NEWS – DALY MORRIS FULLER

Daly Morris Fuller Attorneys Conveyancers & Notaries

NEWS

50/50 Parent Sharing – A growing trend in SA’s courts
Consent as a requirement in customary marriages
Reduce Your Bond Repayment Period and Save BIG on interest costs
What is a summons and what to do if you receive a summons?
Basic Conditions of Employment Act
Divorce – Seek Legal Advice rather than Going it Alone
What type of cases are heard by South Africa’s different Courts
Vicarious Liability
Who has Capacity to Enter into a Contract?
Be Extra Vigilant!
What is entailed in opening/registering a Company?
Homeowner in Community Scheme?
Top 10 Tips when buying or selling a home.
What is FICA and why we need it?
Is it necessary to draw up a shareholders agreement?
Purchasing a Unit in a Sectional Scheme
Bridging finance
Ante nuptial Contracts
Important points to remember when signing an offer/mandate from a deceased estate.
Section 35A of the Income Tax Act and its effect on property transactions in South Africa.
How do I get a judgement rescinded.
Payment of special levies on transfer.
There’s more to electronic signatures than meets the eye!
Selling your vehicle privately? We can help
How To Report A Deceased Estate
A living Will?
Debt Collection – Leave it to DMF
When Your Neighbour’s Tree Becomes a Nuisance
Cyberbullying in SA – The New Legislation
Conversion of Share Block Company to Sectional Title
Is my customary marriage valid and recognised in South Africa?
Consequences of a Hindu/Muslim Marriage
My partner isn’t paying maintenance, what do I do?.
Buying an Existing Business.
Protecting Intellectual Property.
How to calculate Accrual in Matrimonial Property
Lost your Title Deed?
Why and when you need a power of attorney.
How Do Companies Navigate the Cybercrimes & POPI Acts.
Who gets custody of the children?
Online vigilantes beware! ‘Doxing’ can get you in hot water.
9 Points to remember when buying a home.
Be extra vigilant.
Drowning in debt?
Looking to subdivide your agricultural land?
Marriage contracts – Know what you are getting into.
Treat your will as a letter to your loved ones!
Shining the spotlight on domestic workers.
Tying the knot? Consult your DMF attorney to draft your ante-nuptial contract.
Top 10 Tips when buying or selling a home.
What is FICA and why we need it?
Is it necessary to draw up a shareholders agreement?
Purchasing a Unit in a Sectional Scheme
Bridging finance
Ante nuptial Contracts
Important points to remember when signing an offer/mandate from a deceased estate.
Section 35A of the Income Tax Act and its effect on property transactions in South Africa.
How do I get a judgement rescinded.
Payment of special levies on transfer.
There’s more to electronic signatures than meets the eye!
Selling your vehicle privately? We can help
How To Report A Deceased Estate
A living Will?
Debt Collection – Leave it to DMF
When Your Neighbour’s Tree Becomes a Nuisance
Cyberbullying in SA – The New Legislation
Conversion of Share Block Company to Sectional Title
Is my customary marriage valid and recognised in South Africa?
Consequences of a Hindu/Muslim Marriage
My partner isn’t paying maintenance, what do I do?.
Buying an Existing Business.
Protecting Intellectual Property.
How to calculate Accrual in Matrimonial Property
Lost your Title Deed?
Why and when you need a power of attorney.
How Do Companies Navigate the Cybercrimes & POPI Acts.
Who gets custody of the children?
Online vigilantes beware! ‘Doxing’ can get you in hot water.
9 Points to remember when buying a home.
Be extra vigilant.
Drowning in debt?
Looking to subdivide your agricultural land?
Marriage contracts – Know what you are getting into.
Treat your will as a letter to your loved ones!
Shining the spotlight on domestic workers.
Tying the knot? Consult your DMF attorney to draft your ante-nuptial contract.

50/50 Parent Sharing – A growing trend in SA’s courts

Reaching agreement over who takes care of the children is often a huge source of friction between parents negotiating a divorce and has a profound effect on the children. There is a growing move in favour of 50/50 parent sharing among South African courts in order to serve the best interests of the children.

In a 50/50 parent sharing agreement, both parents have equal responsibility and opportunity to maintain a meaningful relationship with the children, which promotes the childrens’ emotional and psychological needs.

A 50/50 parent sharing agreement requires respect for both parents’ rights. Parents are encouraged to co-operate and work together regarding decisions about the childrens’ upbringing and to support their need for a healthy and safe home environment.

Both parents have a responsibility to meet the childrens’ physical, nutritional, educational and other needs, including the need for supervision when they are in their care.

Consent as a requirement in customary marriages.

The legal position on the validity of customary marriages in South Africa is outlined in the Recognition of Customary Marriages Act (RCMA) of 1998. Section 3(1) of the RCMA sets out the requirements for a valid customary marriage, including that both prospective spouses must be above the age of 18 and must consent to the marriage under customary law. Additionally, the marriage must be negotiated, entered into, or celebrated according to customary law. It is also necessary for the marriage to be registered in accordance with Section 4 of the RCMA.

Reduce Your Bond Repayment Period and Save BIG on interest costs

Did you know?
If you paid off your 20-year bond of R1,5 million in 15 years, you would save over R650 000 in interest costs at the current prime lending rate of 11.75%?

The best thing you can do with an unexpected windfall, a bonus or an annual increase if you are still able to come out on your budget, is to put it into your bond. Once your bond is fully paid, you can put the money you would have been paying into your bond into other investments to enhance your financial future.

What is a summons and what to do if you receive a summons?

A summons is a document drafted by an attorney and issued by a court, which begins the process for civil litigation claims. There are a different kinds of summonses the most common being a combined summons.

What is included in a summons?
A summons is usually a combination of two documents: the first is the summons itself and the second includes the particulars of the claim, where facts are set out and the relief being sought is identified. The names of the complainant or plaintiff (the person who is making the complaint) and the defendant or defendants (the person or group against whom the case is made) will appear on the document, together with the case number and the name of the court from which it was issued.

The summons will explain that the defendant must indicate within a specified time period – usually 10 business days from when the summons was served – if they will defend the case. If the defendant / defendants do not enter an appearance to defend within this period, the plaintiff can apply for default judgement. This means that the relief sought may be granted without you providing any defence.

How is a summons served?
The Sheriff of the Court will serve the summons on the defendant or to a person who is older than 16, or at the premises where the defendant works or lives, or by way of affixing to a door, gate at the address given on the summons etc.

Can you ignore a summons?
Although it might be tempting, ignoring a lawsuit will not make it go away and could result in the court awarding a money judgement against you by default. It is, therefore, essential that you instruct your attorney to formally notify the court and the plaintiff’s attorneys within the specified time period, that the matter will be defended on your behalf. The defendant will then have 5 days to serve and file it’s plea.

Basic Conditions of Employment Act

Know your Rights and Obligations
An important piece of legislation is the Basic Conditions of Employment Act 75 of 1997 which sets out the minimum employment standards for employers and their employees.
Before you enter into a contract it’s useful to know the following:
Working Hours

A worker may not be made to:

Work more than 45 hours a week;
Work more than nine hours per day for a five-day work week;
Work more than eight hours a day for a six-day work week.

Overtime
A worker may not work more than three hours of overtime per day or 10 hours per week.
Overtime must be paid at 1.5 times the employee’s normal wage or the employee may agree to receive paid time off.
Allowance must be made for a 12-hour rest period every day and a 36-hour rest period every week, which, unless otherwise specified, must include Sunday.
If an employee works on a Sunday or public holiday, the employee must be paid double their normal wage.

Meal Breaks
A worker must be permitted to have a one-hour break for a meal after not more than five hours’ work. If required to work during this period, the employee must be remunerated.

Leave
Annual leave allows up to 21 continuous days.
Sick Leave
During every sick leave cycle of 36 months an employee is entitled to an amount of paid sick leave equal to the number of days the employee would normally work during a period of six weeks. Thus, if an employee works a 5-day week, they will be entitled to 30 days within the 36-month period.
Maternity Leave

An employee is also entitled to four consecutive months of paid maternity leave.
Family Responsibility Leave
Workers who have worked for more than four months and at least four days a week are eligible to take three days of paid family responsibility leave at the beginning of each leave cycle if their child is born, becomes ill, or if their spouse, life partner, parent, adoptive parent, grandparent, child, adopted child, grandchild, or sibling becomes ill.

Should you need advice, contact one of our labour law experts.

Divorce – Seek Legal Advice rather than Going it Alone

At a time when you are under pressure and facing uncertainty, it’s best to seek impartial advice from a legal expert.
At DMF, your attorney will help you to understand the legal jargon and ensure you know your rights, responsibilities and what you are entitled to, guiding you through the divorce process and advising you of your options.
Our aim is to help resolve disputes quickly, negotiate a fair settlement and where children are involved, to reach an agreement that is in their best interests, as delays have an adverse impact on the family’s well-being.
Even if you are planning on a do-it-yourself divorce to save costs, it’s worth having a once-off meeting to make sure you are covering all bases and that nothing has been overlooked before entering into negotiations.
To avoid regrets, take this important step towards clarity now.

What type of cases are heard by South Africa’s different Courts

Not many people are aware of the monetary jurisdiction of our courts. Whilst a court’s jurisdiction is calculated using various factors, if it’s a monetary matter, one way to establish which court will hear the case is by looking at the value of your claim. Knowing which court will hear your matter will prevent any delays in legal proceedings.

The types of civil matters that the Magistrates’ courts have the jurisdiction to hear are set out in the Magistrates Courts Act (32 of 1944 as amended).

