement of sale that the roof does not leak and after the sale the Purchaser experiences leaks in the roof, the Seller is held liable as there has been a breach of contract. If the Seller misrepresents to the Purchaser regarding the property’s condition, the Seller can be held liable. For example, if the Seller is aware that the roof leaks and does not declare the same to the Purchaser, the Seller can be held liable, and the sale can be set aside, or the Purchaser may proceed with the sale and claim a reduction in the price for the damages. One may ask, but what if the Seller did not know about the latent defect? The answer is yes, the Seller can be held liable if the latent defect existed when the sale was concluded between the parties. But why is there a voetstoots clause in the sale agreement, which is supposed to protect the Seller by informing the Purchaser that he/she/they are purchasing the property as-is (voetstoots)? The voetstoots clause does not protect the Seller and does not exclude the Seller’s liability if the misrepresentation is proven; hence if the Seller was aware of the latent defect and did not disclose same to the Purchaser, the Seller can be held liable. The Consumer Protection Act, which came into effect on the 1st of April 2011, states the Purchaser has to be informed of all details regarding the property that he/she/they are purchasing. Once the Seller expressly states what condition the property is in and the Purchaser expressly accepts the current state of condition of the property before purchasing the property, the implied warranty of the property’s condition falls away. The effect of the CPA has been that the voetstoots clause does little to protect the Seller when it is tomes to defects; hence the Seller is urged to declare all defects of the property to the Purchaser before concluding a sale agreement. Reference List: PRACTITIONERS GUIDE CONVEYANCING & NOTARIAL PRACTICE BY ALLEN WEST CONSUMER PROTECTION ACT 68 OF 2008 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)
Fighting like cats and dogs over pets in flats?
If you own a pet and live in a complex subject to the Sectional Title Schemes Management Act, this article may be just for you. What if the body corporate does not allow you to own a pet? Or what if your guide dog or emotional support pet is not welcome in or around the place you live? Here is what you need to know. If you love your pet, one of the first things to consider when renting a flat or buying a property that is part of a sectional title scheme, is whether it is pet-friendly. The focus of this article will be on the rules of the body corporate of sectional title schemes relating to pets. It is advisable that before you buy a property forming part of a sectional title scheme, to familiarise yourself with the rules of the body corporate and ascertain whether your pet is welcome in the complex. In most instances, pets are allowed, but on certain conditions, such as obtaining written consent from the body corporate and having control over your pet to avoid it becoming a nuisance to your neighbours. Depending on the body corporate, consent may be based on the type and size of the animal. It would only be fair and in the public interest that you are not allowed to bring your pet crocodile to the park where children are playing or keep it in your apartment. Not only would it be a nuisance, but it is also extremely dangerous. The same principle applies to dangerous dog breeds and other animals that are not suited for a domestic environment and/or residential areas. Generally, body corporates will be specific about which animals are allowed, providing a list of acceptable dog breeds and other animals. Body corporates will normally allow cats, small to medium-sized dogs, and other small pets with their written consent. Such written consent should, however, not be unreasonably withheld. In the matter of Body Corporate of Laguna Ridge Scheme N.O. 152/1987 v Dorset 1999 (2) SA 512 (D), the court emphasised that the trustees of body corporates must consider the individual circumstances of each application when determining whether to allow pet ownership. In this matter, the body corporate denied consent to having pets in the complex as a general policy, as opposed to considering each request on its own merits. The court granted the applicant, who was the owner of a small Yorkshire Terrier dog breed not causing a nuisance, permission to keep the pet, subject to certain conditions. The Conduct Rules prescribed in terms of section 10(2)(b) of the Sectional Titles Schemes Management Act 8 of 2011, as it appears in the Annexure 2 of the Sectional Titles Management Regulations, provides the following: Owners may apply to keep a pet with the written consent of the trustees. Such consent must not be reasonably withheld. Owners suffering from a disability and who reasonably requires a guide, hearing, or assistance animal, must be considered to have the trustees’ consent to keep the animal in the section and accompany the animal on the common property. The trustees may provide for any reasonable conditions relating to the keeping of the animal in a section or on common property. Consent may be withdrawn if any of the conditions are not adhered to. Only an animal prescribed by a medical practitioner, for example, a guide dog for a blind person, or an emotional support pet prescribed by a mental health care professional, are automatically deemed to have consent. The person who has obtained this automatic consent may still be subject to certain reasonable conditions, as determined by the trustees. The Community Schemes Ombud Service (CSOS) is established to assist people with disputes relating to properties subject to the Sectional Titles Scheme Management Act 8 of 2011. The decisions of the Ombud are equivalent to that of a High Court and are enforceable as such. 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 neighbours interfere in building plans?