With effect from 27 March 2014:

District courts hear matters with a claim up to the value of R200 000; and

Regional courts hear civil matters with a claim above R200 000 up to and including R400 000.

The Minister may change these amounts at any time by notice in the Government Gazette.

If there is no monetary claim in a matter, jurisdiction cannot then be calculated by value.

In terms of criminal matters, less serious cases are tried in District courts.

Treason cases are heard by the High Court.

Vicarious Liability

When an employer can be held liable for the actions of their employee.

The issue of vicarious liability crops up fairly frequently in the legal profession.
Regulated by South African common law and case law, the general rule of vicarious liability is that an employer can be held liable for the actions of their employees within the scope of their employment.

For example, when an employee causes a motor vehicle accident whilst delivering documents for their company, the injured party who experienced any loss, can claim from the employer on the basis of vicarious liability.

The employer is not liable on the basis of fault, but on the grounds that they are responsible for the actions of their employees within the scope of their employment.

However, if the employer is found liable, they can claim contribution from the employee thereafter, since the employee was the cause of the incident in question.

If you are ever involved in a matter regarding vicarious liability, legal advice is always recommended.

Who has Capacity to Enter into a Contract?

The term contractual capacity refers to whether someone has legal standing or the ability to enter into a contract or not.
In terms of the law, unless proved otherwise, a person is assumed to have the ability to enter into a contract. A person claiming that they lack capacity to be involved in legal proceedings, would need to prove this.
South African law distinguishes certain people who lack contractual capacity and provides solutions.

Some examples are:

Infants (children below the age of 7 years) have no contractual capacity and their legal guardian would act on their behalf;
Minors between the ages of 7 and 18 would need the assistance of their legal guardian to enter into contracts;
Individuals with mental illnesses have no contractual capacity and a curator, who is appointed to safeguard that person’s financial and personal matters, would contract on their behalf;
Insolvent individuals have limited contractual capacity and may only enter into contracts with the assistance of their trustee.

If someone is unsure as to whether they have contractual capacity, legal advice is always advised.

Be Extra Vigilant!

When you receive an e-mail advising you that someone’s bank account details have changed, be on red alert.

The onus is on you, the person making the payment, to ensure that you are paying the money into the correct bank account.

Protect yourself and your business from fraud by taking the following steps:

Before making any payments into the account, ALWAYS phone the person and confirm that they have asked you to pay into a different account. It’s worth going a step further by asking them to send you confirmation of the bank account details from the bank.

What is entailed in opening/registering a Company?

The following steps are involved in registering a company.

Propose 5 names for your company, listing your preferred name first, for submission to CIPC.
Once a name is secured, DMF will complete the registration process with CIPC, for which we need the following details of your Directors:

Copies of I.Ds (must be legible and certified). CIPC will not accept eligible or unclear or dark copies. We will date the I.D. documents once received, as they cannot be older than 3 months;
Physical and Postal Addresses;
Nominated Registered Address;
Cell-phone numbers; and
Email Addresses.

Once we have submitted this information, we will receive a form from CIPC for the Directors and the Incorporator to sign.
Once lodged with CIPC, the Company will be registered.

Note: The whole process needs to be completed within 10 days from the date of lodgment.

How quickly Directors sign and return the documents determines the speed of the company registration.

HOMEOWNER IN A COMMUNITY SCHEME?

Part 1: Learn about the Community Schemes Ombud Service Act for resolving disputes

COMMUNITY SCHEMES OMBUD SERVICE ACT 9 OF 2011

The purpose of the Ombud is to provide a dispute resolutions mechanism within community schemes.

Sections 1 – 37 deal with the creation of the Ombud Services.

Sections 38 – 48 deal with Applications.

The Ombud can also be approached for collection of arrear levies as well as various other issues as specified in Section 39.

Sections 49 – 52 deal with Investigation of applications and representation.

You are not allowed legal representation unless this has been consented to by all parties; the dispute relates to a question of law; the issue is complex and of importance; or the parties are unable to represent themselves.

Sections 53 to 57 deal with the Adjudicators Orders.

An adjudicator can dismiss an application if frivolous, vexatious, misconceived or without substance. If the order is for the payment of money, it can be enforced as if it were a judgment. Right of appeal is only on a question of law.

Sections 58 to 60 deal with General Issues.

Part 2: Learn about your obligations and what you should be paying the Ombud monthly

Every owner in both a Home Owner Association (HOA) AND Sectional Title Scheme (ST) is required to pay a monthly contribution to the Ombud Offices at the Community Scheme Ombud Service (CSOS).

Regulation 2 provides for the calculation of the monthly levy and states that the levies are payable quarterly by the HOA or BC to the Ombud.

An owner in a sectional title scheme within a HOA will be required to pay a levy for his membership to the HOA as well as the BC.

Levies charged by the HOA or BC of R500.00 or less are exempt from the CSOS contribution. Levies above R501.00 will be 2% of the monthly levy and capped at R40.00 per month. For example: Monthly HOA levy is R2750 – R500 = 2250 x 2% = R45 so capped at R40. If the levy is R1500 – R500 = R1000 x 2% = R20.

Regulation 4 provides that where the owner of a section’s net income is below R5500 per month, they are entitled to a 100% waiver of application and adjudication fees and must lodge an application to the Ombud in this regard.

Any other person may lodge an application for a discount and/or waiver for consideration by the Chief Ombud.

Fees for an application are R50.00 and for Adjudication – R100,00.

Chapter 4 of the CSOS regulations refers to the promotion of good governance, training and education.

Regulation 14 (1) provides that a scheme executive must:
(a) take reasonable steps to educate himself about the scheme, its affairs and activities and the legislation of governance documents in terms of which the community scheme operates.

(b) take reasonable steps to obtain sufficient information and advice about all matters to be decided by the scheme’s executives to enable him to make a conscientious and informed decision.

Regulation 15 requires that EVERY COMMUNITY SCHEME must insure against the risk of loss of money belonging to the scheme and that they are covered by fidelity insurance. This may mean that BC’s have to increase their cover.

Regulation 15(5) does provide that a community scheme is not obliged to obtain cover if the monies of the scheme are covered by fidelity insurance and I would suggest that if you have a managing agent, you submit the fidelity insurance to the Ombud for confirmation as to whether it is sufficient or not, prior to taking out new insurance.

Part 3: What you need to know about the Sectional Title Schemes Management Act

The SECTIONAL TITLE SCHEMES MANAGEMENT ACT NO 8 OF 2011 provides for the establishment of bodies corporate:

to manage and regulate sections and common property in sectional title schemes and for that purpose to apply rules applicable to such schemes;
to establish a sectional titles schemes management advisory council;
and to provide for matters connected therewith.

Section 3(1)(b) provides for the establishment and maintenance of a reserve amount reasonably sufficient to cover future maintenance – that must not be less than the amount prescribed by the minister.

Regulation 2 provides that this amount is to be a minimum of 25% of the previous year’s levy income. If there is less than 25%, it must be raised in the next budget.

Section 8 (1) provides that trustees must act honestly and in good faith read together with CSOS regulation 14(e) which requires the trustees to “exercise due diligence in relation to any business”.
Section 8 (2)(b) provides that a trustee must:
(i) not receive any personal economic benefit, direct or indirect, from the body corporate or from any other person, and
(ii) notify every other trustee of the nature and extent of any direct or indirect material interest which he or she may have in any contract of the body corporate as soon as such trustee becomes aware of the interest.

Part 4: Know the Regulations which provide for new Management Rules (Annexure 1 of the Sectional Title Schemes Management Act)

PMR 2(m) Units are defined as Primary (flat) and utility (storeroom/garage).

PMR 5(2) If a scheme has less than 4 owners of primary sections, owners are trustees without election;
PMR6(2) A managing agent or an employee of a managing agent can’t be a trustee unless they are a member;
PMR7(1) A member may nominate any person for the office of trustee.
PMR8(4) The body corporate must provide indemnity for a trustee unless the action is mala fide or grossly negligent. It states that the trustee must be indemnified, as a result of any official act that is not in breach of the trustee’s fiduciary obligations.
PMR11(5 Trustees may attend a trustee meeting by telephone or other method
PMR13(3) If a quorum is not present, the trustees present (but not less than two) must adopt interim resolutions. These resolutions do not take effect until confirmed.

PMR15(2) A person may waive their right to notice of an AGM.
PMR17(1) AGM’s must be held within 4 months of the BC financial year end unless all owners agree in writing, within one month of the BC financial year end, to waive the right to the meeting and consent in writing to motions that deal with all the items of business that must be transacted at the AGM. Where there are two or ore owners, all the owners must consent to this.

PMR17(10) Owners are permitted to attend AGMs by telephone or any other method and will be considered to be present.

PMR18 Must act fairly, impartially and courteously to all members, ensure people entitled to speak are allowed to do so, make decisions on points of procedure, settle disputes by giving rulings on points of order.

PMR 19 Quorum is no longer in number but value of members holding – 1/3rd of total votes IN VALUE for scheme over 4 sections and 2/3rd for schemes less than 4 units

A proxy must be on the prescribed form C and if this form is amended it must be substantially the same.

No one may hold the proxy of more than 2 owners not 2 votes, 2 members

Special resolution : must be 75% in number and value. If a special resolution is passed at a General Meeting by less than 50% of owners in value, the Body Corporate must not take any action for a week after the meeting, unless the trustees resolve that immediate action is necessary to ensure safety or prevent significant loss or damage.

Within 7 days, members holding at least 25% of the total votes in value, may, by written and signed request, require that a Special General Meeting be held to reconsider the resolution.

If the trustees receive such a demand, the trustees must not implement the resolution unless it is again passed by special resolution or if within 30 minutes of the starting time of the meeting, there is no quorum present.

Unanimous resolution where the resolution would have an unfairly adverse effect on any member, the resolution is NOT effective unless the owner agrees in writing within 7 days. Either the Body Corporate or the owner can approach CSOS for an award resolving if the owner is actually adversely affected.

An abstention no longer counts as a vote in favour and does not have to be counted in the unanimous count.

PMR 20 Provides that a normal resolution must be adopted by majority vote, calculated in value of the members present and voting.
But Section 6(7) states that on a vote in number each member has one vote

The outcome of each vote, including the number of votes for and against the resolution, must be announced by the chairperson and recorded in the minutes.

PMR 21 Interest on arrear levies may not be more than the maximum rate in the National Credit Act.

The Body Corporate can invest their money in “a secure investment with any institution referred to in the definition or a financial institution in Section1 of the Financial Services Board Act 97 of 1990.”

Although the powers of the trustees are limited to making a “secure investment”, they must still fulfil their fiduciary responsibility in this regard.

PMR 22 The Body Corporate must draw up a 10 year maintenance plan of expected maintenance and repair, the present condition or state of repair of those items; the time when those items will need maintenance; the estimated cost of the repair, the expected life span and any other information.

This plan will have to include major capital items e.g. wiring, lighting, electrical systems, plumbing, drainage, storm-water systems, lifts, roofing, painting, waterproofing, roadways and most other things.

The Body Corporate is required to have an administrative fund for the operating expenses as well as the reserve fund for the maintenance plan.

The trustees must report the extent to which the plan has been implemented at the AGM.

PMR 23(3) The building must be valued for insurance replacement value every 3 years.

PMR 26(4) Schemes must present audited financials at the AGM. Previously schemes under 10 units could have their accounts checked by an accounting officer. Accounts must be independently audited.

PMR 27 Body Corporates must now keep names of members and tenants, their ID, mailing address, phone number and e-mail. Owners are obligated to inform the Body Corporate of a change of tenant

The Body Corporate must also keep copies of the registered plans as well as other stipulated documents

On termination of contact with a managing agent, that person must hand over all the body corporate documents within 10 days.

PMR 28 Deals with the appointment of Executive Managing Agents (Administrators)

PMR 29 Luxurious and Non-luxurious improvements are now referred to as “reasonably necessary” and “not reasonably necessary’. These terms are still not specifically defined

In terms of a resolution (what type is not defined) the Body Corporate can be directed to meters for electricity gas and water

PMR 30 Relates to the use of sections and common property The Body Corporate must take all reasonable steps to ensure that a member or occupier does not use the common property so as to unreasonably interfere with other persons lawfully on the premises
Owners must still maintain their sections. If the lack of maintenance threatens the stability or safety of the building or materially prejudices the interests of the Body Corporate, they must remedy and recover the reasonable cost thereof from the member.

Part 5: Understand the Conduct Rules (Annexure 2 of the Regulations of the Sectional Title Schemes Management Act)

Rules are now filed with the Community Schemes Ombud Service (CSOS) and not the Deeds Office.
CSOS will now consider all rules to ensure that they are reasonable and appropriate to the scheme. CSOS will issue a certificate of approval from which time the rules become effective.

S10 of STSMA provides that the prescribed rules under the Sectional Titles Act 95 of 1986 are replaced by the new rules. If your rules have been amended and lodged in the Deeds Office those rules will still apply.

Prescribed Management Rule 3(2) states that an owner must take all “reasonable” steps to ensure compliance with the conduct rules by any tenant or other occupant of any section or exclusive use area.

Additional Rules:

(1)(2) An owner or occupier suffering with a disability and who reasonably requires a guide, hearing or assistance dog must be considered to have the trustees’ consent to keep the animal in a section and to accompany it on common property.

7(3) an owner or occupier of a section must take reasonable steps to ensure that the owner or occupier’s visitors do not behave in a way likely to interfere with the peaceful enjoyment of another section or common property.

ANNEXURE 3 of the regulations gives the FORMS and includes

Form A – notification of change of domicilium to the Ombud;

Form B – notification of amendment of rules to the Ombud;

Form C – Proxy form

If the proxy form is changed in any way, it must still be substantially the same.

Top 10 Tips when buying or selling a home.

SELLING

Advise your bank of your intention to sell as soon as you decide to market your property.
Your agreement is binding once signed by both parties. Don’t be pressurised to enter into an agreement you are not 100% happy with.
Verbal agreements are not valid for the sale of property.
It’s worth having a home inspection report to ensure any issues are disclosed early in the transaction.
Voetstoots means you are selling the house with its defects – but if something is broken and doesn’t work, declare it in the agreement. This clause won’t protect you if you hide the defect.
If you are selling in a Sectional Title Scheme and have extended your unit, make sure the extension has been registered in the Deeds Office
Be upfront about whether your building plans have been approved or not.
Fixtures and Fittings (all things attached to the house) remain, but be reasonable. If the kitchen cupboards aren’t bolted to the wall, advise the Buyer you are taking them. If you want to remove the chandelier, specify this in the agreement.
Don’t give early occupation. Things in your house will break as soon as the Purchaser moves in and you may be liable for repair costs.
The choice of conveyancer can be negotiated by both parties. Don’t let the Estate Agent pressurise you to use their choice.

BUYING

Understand your costs. Remember there are bond as well as transfer costs and transfer duty.
Your agreement is binding once signed by both parties. Don’t be pressurised to enter into an agreement you are not 100% happy with.
Verbal agreements are not valid for the sale of property.
It’s worth having a home inspection report to ensure any issues are disclosed early in the transaction.
Voetstoots means you are buying the house with its defects so know what you are buying. Flush the toilets, turn on taps, open and close doors.
If you are buying into a Sectional Title Scheme, note the Rules, check the Financials and find out about special levies before signing the deal.
Check if the building plans have been registered.
Fixtures and Fittings remain, but be reasonable. If you want the ornate mirror that is hanging in the hall, specify it must stay.
Don’t be shy to check the house thoroughly. Old houses come with their quirks. Make sure you can live with them or have budgeted to repair them.
The choice of conveyancer can be negotiated by both parties. Don’t let the Estate Agent pressurise you to use their choice.

What is FICA and why we need it?

FICA stands for The Financial Intelligence Centre Act, which came into effect on 1 July 2003.

FICA was introduced to fight financial crime, such as money laundering, tax evasion, and terrorist financing activities. FICA brings South Africa in line with similar legislation in other countries.

It is a means to ensure that an institution is required to ‘get to know the client’. Financial institutions, like banks or other organisations such as attorneys’ firms or estate agencies, do this by keeping proper records of their clients, requesting particulars and keeping records of where funds are coming from and where they are going.

The Act places an obligation on the banks/attorneys’ firms to FICA their clients and it is a criminal offence for them not to do so. Failure to FICA clients can lead to a prison sentence (ranging from 5 to 15 years) and or a fine (ranging from R 1 000 000 to R 10 000 000) depending on the offence.

Offences that are punishable under the Act, include, but are not limited to:

Failure to identify persons involved in a contractual obligation
Destroying or tampering with records
Failure to advice the Centre of a suspicious client/person
Failure to report cash transactions
Failure to report suspicious or unusual transactions.

Is it necessary to draw up a shareholders agreement?

There is often still great uncertainty as to the relationship between an Memorandum of Incorporation (MOI) and shareholders’ agreement and whether a shareholders’ agreement is at all necessary.

In terms of the Companies Act 71 0f 2008 the MOI is positioned as the key founding document of a company and requires that any shareholders’ agreement must be in line with the company’s MOI and the Act. The MOI is binding between the company and each shareholder, between the shareholders themselves (if there are more than one), and between the company and each director or prescribed officer, or any other person serving the company as a member of a committee of the board. Irrespective of the number of directors or shareholders in a company the MOI remains the most important foundational document of a company.

When registering a private company with the Companies and Intellectual Property Commission (“CIPC”), the CIPC provides all newly registered companies with a short standard MOI contained in the Regulations to the Companies Act. Fortunately, the Companies Act also allows companies to amend this default MOI by filing a bespoke MOI to include additional provisions, ensuring that companies can address their specific and individual needs.

The shareholders’ agreement of a company on the other hand only applies if there is more than one shareholder and takes the form of an agreement between multiple shareholders of a company. The primary aim of such an agreement is to regulate the relationship between the shareholders of the company.

Shareholder agreements typically will require consideration of the way in which the company shareholders will manage their affairs, for example, the buying and selling of shares, share valuation, shareholders’ duties, and responsibilities etc. In many ways such an agreement is like a partnership agreement between business partners, with the shareholders’ agreement contractually regulating the relationship between shareholders.

It is important to note is that if the MOI is in conflict with the Act, the Act generally trumps the MOI. In turn, if a shareholders’ agreement conflicts with the MOI, the MOI generally trumps the shareholders’ agreement.

Besides the fact that the MOI supersedes a shareholders’ agreement, there is another major difference between the two documents. An MOI must be submitted to the CIPC making the MOI a public document. The shareholders’ agreement on the other hand is not generally publicly available. A shareholder’s agreement is therefore private and can contain confidential information relating to the shareholders and the company.

But should you have a shareholders’ agreement? In our view, we believe it generally important to have such an agreement in place where there are multiple shareholders to regulate the relationship between the shareholders and company more extensively. Private aspects of the company and shareholders can also be addressed in this agreement. Care must however be taken to carefully assess the relationship between the MOI and shareholders’ agreement to avoid conflicts that could have unforeseen consequences and override the agreed upon provisions of the shareholders’ agreement.