Disputes between neighbours tend to ensue where an owner decides to build on or renovate their property and the neighbouring owner believes that such building works will have a detrimental effect on their property rights. Neighbours who are disgruntled by the noise nuisance, possible obstruction of an existing view from their property, or the aesthetic features of the building works, may feel it necessary to object to the building works. The question that must accordingly be posed is, do neighbours have a legal right to object to building works? And if not, what other remedies are available? The National Building Regulations and Building Standards Act (“NBA”) provides for the promotion of uniformity in the law relating to the erection of buildings in the areas of jurisdiction of local authorities. The NBA does not create a legal requirement for an owner to inform their neighbour(s) of a building plan application. In terms of the NBA, neighbours also do not have the right to object to building plans. In Walele v City of Cape Town and Others, the Constitutional Court confirmed that neighbours do not have a general right to be informed of or have access to building plans or to object against them prior to approval. However, the Constitutional Court further held that the rights of neighbours are adequately protected by the duty placed upon the local authority to consider the rights of neighbouring landowners in term section 7 of the NBA. It is important to note that there might exist a legal requirement for an owner to inform their neighbour(s) of a building plan application in terms of the by-laws of a specific local authority. There are also certain exceptions to the general rule confirmed in the Walele case. Neighbours must be notified of building plans in the following instances: Where the application for the approval of building plans is made at the same time as an application for rezoning of the said property; or Where an application is made for the removal of a restrictive condition or covenant, for example, an application for the relaxation of a building line. The local authority may also, in its discretion, invite neighbours to object to the building plans. If an objection is submitted, it will not necessarily prevent the building plans from being approved. The local authority shall consider the objection and exercise its discretion whilst also considering the rights of the neighbours in terms of Section 7 of the NBA. If the applying owner did not follow the correct procedural steps, aggrieved neighbours may have recourse in terms of the Promotion of Administrative Justice Act 3 of 200 (“PAJA”). An aggrieved neighbour could potentially have the decision of the local authority to accept the building plans reviewed if such neighbour has a right or legitimate expectation that was detrimentally affected by the decision. A legitimate expectation could, however, according to established legal principles, only arise from express representations or practices. An aggrieved neighbour would have to exhaust all available internal remedies, if available, before instituting review proceedings under PAJA. Should you be aggrieved by a neighbour’s building plans or works, it is advisable to consult with the local authority and your attorney to discuss the reasons for your objections and the possibility of lodging an objection in the prescribed form. Sources: Badenhorst PJ, Pienaar JM & Mostert H Silberberg and Schoeman’s The Law of Property 5 ed (2006) Durban: Butterworths. The National Building Regulations and Building Standards Act. Van der Walt AJ The Law of Neighbours 2010 Cape Town: Juta. Walele v City of Cape Town and Others 2008 (6) SA 129 (CC). 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)
Are estate agents ready for the change to come?
Property Practitioners who now need to hold a Fidelity Fund Certificate, unless excluded, to practice in terms of the Property Practitioners Act, 22 of 2019, may have certain questions regarding the application process to obtain the Certificate, its issuing from the Authority and any disqualifications from issuing, its amendment, withdrawal, and lapse thereof. A Property Practitioner needs to apply for a Fidelity Fund certificate every three years to the Authority within the prescribed period and accompanied with the prescribed fee. The ‘Authority’ relates to the Property Practitioners Regulatory Authority, established in section 5 of the Property Practitioners Act, 22 of 2019 (hereafter the “Act”) and a juristic person accountable to the Minister. When the Authority receives the application together with the prescribed fees, the Authority will issue the Fidelity Fund Certificate if the Property Practitioner meets all the requirements as specified by the Act or is not disqualified from being issued a Fidelity Fund Certificate. The Certificate will be issued in the prescribed form and valid until the 31st of December of each year. Some of the parties who are disqualified from receiving issued Fidelity Fund Certificates are the following: Any person who is not a South African citizen and does not reside within the Republic. Any person who has been found guilty of the Property Practitioners Act, the repealed Estate Agency Affairs Act, or any legislation similar within five years at any time. Any person who is of unsound mind. Any person who has been dismissed from a position of trust at any time preceding five years. When holding a Fidelity Fund Certificate, there could be times when the Authority may need to amend it. In writing, the Authority may inform the holder of the Fidelity Fund Certificate of its intention to amend the Certificate or any part thereof. The proposed amendment needs to be accompanied by reasons from the Authority, and the holder of the Certificate may respond to the proposed amendment(s) within a prescribed period. When an amended Fidelity Fund Certificate is issued to the Property Practitioner, the Authority needs to accompany the amended Certificate any reasons for the amendment; supply any replies to the holder of the Certificate’s responses, and request the return of the original Fidelity Fund Certificate immediately. The date on which the Authority serves the amended Fidelity Fund Certificate on the Property Practitioner is the date which it comes into operation. If the Property Practitioner delays or prevents the Authority in any way to deliver or serve the amended Fidelity Fund Certificate, the amended Certificate will come into operation on the date which the Authority attempted to serve the Certificate on the Property Practitioner. Any holder of a Certificate in terms of the Act is mandated to display the Fidelity Fund Certificate at all times; it is prominently featured