If you don’t yet have or have been wondering about whether you should get a shareholders’ agreement drafted for your company, make contact with Mike Wiliams our commercial specialist to help you look into options for getting a shareholders’ agreement in place.

Purchasing a Unit in a Sectional Scheme

A unit can be made up of:

a section and
an exclusive use areas (EUA) examples of which include garden areas, parking bays and store room and
an undivided share of the common property.

This should all be reflected in your agreement of sale. Make sure you know what you are purchasing.
Sometimes an EUA may be created in terms of the rules and impacts your ownership of your unit.
You will pay a monthly levy to the Body Corporate in addition to your rates, electricity and water account and bond repayment.
If you fall into arrears with your levies, the Body Corporate can take legal action against you and any outstanding levies will have to be paid up to date in order to sell your unit.

Bridging finance

Bridging finance can facilitate the transfer of properties by allowing access to funds locked up in secured property transactions that are waiting for registration in the deed’s office.

The costs of selling a property are often overlooked and do add up. Sellers usually have more than sufficient funds locked in the property, but without access to these, the transaction can be stalled and potentially fall apart. Conveyancing attorneys often need these costs paid before they can transfer the property. Bridging finance can provide access to a significant portion of these funds, which can be used for:

Commission advances – where agents that have sold properties require access to their commission prior to transfer,
Seller advances – towards rates/levy clearance certificates, transfer costs, or even a deposit on the next property, or
Mortgage advances – new/switch/increased bonds where clients require funds prior to bond registrations for deposits on alterations, or for the deposit/purchase price on a new property.

Underlying transactions need to be secured and unconditional prior to any advances. Bridging finance companies will advance a percentage (often around 80%) of the net proceeds that are due to the individual/entity that requires the funds. They will then charge a daily discounting fee based on the amount advanced, which is settled directly by the attorneys on registration of the transfer/mortgage bond.

Unlike many traditional credit agreements, there are no restrictions on where the funds advanced via bridging finance transactions can be used, and these often only take a few days to put in place and pay out.
When choosing a bridging finance company, a good place to start is on the Bridging Finance Association of South Africa’s (www.bfasa.org.za) website to make sure they are reputable and registered with the association. The BFASA is a representative body for the industry and has a code of conduct that all registered bridging finance companies need to comply with. The website has links to its members and it is worth getting comparable prices from a few providers, to check you are getting a good rate!

Information shared by Grant Gibson of Fever Three Finance on the KZN North Coast.

Ante nuptial Contracts

Make sure you have one as it dictates your financial future after marriage.
An Antenuptial contract dictates your financial future after marriage, how you transact with third parties and directs how your assets will be distributed not only on divorce but also on death.
Your marriage contract will fall under one of the following marriage regimes:

In community of property (all assets and liabilities are equally shared and jointly owned by spouses)
Out of community of property – with accrual (each spouse declares his/her estate’s nominal value at commencement of the marriage and retains their assets and liabilities (unless expressly excluded) until death or divorce, when the accrual of each will be calculated and divided)
Out of community of property (all assets and liabilities of the spouses are separate, unless otherwise provided for in the ANC).

Having an ANC offers a number of benefits, for example:

Preventing your intended marriage from automatically being in community of property,
Offering transparency in your relationship by recording the rights, duties and consequences (legal and proprietary) of your marriage, and
Preventing unnecessary disputes with your spouse down the line.

Why have an ANC and what is accrual?

Marriage in community of property applies automatically where parties do not conclude an ANC, meaning that all of the parties’ assets and liabilities, whether acquired before or during the marriage, fall within one joint estate. One of the consequences of this is that creditors are not obliged to tell the difference between which party owns what; they can seek satisfaction from the entire joint estate. Marriage in community of property is also extremely risky for parties conducting their own businesses or incurring debts, and it can often limit the parties’ contractual capacities.

Marriage out of community of property without accrual gives the parties absolute independence of contractual capacity and protects the estates of each party against claims by the other party’s creditors, but there is no provision for any sharing. There is thus a heavy onus to prove that he / she was entitled to anything from that party’s estate on dissolution of the marriage. Where one party stays at home to raise children and does not contribute financially towards the marriage, and the other spouse works and accumulates assets, the former may find herself with nothing and no claim to the assets of the latter.

In Marriage out of community of property with inclusion of the accrual system each spouse retains and controls their own estate for the duration of the marriage. However, on dissolution of the marriage, the spouses will share in the accrual or growth of their respective estates.

ANC without accrual.
Assets acquired before or during the marriage remain separate throughout the course of the marriage. Assets are not shared and each party has a separate estate.

Advantages:

If one party goes insolvent, creditors may not attach the assets of the other party; and
Each party is legally obliged to offer financial support to one another should one be unable to support himself/herself.

Disadvantages:

In the case of death or divorce, each party is only entitled to those assets they have accrued in their name. Should one party choose to stay at home to raise children, he/ she would not be entitled to the assets accumulated by the other partner.

ANC with accrual (most popular choice).
Each party states the value of their respective assets at the beginning of marriage, and thereafter, any accrual in the respective estates is shared. Parties can state that specific assets be excluded from the accrual, for example, pension funds, cars, shares. Inheritances and donations between spouses are excluded automatically.

Advantages:

Both parties share in the wealth accumulated during marriage;
If each party owned property before the marriage, it remains in their respective names;
Parties conduct their own independent financial affairs;
If one party goes into debt, it cannot be claimed from the estate of the other party;
In the case of divorce, any assets accrued whilst married that are not excluded in the ANC are shared – it doesn’t matter who acquired them. Each party’s final net asset value is calculated by subtracting their liabilities from their assets and deducting their commencement value nominated in the ANC;
The ANC can be tailored to suit your needs; and
It protects a party who remains at home to care for the family.

IMPORTANT POINTS TO REMEMBER WHEN SIGNING AN OFFER/MANDATE FROM A DECEASED ESTATE

EXECUTOR: The Executor steps into the shoes of the deceased and winds up the deceased’s estate.

LETTERS OF AUTHORITY/EXECUTORSHIP: When the death is registered with the Master’s Office, they will issue LETTERS OF AUTHORITY for estates under R250,000 or LETTERS OF EXECUTORSHIP for estates above R250,000.

REQUIREMENTS FOR YOUR SALE AGREEMENT: You CANNOT sign a Sale Agreement before the LETTERS OF AUTHORITY/EXECUTORSHIP have been issued.

All estate transfers need a Special Condition that says “subject to the consent of the Master of the High Court”. When the Power of Attorney has been signed, the Conveyancer will send the signed Power of Attorney with the Heirs Consents to the Master to Endorse.

A deceased transfer cannot be lodged without this endorsement.

Section 35A of the Income Tax Act and its effect on property transactions in South Africa.

Non-resident sellers of immovable property in South Africa would do well to familiarise themselves with Section 35A of the Income Tax Act, 58 of 1962 (“the Act”) for the conveyancing process and for the South African Revenue Service (“SARS”) purposes.

Section 35A of the Act was put in place to prevent non-resident sellers of immovable property from disposing of their property without paying capital gains tax to SARS.

In terms of South African law, there are different types of residents, for example, a resident defined by the Act in terms of the so-called ‘physical presence test’ and an ordinary resident defined in terms of South African common law. An individual is considered to be an ordinary resident if they will return to South Africa after being abroad. If not ordinarily resident, the physical presence test will need to be used to determine the individual’s status as a resident or not.

The physical presence test comprises of the following criteria, and to meet the requirements of the test to be considered a resident, an individual must physically be present within the Republic for:

91 days in total during the year of assessment under consideration;
91 days in total during each of the five years of assessment preceding the year of assessment under consideration; and
915 days in total during those five preceding years of assessment.

If the above requirements are not met, or if an individual meets the above requirements but is outside of the Republic for a continuous period of 330 days or more, the individual will not be regarded as a resident for tax purposes, meaning that they will be subject to tax only on income that has its source in South Africa.

Section 35A of the Act is only applicable where the seller is considered a non-resident, based on the above questions and requirements not being met, and where the immovable property being sold is in excess of R2 million.

Where the property is in excess of the above threshold, the purchaser of such immovable property is required to withhold funds from the amount due to the non-resident seller and to pay the funds over to SARS to pay the seller’s Tax that is due.

Where the purchaser does not withhold the funds and where the purchaser knows or reasonably should have known that the seller is a non-resident, the purchaser will be held personally liable for payment of such amount over to SARS.

How do I get a judgement rescinded.

Are you struggling to buy a car or get a home loan because you have had a default judgement taken against you? Once you have paid off your debt, there is a procedure you can take to have the default judgement rescinded.

Many South Africans have default judgements granted against them which are registered with the credit bureau. Some people don’t even know about it until they apply for credit. This happens frequently, the most common cause being a summons served at an old address which is no longer used by the debtor. This results in the debtor’s name being listed with the credit bureau with a bad credit score rating against their credit profile.

When a default judgement application is brought against a person, the uniform rules of court give that person an opportunity to present their case and dispute any action brought against them. Failure to address the court by the person against whom an action is brought, may lead to a default judgement being granted against them.

When your name is listed with the credit bureau it can be very difficult to secure credit. This is because all credit applications processed by financial institutions are run against the profiles that credit bureaus have on individuals. The listed individual is then unable to take out any form of credit, ranging from clothing accounts to home loans.

I had a default judgement granted against me and have now repaid my debt, what do I do next?

Once the defaulting debtor has made all payments including interest towards the creditor, the defaulting debtor may approach court to have the default judgement rescinded. This would be at the very same court which granted the default judgement against the debtor.