in the place of business where property transactions are conducted so that consumers can inspect it without effort. Holders of the Certificate also need to ensure that any communication through marketing material and letterheads must be clear and legible. Lastly, a holder of the Certificate needs to ensure that the necessary clause is inserted in all relevant documents, ensuring that the Certificate is valid. Any relevant person who contravenes the above-mentioned rules will be guilty of an offence as per section 52(2) of the Act. Holders of the Certificate should note that it can be withdrawn or lapse in certain circumstances. In terms of withdrawal of the Certificate, if the Authority is instructed by a court of law or any adjudicator, or by its initiative decide to withdraw a Fidelity Fund Certificate – it is allowed to do so in terms of certain provisions laid out in section 52(1) of the Act. Section 52(4) of the Act stipulates circumstances when the Certificate will lapse, such as the date of death of the certificate holder. When the Fidelity Fund Certificate is withdrawn or lapses in terms of section 52, the person who has the Certificate in their possession needs to return the Certificate to the Authority. If it is not possible, the relevant person will need to make a declaration under oath to state why the Certificate will not be returned. Reference: Property Practitioners Act, 22 of 2019. 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)
Take your homeowner relationship to the next level
Despite the recent interest rate increase, South Africa is still currently in what is deemed a “buyer’s market”, where first-time homebuyers are enjoying the opportunity of entering the property market at a much earlier stage than their financial situations would have allowed in previous years. But it’s precisely the fact that so many homebuyers are entering high-stakes financial decision-making for the first time that requires a crash course in basic questions that will help you make the most of the opportunity. Because just like falling in love, buying your first property can easily leave you seeing the world through rose-coloured glasses. So, before you take things to the next level with your dream home, take a second (or few good hard moments, hours, days – however long it takes you) to ask yourself the following questions. 1.Is it young love or have you found the real thing? Aaaah, falling in love. We all remember those first few weeks of utter hormonal bliss and being absolutely mesmerised by our high school crushes, don’t we? Well, it’s the same with a property. Falling in love is easy. That first tour through the property often makes everything look perfect, as if you stepped into the home you’ve been daydreaming of. But just wait till the second tour. That’s where you pick up on the irritating character traits and shortcomings you somehow missed while in your infatuated state. This is where you find out if it’s true love. So, take that second tour of the property, and see if it wouldn’t be better for you to continue seeing other people. 2.Are you (and your income) ready to take things to the next level? Going on a few dates, buying flowers and gifts here and there – dating usually isn’t a great financial burden. Once another person becomes a constant factor in your budget, however, the effect isn’t quite as inconsequential. So, get out your calculator and start number crunching. Owning a property comes with more costs than bond repayments. Agent fees, legal fees, transfer fees, monthly rates and taxes, general upkeep and maintenance — these are just a few of the major costs you need to keep in mind, on top of your monthly bond repayment, when finding room in your budget for homeownership. This step may very well require you to call in the cavalry and get professional advice on the additional costs and whether your current financial situation can accommodate them. 3.What are you looking for in the perfect home? Being on the dating market is the most terrible place to be, especially when you’re wondering whether every person you meet is “the one”. When your only criteria in the property market is simply for the home to be on the market, finding the perfect match is going to be a nightmare. The only way to find your one true home, is to look for the specific characteristics. It’s important to go beyond “two bedrooms with a yard”. Do the rooms get sunlight for your painting hobby? Is there enough space for that second bookshelf or your yoga corner? Is there enough shade for summer picnics? Will your vegetable garden get enough sunlight and shade? It’s important to remember that buying a home is a long-term relationship, and the property has to accommodate your life. 4.Why have you, my dear abandoned home, been on the market so, so long? There is nothing wrong with finding love later in life. However, when talking about a for-sale property, the question has to be asked: Why is no one interested? It’s not like it has been focusing on its career. Luckily, with a property that has been on the market for an extended period of time, you don’t have to rely on Facebook stalking to find the untold story. With the assistance of home inspection services, buyers can truly get to know the prospective property, inside and out, before the Offer to Purchase is drafted. This will allow you to decern whether the property has been on the market due to flaws and damages or whether the home has been waiting just for you. Where the seller is aware of any flaws, a disclosure form is attached to the Offer to Purchase, indicating the flaws and how they affect the value of the property. But even when a property is not sold voetstoots (as is, with all its defects detailed in the Offer to Purchase), it can still be difficult to be recompensed for damage claims once the sale is finalised and you’ve settled into your new home. So, do your due diligence and go over any prospective properties with a fine comb. 5.Going steady or still seeing other people? As with any relationship, you need to know if things are serious. When you’re head over heels about a property, it’s a good idea to find out if others have made offers before you. This will indicate to you how quickly you need to make your own offer. If you’re facing off with other interested buyers, you simply cannot delay in getting your Casanova going and making your own offer. However, if the property has been waiting just for you, you may have more room to negotiate the terms of sale. Now we aren’t relationship experts, but we are property experts. And we look forward to hearing from you and helping you take things to the next level in your real estate journey. 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)