There are three grounds upon which the debtor may apply for a rescission of a default judgement in the Magistrate’s court:

Judgement debt has been satisfied by the debtor within a reasonable time of becoming aware of the judgement
The judgement creditor consents to the rescission of the default judgement
If there is a valid defence, but this could not be raised due to the debtor having no knowledge of the application for default judgement.

Furthermore, if the reason for applying for a rescission is due to a defence, the debtor will have to provide reasons to the court why there was no intention to defend the application. The court will look at the circumstances surrounding the granting of the default judgement and thereafter make an order.

On good cause shown, the court may rescind/vary the judgement on such terms it deems fit. Each application is dealt with on its own merits, which means rescission is not always guaranteed. Once an order is granted, the next step is to contact the credit bureau and ask them to update their records.

You can contact our offices for assistance with an application for rescission and getting your name removed from the credit bureau records.

Payment of special levies on transfer.

With the implementation of the Sectional Titles Schemes Management (STSMA), liability as to whom is responsible for payment of a special levy or special contribution changed.

Section 3 of STSMA now provides that with a change of ownership, the purchaser will from date of registration of transfer be liable for payment of the pro-rata special contribution raised by the BC, provided that the Body Corporate has permitted the owners to pay the special contribution in instalments to a date following registration of transfer to the purchaser.

Buyers should be cautioned to investigate if a special contribution has been raised, before concluding a Sale Agreement, as they will be liable for this additional expense.

Sellers must equally be careful. Should a seller neglect to advise a buyer that a special levy has been raised by the Body Corporate, they may still be held liable for payment of the full special levy, if it can be shown that they had knowledge of the special levy and that they willfully misrepresented their knowledge thereof.

There’s more to electronic signatures than meets the eye!

As the commercial world moves towards a greater level of digitization, a move accelerated by the Coronavirus pandemic, organizations are starting to implement electronic and automated solutions in an attempt to reduce paper-based agreements and the need for physical contact.

Electronic signatures are now legally recognized in South Africa as provided for by common law and the Electronic Communications and Transactions Act (25 of 2002) (“ECTA”).

The South African law now adheres to and brings us in line with the EU Directive on electronic signatures. This means that any company operating in the South African market can now use eSignatures as a signing method, and they are treated equally as handwritten signatures.

Know what type of electronic signature to use.

The ECTA distinguishes between 2 types of electronic signatures:

Standard Electronic Signature (SES) – which means data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature (i.e. digital or scanned), and
Advanced Electronic Signature (AES) – which means an electronic signature that results from a process which has been accredited by the South African Domain Name Authority.

A Standard Electronic Signature (SES) may be a scan of the signatory’s handwritten signature or be drawn using digital tools. An SES can be used in most transactions unless the law prohibits the use of electronic signatures in a specific transaction; or the law requires that an advanced electronic signature be used; or parties agree on another method of signature.

An advanced electronic signature (AES) is an electronic signature verified by an accredited authority. These types of signatures have a higher level of credibility due to their compliance with the following specific requirements. The AES should be:

Uniquely linked to its signatory and be able to identify him/her
Created under the sole control of the signatory
Based on the face-to-face identification of the signatory
Protected in such a way that it is possible to notice any change of the data or data message contained in the document.

According to ECTA, there are some instances where an electronic signature other than a standard electronic signature may be required. In such instances, the document can only be signed with an Advanced Electronic Signature as defined by ECTA. In South Africa, an advanced electronic signature is required for:

a suretyship agreement and
signing as a Commissioner of Oaths.

Some agreements may not be concluded electronically
There are also some documents that are excluded entirely by ECTA, and these agreements may not be concluded electronically, including:

agreements for the sale of immovable property;
long-term leases of land exceeding 20 years;
signing of a will or codicil; and
bills of exchange.

This is still a developing area of law and the Act must be followed carefully to ensure all agreements entered into are valid and binding between the parties.

Contact our team at Daly Morris Fuller Inc. for help with any questions or problems you may be facing with regard to electronic signatures.

Selling your vehicle privately? We can help

Whatever your reasons, there will come a time in your life where you may need to sell your vehicle. The sale can be done through a registered dealership, or you can take on this challenge for yourself and sell your vehicle Privately.

The problem people have with Private Sales, is finding the time to jump through all the necessary hoops and red tape to finalise the sale.

Below is a list of all the paperwork you’ll need to sell your car:

The Proof of Ownership is a legal document that must be presented when selling your car. After you pay off your car loan or debt, the financial institution in charge of the vehicle finance will issue you with a Proof of Ownership certificate. If your loan is still outstanding, the financial institution must be made aware of your wish to put the car on sale.
A Settlement Letter – If the seller has an outstanding loan from any financial institution, a settlement letter must be given to state the information about the loan.
Notification of Change of Ownership (NCO) to transfer the right of ownership of your car. When you want to sell a used car, you and the buyer must sign copies of the NOC form, and one copy must be sent to the Department of Transport.
Application for Registration of Motor Vehicle – Once the sale is concluded, the buyer must complete this form.
Vehicle Registration Certificate – You will have a copy of the Vehicle Registration Certificate which would have been issued when you bought the car. The buyer will need the original form for when they register the car.
Service History – The Car’s service history will play a major part in obtaining the best possible resale value for your car. Give your buyer the full-service history booklet and any other receipts for work that would impact future warranties and/or maintenance plans.
Proof of Sale – Once everything is finalised, a receipt and/or an agreement of the transaction should be made, and it usually includes the paid amount, date, car’s registration, make and model of the vehicle, VIN, etc.
Roadworthy Certificate – This certificate is needed within 21 days of the sale and is required during the registration process. If yours has expired, you can quickly get one for the buyer. Just take your vehicle to a testing station with your Identity Document, vehicle registration, and a filled-in Application for Roadworthiness Certification.

The best way to protect yourself from any claims against you after the vehicle has been sold, is to have a Proof of Sale in writing. This is best drafted professionally.

Here at Daly Morris Fuller Inc we can assist you with all aspects of the sale. We will act as the go-between you and the buyer, using our professional experience and expertise to finalise the sale as efficiently as possible.

How To Report A Deceased Estate

The administration of deceased estates is governed by the Administration of Estates Act 66 of 1965 (the Act).

On the death of a person, the surviving spouse or nearest relative must report the death within 14 days to the nearest Master of the High Court office in the area/district where the deceased was residing for the six months prior to his death.

There are specific forms that need to be completed in order to report the death to the Master’s office.

No one can liquidate or distribute the estate of a deceased without having first obtained Letters of Executorship/Letters of Authority.
Section 8(1) provides that if any person has a document which they think is a Will in their possession at the time of death, they must submit this to the Master’s office.

If an estate is under R250,000, the Master’s Office will issue Letters of Authority and the reporting and winding up requirements of the estate are easier.

If the estate is over R250,000, Letters of Executorship must be issued and the full process prescribed by the Administration of Estates Act must be followed.

The following reporting documents are required to report an estate:

Death Notice form – J294.
The original or certified copy of the death certificate.
The original or certified copy of the marriage certificate or acceptable proof of marriage as accepted by the Master or proof of registration of a customary marriage or proof of a religious marriage (Muslim/Hindu) declaration confirming the existence of marriage.
All original wills or codicils or any document purporting to be such.
Completed next of kin affidavit (J192 form).
Completed inventory (J243 form) showing all assets of the deceased.
List of creditors is optional and if available at the time should be listed.
Nominations by the heirs for the appointment of a Master’s representative in the case of an intestate estate, or where no executor has been nominated in the will, or the executor declines the appointment.
Acceptance of Master’s Direction (J155 form) or acceptance of trust as executor in duplicate, completed by the person accepting the appointment.
Certified copy of the identity document of the person accepting the appointment together with a recent utility bill confirming their address.

On receipt of the documents, the Master’s Office will issue Letters of Authority in terms of S8(3) or Letters of Executorship, depending on the value of the estate as reflected in the inventory.

Once the Letters have been issued, the Executor “steps into the shoes” of the Deceased and can open a bank account and begin winding up the estate. All the property of the deceased vests in the executor, who is empowered to take full control of all assets forming part of the estate. The duties of the executor, include selling the property; realising its proceeds; settling debts and paying out the balance to the heirs.

The Executor will notify all known debtors and creditors of the deceased’s death, as well as publish a notice in the Government Gazette and one of the newspapers in the area in which the deceased had resided at least 12 months prior to their death.
This notice calls on persons having claims against the estate to lodge such claims with the executor within a period of three months from the date of the publication, as week as debtors to pay any claims due to the estate.

The executor then prepares the Liquidation and Distribution Account showing the funds in the estate, what needs to be paid out of the estate and what amount is left to distribute to the heirs. This Liquidation and Distribution Account is then submitted to the Master’s office for examination.

Once inspected by the Master and any queries have been dealt with, the Executor will advertise that the account is lying open for inspection at the Master’s office for a minimum of 20 days.
Any person interested in the estate may at any time before the expiry of the period allowed for inspection, lodge an objection. The Master will deliver this objection to the Executor who will then respond.

When an account has been laid out for inspection and no objection has been lodged, the executor will pay the creditors and distribute the estate according to the Liquidation and Distribution account.
At DMF we have a specialist department to help you meet your legal obligations, freeing you to focus on your recovery on the death of a loved one.

A living Will?

A Will is an important document as it sets out our last wishes and directs our loved ones on how to distribute and devolve our estate once we have passed away.

While a Will deals with our assets, there is another Will which deals with our medical wishes when we are unable to express these wishes. It is called a living Will.

What is a living Will?
A living Will is a legal document that sets out what should happen to you, should you be in a coma, on life support, on a ventilator or be terminally ill. It is an expression of your wishes on what should happen to you should your chances of survival be minimal. This can alleviate some financial burden on your family and help curb hospital bills.

A living Will also be used to determine what should happen to your organs when you die. Some people choose to donate their organs for medical research, upon their death.

Who can execute a valid living Will?
Anyone over the age of 18 who is of a sound mind, can have a living Will drawn up. Although not recognised in terms of statutory law, the South African Constitution does take into consideration an individual’s right to accept or deny medical treatment. This is entrenched in the Constitution. Section 12(2) states that everyone has the right to bodily and psychological integrity, which includes control over one’s body.

A power of attorney is not sufficient and cannot be used in instances where the grantor is no longer of a sound mind. This simply means when you are no longer of sound mind, the power of attorney that has been granted to an individual falls away, making it impossible for the grantee to decide on what should happen to you and your organs.

Just like a Will devolving your assets, a living Will should also be regularly updated in accordance with your current wishes and circumstances.

A living Will should be made known to your loved ones and your lawyer, this eliminates the element of uncertainty and assists your doctor in knowing which steps to take. It is advisable that in circumstances where you no longer want it, you have it destroyed instead of amending it.

Ensure that your regular doctor and family have copies of your living Will.

What can you not state in the living Will?
Instructions for doctor assisted suicide or euthanasia cannot be included in a living Will. A request for medical treatment to be withheld can be made, but a request for assistance from the doctor to end your life cannot be made.

Some doctors may refuse to carry out your instructions in terms of the living Will, as they may say it is against the Hippocratic Oath. Ensure that your doctor Will be able to carry out your wishes as per your living Will.

Conclusion
A living Will Will relieve your family from making very difficult and stressful decisions. Consult with DMF for more information on having a living Will drafted that Will best suit your wishes. We do not charge for the drafting of a Will when DMF is appointed as the executor of your estate.

Debt Collection – Leave it to DMF

With inflation on the rise and necessities being expensive, more and more South Africans are relying on credit to make ends meet.
With the high rate of credit receivers, there is also a high rate of borrowers defaulting on their credit. The Defaulter hereafter is referred to as a Debtor. This has created a space for Debt Collection.

Debt Collection is the act of collecting money from a defaulting Debtor on behalf of another person. Many companies do not have the resources internally to go after defaulting Debtors. They outsource this function to Debt Collection Companies and Attorneys.

DMF’s Debt Collection procedures:
The first step would be sending a Letter of Demand to the Debtor, notifying them that they are in arrears and that their debt has become due and payable. It is important to know the details of your Debtor, such as their full name, identity number, residential address, and place of employment, this is not an exhaustive list. These details assist in tracking and tracing the Debtor.

The Debtor will then have 10 business days to respond to the Letter of Demand. If there is no response from the Debtor after the 10 days has lapsed, we then proceed to the next step. The extent which Debt Collectors will go to is dependent on the instructions of the Client, as well as the amount that needs to be recovered so as to ensure clients don’t ‘throw good money after bad’ especially if the capital amount is minimal.

The second step is issuing of Summons at Court. Once the Summons is issued, it is served on the Debtor by a Sheriff. Once served, the Debtor has 10 (TEN) business days to enter an Appearance to Defend the matter. If the Debtor does not enter an Appearance to Defend, an application for Default Judgement can be made.

After an application for Default Judgement is made and an Order is granted, we move onto execution of the Court Order, which is the exciting part of the process.

Enforcement of a Judgement Debt:
Once a Judgement is granted it is then served on the Debtor by means of a Judgment Letter, informing the Debtor of the granted Judgement. Unfortunately, not all Debtors go on to comply with the Court Order. This then calls for a more assertive approach, which would be instructing the Sheriff to execute a WRIT or Warrant of Execution. The Warrant of Execution is two-fold. One can be against Movable Property and the other against Immovable Property.

A Warrant of Execution or Writ is a document instructing the Sheriff to attach and sell property owned by the Debtor, in order to satisfy/settle the Judgement Debt amount.

In certain instances, the value of the attached property of the Judgement Debtor is insufficient to satisfy the Judgement Debt. This does not mean it is the end of the road for the Creditor/Client.
Section 65 of the Magistrates Court Act 32 of 1944 (MCA) allows for the recovery of a debt after Judgement has been granted. This recourse is only available in the Magistrate’s Court. Section 65M of the MCA makes provision for Judgements which were heard in the High Court. During these proceedings, the Court will investigate the financial status of the Judgement Debtor and go on to decide how the outstanding debt amount should be settled. Failure to appear for these proceedings by a Judgement Debtor is an offence and will lead to the issuing of a Warrant of Arrest.

The Creditor/Client can also approach the Court and have the Judgement Debtor’s salary and or the Judgment Debtor’s bank account attached in recovery of the Judgement Debt.

If the mechanisms above are still not enough to satisfy the debt, an application can be brought to Court to attach and sell the Debtor’s immovable property. This should be the last resort.

Debt Collection is not a walk in the park. Don’t waste time, call us today and let us handle your Debtors

When your neighbour’s tree becomes a nuisance

Trees can be the gift of shade, the bearers of fruit and the oxygen we breathe. But what if they are currently the thorn in your side as a homeowner? What remedies do you have when your neighbour’s neglected tree is spewing leaves into your yard, a root is causing damage to the wall or ground on your property, or a large branch has fallen and damaged your car or house?

It is important to consider whether such issues are a private nuisance and legal action is required, or whether they are issues that can be resolved amicably.

These kinds of issues are covered by our common law, specifically the law of private nuisance which provides that every landowner has the right to unimpeded enjoyment of his or her land. Some takeaways from our common law are:

Where a tree species is known for dropping branches, or where it is clear that damage may soon be caused, it would be wise to send a letter to your neighbor advising of this likelihood. This will help you should the issue lead to future litigation.
Where your neighbour neglects and/or refuses to cut the overarching branches on your property, you are entitled to cut these branches and place the offcuts over the wall, taking care not to cause any damage to his or her property.
Where a large undertaking and substantial labour is required, or where repairs have been done, you may claim these amounts from your neighbour with proof thereof.
Where a healthy tree has been uprooted or blown over by a storm, this would be seen as an ‘act of God’ and therefore no liability would be attributed to the owner of the tree.
Lastly, the most frequent issue is leaves. Our courts have ruled that where leaves are filling a neighbour’s pool, clogging gutters and blocking sewerage systems, an objective test be employed. With the growing need to conserve the environment and the shrinking size of properties, a court would weigh the benefits of conserving trees against the nuisance caused to the affected neighbour. Where your claim is minor and/or you fail to produce proof of damage, you are unlikely to succeed in litigation and, in addition, will be liable for a cost order against you.

This is not to say you do not have recourse. As attorneys we like to advise our clients to attempt to solve matters amicably with their neighbours to come to a reasonable solution. Often, it is those that choose not to settle these matters in this way, who suffer the costs later down the line.

It is important to remember that each matter is unique and has its own circumstances.
Should you have any queries regarding a nuisance situation, please feel free to contact our offices.

Cyberbullying in SA – The new legislation

We live in a digital world with the ability to reach millions of people at the press of a button. However, as technology and social media have become part of our daily lives, we have become more exposed to the unfortunate risk of online abuse known as Cyberbullying.

Cyberbullying refers to when a person is bullied or abused by another through the use of electronic devices, such as cell phones, tablets and computers.

Until recently, South Africa did not have a legislative framework in place that dealt specifically with cyberbullying. To obtain some form of legal recourse, these victims have had to rely on other criminal and/or civil law remedies, such as obtaining a protection order.

However, on 26 May 2021, the Cybercrimes Act 19 of 2020 (“Act”) was finalised (though it has not yet come into effect) and is regarded as a major milestone that brings South Africa’s cybersecurity laws in line with international standards. It also consolidates cybercrime laws in one place.

The Cybercrimes Act defines three types of harmful messages that have been criminalised in South Africa. These are messages which:

Incite damage to property or violence.
Threaten people with damage to property or violence.
Unlawfully contain an intimate image of an identifiable person without his/her consent

In addition to criminalising certain harmful messages, the Act includes definitions for cyber fraud, forgery, extortion, and theft of incorporeal property.

The new Act will assist with curbing cyberbullying as there are direct criminal consequences linked to sending messages that threaten someone with violence or sending inappropriate sexual images of a person. A person who is found guilty of any of the above crimes may be sentenced to a fine and/or imprisonment that does not exceed three years.

The Act also provides that a person who lays charges at a police station for these types of cybercrimes can also apply at a Magistrate’s Court for a protection order to prevent the accused person from committing these cybercrimes.

In respect of children, cybercrimes will also form part of the Child Justice Act 75 of 2008, which regulates how children will be dealt with when they are accused of committing crimes and what consequences they will face. Imprisonment may be imposed for children between the ages of 10 and 18, but only as a last resort and for the shortest period possible.

The new crimes provided for in the Act will be additional to the existing remedies available to victims of cyberbullying. Although the Act has not yet come into effect, it is a step in the right direction in helping to combat this scourge.

Various key concepts need to be understood when converting shares held in a share block company into a unit in a sectional title scheme. The following concepts provide a brief outline and understanding of the process.

The share block company, as a separate legal entity, in its capacity as developer, purchases the property.
The property is then developed to create, for example, a block of 10 flats.
100 shares are issued in the company and shares 1 to 10 give the holder thereof the right to use and enjoy flat 1, shares 11 to 20 give the holder thereof the right to use and enjoy flat 2, and so on.
At this point in time, the share block company is still the owner of property.
Now the share block company decides to register a sectional title scheme over the property:
- 5.1. The share block company will instruct a surveyor to draw up plans that illustrate each section to be registered. These are called sectional plans.
- 5.2. The Share block company will apply to the Deeds office for
  - 5.2.1. the opening of the sectional title scheme/register,
  - 5.2.2. the registration of the sectional plans and
  - 5.2.3. certificates of registered sectional title to be issued for each section in the building.
At this point, the aforementioned certificates of registered sectional title will be registered in the name of the share block as it still owns the buildings, even though the shareholders own the right to use and enjoy them.
The shareholders are now in a position to trade their shares for the certificates of registered sectional title. This is called the conversion.
The result of point 8 above is that the shareholder would now be the owner of the sectional title and this fact would be proved in the deeds office by a deed of transfer reflecting the shareholder as the owner thereof.

Is my customary marriage valid and recognised in South Africa?

Many people do not know that a marriage concluded in line with traditional customs is recognised in South Africa.

Customary marriages are recognised in terms of the Customary Marriages Act 120 of 1998 (the Act) which includes certain requirements which parties must comply with for the marriage to be valid.

These requirements are:

the parties to the marriage must be majors (over 18). If any party is a minor, consent of the parents or legal guardians is required;
the parties to the marriage must consent to the marriage;
the parties must not be blood related;
the marriage must be negotiated, entered into and celebrated in accordance with customary law; and
neither party should already be in a civil marriage.

Although the Act itself does not specify the payment of lobola as a specific requirement, it is considered normal practice when concluding a customary marriage.

The marriage must be registered within 3 months of its conclusion, after which the parties will be provided with a marriage certificate.

It is imperative to note that failure to register the marriage does not make it invalid.

If a civil union exists between X and Y. Z will not be able to enter into a customary marriage with Y. Z can only get married to Y if the union between X and Y is in terms of customary law.

Legal implications of a customary marriage

The proprietary consequences of the marriage are that the marriage will be regulated by the Act and that it is automatically a marriage in community of property. This means that all the debts and assets that each party has before and during the marriage will form part of the joint estate. The parties to the marriage may enter into an Antenuptial Contract (ANC) to protect the assets that they already own prior to entering into the marriage. The parties to the marriage, can change their marital regime should they wish not to continue to have their marriage regulated by the Act. However, there are requirements that the parties must fulfill before they can change their marital regime.

Often people think that they can just walk away from a customary marriage without getting a divorce. This is incorrect. A customary marriage can only be dissolved by a court by a decree of divorce. A customary marriage does have legal implications.

Consequences of a Hindu/ Muslim Marriage

Prior to the development of our legislation, marriages which were concluded according to Muslim and Hindu rites were not recognised as having the same legal standing as civil marriages concluded in terms of the Marriage Act 25 of 1961. This meant that parties to these marriages were deemed unmarried and did not enjoy the same rights and privileges afforded to partners in a civil marriage.

The Supreme Court of Appeal (SCA) case of Women’s Legal Centre Trust paved the way for the recognition of Muslim marriages in South Africa. The SCA has given the state 24 months to enact ‘legislation to recognise marriages solemnised in accordance with the tenets of Sharia law (`Muslim marriages’) as valid marriages and to regulate the consequences of such recognition.’

Previously Hindu/Muslim marriages were viewed as polygamous and contra bonos mores (against public policy). Their polygamous nature made them irreconcilable with the Civil Union Act. The consequences of these marriages were that when a spouse passed away the surviving spouse was often prejudiced because they could not claim for maintenance from the estate of the deceased spouse. This was sadly because they were not a legally recognised spouse.

Muslim marriages

Currently Muslim marriages which are solemnised by a registered Imam are regarded as legally valid marriages. They have the same legal status as civil marriages. Muslim marriages which are solemnised by an unregistered Imam are not legally valid and will only be valid in terms of Muslim rites. Parties to the marriage must ensure that the Iman is duly registered with the relevant authorities.

A decree of divorce was not a requirement for the dissolution of a Muslim marriage, making it impossible for women in Muslim marriages to terminate the marriage. This resulted in many women staying in unwanted and unhappy marriages.

Parties to a Muslim marriage can now be entitled to a decree of divorce, proprietary claims in respect of their marital regime and forfeiture of patrimonial benefits as prescribed by the Divorce Act.

Hindu Marriages

South African law currently does not recognise Hindu marriages. Consequently these marriages cannot be dissolved. Hindu marriages are not recognised as they are non-compliant with the Marriage Act and because of their potential polygamous nature. A party to this marriage will be excluded from inheriting in terms of the Intestate Succession Act, as he/she will not be legally recognised as a spouse of the deceased.

A woman in a Hindu marriage with a potentially smaller estate would be left financially destitute as she would not be able to make a claim against her deceased spouse’s estate. Legally she would have no right of recourse. This infringes on women’s Constitutional rights to dignity and equality.

Legal recognition of Hindu marriages is behind the times compared with Muslim and African Customary marriages.

Legislative reforms have now made it possible for partners who are married in terms of Hindu rites to claim for interim maintenance and duty of support upon death or divorce of the spouse.

My partner isn’t paying maintenance, what do I do?

Maintenance disputes are one of the most common areas of dispute that arise in law.

Maintenance is defined as the obligation to provide another person, for example a minor, with housing, food, clothing, education and medical care, or with the means necessary for providing the person with these essentials.

There are two main types of maintenance recognised in our law: Spousal Maintenance – the duty to maintain a spouse after divorce, and Child Maintenance – the duty to maintain children after divorce.

Regarding Spousal Maintenance, reference is made to a ‘duty of support’ between the parties to a marriage meaning that during a marriage, each spouse owes the other a reciprocal duty of support. This support includes accommodation, clothing, food, medical services and other necessities, and is balanced by the couple’s social status, their means of income and the cost of living. The duty to support each other is the responsibility of both spouses and means that if, for example, a woman does not have the financial means to support herself, her husband has a legal obligation to support her, and vice versa.

There are three prerequisites for a duty to support (maintenance) to exist:

A prior or existing relationship;
A need on the part of the person requiring maintenance; and
Adequate resources on the part of the person called upon to provide support.

This reciprocal duty of support comes to an end on termination of the marriage, whether by death or divorce. However, in divorce situations, the Divorce Act 70 of 1979 makes provision for court orders relating to maintenance.

However, neither spouse has a statutory right to maintenance. The language in the Divorce Act is clearly discretionary and the ex-spouse seeking an award for maintenance has no right as such. The discretionary power of the court to make a maintenance award includes the power to make no award at all.

The position differs in respect of Children, where there is a statutory right to maintenance. Every child is entitled to maintenance from their parents, which provides for clothing, housing, education, dental and medical care, as well as recreation. This position is entrenched in Section 18 of the Children’s Act of 2005 which provides that both parents have to support their children according to their means and the needs of the children.

A parent’s duty to support only comes to an end when the child becomes self-supporting. However, a parent’s supporting duty could revive should the child cease to be self-supporting for reasons such as: ill health or disability.

Buying an Existing Business

There are many good reasons for purchasing an existing business, among them access to intellectual property, new technology, additional skills, or an established customer base to help you grow your business.

The sale can be structured in different ways, the most common being: purchasing the business through the sale of share or purchasing the business as a going concern.

Under the sale of share structure, you will be purchasing the shares from the shareholder(s) in the company and become the shareholder. The company’s legal entity will remain intact and will continue operating as is. If you choose this option, it is important to review the foundational documents of the company – the Memorandum of Incorporation and Shareholder Agreement – and the share valuation.

If you decide instead to purchase the business as a going concern, you avoid any transfer of shares. You purchase the business assets, clients, brand name, intellectual property, and goodwill and create a new legal entity. Not every aspect of the business has to be subject to the sale for it to be considered legally ‘a sale of a business as a going concern’. A sale of business as a going concern is considered when the business largely remains the same after the sale as it was prior to the sale, and this will be tested on a case-by-case basis.

Under the sale of share structure there is no change in the relationship with existing employees. The entity remains intact; therefore, the employer does not change and neither do the terms of employment.

Under the sale of a business as a going concern structure, the business is transferred in whole or in part to a new entity and the legal identity of the employer no longer operates the business. The Labour Relations Act sets out what occurs in this instance. Usually the existing employees have their contracts transferred to the new employer on the same conditions as the contract with the previous employer. Deviations from the terms of the existing employment agreements could amount to a renegotiation of the terms as per South African Labour laws.

When it comes to tax, various factors determine whether South African Revenue Services (SARS) will treat the sale of shares as revenue or capital. For this reason, we encourage you to seek professional guidance on the circumstances of your transaction if you intend to sell your shares.

While the sale of a business as a going concern will provide the seller with certain tax benefits, it would have to meet certain requirements. If both the seller and buyer are VAT vendors the transaction may be “zero-rated”, which means the purchaser will not have to not pay VAT on the purchase of the business. If it is not expressly stated that the business is a going concern and the parties to the sale are not VAT vendors, this benefit falls away. The purchaser will then be required to pay VAT on the transaction and may claim it back at a later stage.

Contact DMF if you are considering purchasing an existing business for advice on structuring the sale to best suit your needs.

Protecting Intellectual Property

Turning an idea into reality often requires you to share it with potential investors, suppliers and users.

How can you stop them from re-creating/using your idea?

Intellectual property or IP refers to creations of the mind (inventions, literary and artistic works, designs, symbols, names, and images used in commerce).

As soon as you’ve told someone your idea it is no longer yours. You can protect your intellectual property through a Non-Disclosure Agreement (NDA) that binds the recipient of the idea into a contract to not disclose or use it.

It is a legal contract between at least two parties that outlines classified materials such as an idea, design, data, or information that you wish to share with them for a certain purpose, which restricts the recipient from reproducing or disclosing it.

An NDA, which is a legally enforceable contract, protects your ideas from being reproduced without your consent or giving any credit to you.

When drafting an NDA, be sure to specify clearly the nature and extent of the confidential information you want to protect so that if the recipient breaches the NDA, it is clear to any reasonable person what intellectual property the NDA was drafted to protect. You must also indicate the timeframe in which the information is to be kept confidential and name the parties to the NDA, be they a person(s) or a business entity.

When an NDA is concluded, the recipient agrees that it will not use the confidential information provided in any manner whatsoever save for as agreed between the parties. This includes any use that would deny you of any profit or other remuneration, credit, or ownership that would be expected to be derived from the use of the confidential information, except with prior specific agreement and consent from you in writing.

The NDA also ensures that the recipient will take all necessary steps to ensure that its employees, agents and consultants comply with all the provisions of the NDA.

If there is a breach of the agreement, the party at fault can be held liable.

How to calculate Accrual in Matrimonial Property

Ask DMF for professional assistance

The underlying principle of the accrual system is that spouses only share the growth (accrual) in their separate estates, meaning the difference in the estate that showed the most growth. Spouses who wish to exclude the accrual system in their matrimonial property system must specifically state this in their Antenuptial Contract, otherwise it will be applicable by default.

Calculating accrual becomes important at divorce or death. For divorce purposes it will determine how much must be liquidated and divided between the divorcing spouses. In the case of death, the Executor will be required to determine the accrual of the estate of the deceased to calculate the amount that falls within the deceased estate.

Accrual is calculated by:

1. RECORDING all assets obtained during the marriage;
2. EVALUATING these assets in the present;
3. EXCLUDING assets specifically barred from the accrual system by the Antenuptial Contract;
4. DEDUCTING donations between the spouses, legacies and Inheritances;
5. DEDUCTING debts and liabilities;
6. DEDUCTING the initial value of a spouse’s estate;

The balance is the accrual.

Lost your Title Deed?

DMF’s Conveyancing Department Can Help

New Deeds Office Process to Prevent Fraud

In South Africa – the process of replacing a lost title deed is governed by regulation 68 of the Deeds Registries Act 47 of 1937, which provides for the re-issue of a certified copy of the title deed in situations where the original deed is either lost or destroyed.

In a bid to combat fraud the registered owner of the property is required to advertise the application for the lost title in the local newspaper.

A copy of the advert and the application for lost title deed then lays for inspection at the Deeds Office for a period of two weeks before the application can be lodged in the Deeds Office. The registered owner is required to pay the costs of advertising as well as the costs of applying for the lost copy of the Deed.

As conveyancers, DMF can help you obtaining a copy of a lost title deed while following the correct, lawful procedure.

Why and when you need a power of attorney

Make sure someone can act for you should you become unable to act for yourself.

A Power Of Attorney (POA) is a formal document which empowers someone to conclude juristic acts on your behalf. That person becomes your agent, who is then able to act for you – the principal.

The agent can have limited authority or broad legal authority. This could include giving someone the power to sign a contract or legal documents, make health care decisions, or carry out financial transactions for you, should you not want to, or be unable to act for yourself.

A POA is vital for anyone, no matter what their age, who has money and assets to protect and/or who wants someone to act in their best interest in terms of healthcare choices, should they be unable to make decisions for themselves.

All powers under a POA end upon the principal’s death. Once the principal has died, the agent loses all ability to act in their stead both medically and financially.

How Do Companies Navigate the Cybercrimes & POPI Acts

Having an Information Officer in a company has become essential since introduction of the Protection of Personal Information Act 4 of 2013 (POPIA) and the Cybercrimes Act 19 of 2020 to which the President has given his assent.

POPIA places an obligation on institutions which collect and process personal data to appoint an Information Officer who is responsible for ensuring compliance with conditions for lawful data processing.

In terms of the Cybercrimes Act the main obligations for financial institutions and electronic communication service providers are related to reporting, detection of unlawful activity, as well as availing information and cooperation during investigations by law enforcement. Failure to adhere to these obligations amounts to an offence.

In the monitoring and operation of their computer systems, programs and networks, electronic communication service providers and financial institutions must report any activity that gives reason to believe that a crime is being or has been committed.

The offences provided for in the Cybercrimes Act are presented in a way that makes their interpretation and application very broad – probably due to the many different types of communication and transactions taking place in cyberspace. It is important that service providers and financial institutions familiarise themselves with the listed offences and report these where such action is required.

Should you find your business in a situation where you had an obligation, but failed to report it, speak to DMF. Our committed team will hear you out and provide professional legal advice.

Who gets custody of the children?

While it may be the general view that children should grow up in a home where both parents are present to take care of the family, there are often challenges which prevent this, such as death, divorce, separation, or a parent seeking greener pastures.

These situations often result in children living with and growing up with only one parent or guardian. The Children’s Act 38 of 2005 was promulgated to ensure that children in South Africa receive care that is conducive to their welfare.

Parental rights and responsibilities refer to the care, guardianship, custody, residence, contact and access (visitation) as well as maintenance privileges that parents have over their children.

Biological parents acquire these rights automatically, but circumstances will determine to what extent these rights are exercised.

In deciding which party should be awarded custody, the Courts look at various factors so it is not a given that the mother will get custody. The determining factor is what is in the best interest of the minor children.

If the Court finds that the mother is not a fit and proper person to have custody or that her circumstances do not cater for the best interests of the children, it may decide that it is in the best interest of the children to award custody to the father.

It may even entrust the custody of the children in parties other than the biological parents, for example, grandparents or other relatives, foster care homes or adoptive parents. The party awarded custody rights must then act in the best interests of the children.

The wishes of the children concerned must also be considered. At a basic level, the following are required by children for their development and wellbeing:

1. Shelter/accommodation and sanitation,
2. Living conditions that promote their well-being,
3. Clothing,
4. Food,
5. Protecting the children from abuse, harm, and ill-treatment,
6. Medical care,
7. Provision of education to develop the children’s skills,
8. Promoting the principles in the Act,
9. Having a good and trustworthy relationship with the children.

Family Law is one of DMF’s areas of expertise.

Online vigilantes beware! ‘Doxing’ can get you in hot water

Exposing someone’s personal information or opinion, even if it is already in the public domain, may be unlawful depending on the means used to obtain it and whether it is shared to incite violence or is malicious.

Publishing private, identifying information on or about an individual, typically with malicious intent, is known as ‘doxing’.

Think about the videos of looters during the riots in Gauteng and KZN that circulated on social media, including information like number plates to help identify them. Was that unlawful? What South African laws can be applied to doxing?

Although there is no one specific law that applies to doxing, there are several national statutes which may be applicable, the most relevant being the Cybercrimes Act 19 of 2020 (Cyber Crimes Act). The Cybercrimes Act makes it an offence to send a data message which incites damage to property or violence, or which threatens persons with damage to property or violence, which is usually a very common end-result of doxing.

Then there’s the Protection of Personal Information Act 4 of 2013 (POPI) which seeks to protect our personal information. Whether POPI applies to an act of doxing, depends on whether the information exposed was publicly available or not, as well as whether the information shared constitutes ‘personal information’ as defined in POPI. POPI is only applicable to information that is NOT publicly available, and if that information constitutes ‘personal information’. Therefore, if your social media accounts are set to public, any information made available on them is open for others to process and expose further.

The definition of ‘personal information’ in POPI includes ‘the personal opinions, views or preferences of the person’, meaning that if you expose someone’s private opinion about someone else on a public platform, you are breaching POPI if you do not have a lawful ground (such as their consent) to do so.

If the doxing involved publishing information which was obtained illegally, for example, by hacking, then RICA (Regulation of Interception of Communications and Provision of Communication-related Information Act 70 of 2002) will be applicable. It is an offence under RICA to dox if the information was accessed and published using illegal means of interception or sourcing.

If doxing involves harassment, this could be an offence under the Protection from Harassment Act 17 of 2011. Where someone is being harassed online by doxers and is fearing for their safety they may obtain a protection order against the doxers.

Criminal law applies where doxing involves intimidation or threats.

Victims of doxing could also claim for defamation of character under the common law if they have suffered losses due to the doxing.

Lastly, a person who is doxing could be in breach of the terms and conditions of the social media platform they are using, and the platform has the right to seek appropriate contractual remedies against them.

Given all of the above, it’s best to stay out of online vendettas and to avoid impulsive reactions on social media and other communication platforms.

9 POINTS TO REMEMBER WHEN BUYING A HOME

Know what you are buying. It’s your right to check the house thoroughly. If you are buying an old house, make sure you can live with any peculiarities, or budget to change these.
Consider the kind of land the home is built on and whether the home has a septic tank or is connected to the municipal sewerage system.
Make provision for all costs, including bond and transfer costs as well as transfer duty.
If you are buying into a Sectional Title Scheme, request the Rules and Financials and check that there are no special levies pending before signing the deal, so there are no nasty surprises.
Check the building plans have been updated and registered.
Check for defects. You are buying the house Voetstoots (i.e. with its defects), so flush toilets, turn on taps, open and close doors.
Request a professional home inspection so you are aware of any issues raised in the inspection report.
Verbal agreements are invalid for the sale of property. Your written agreement is binding once signed by both parties and there is no room for remorse. Don’t sign an agreement until you are happy with it, regardless of how pushy the agent is.
The choice of conveyancer can be negotiated by both parties. Don’t let the Estate Agent pressurize you into using the conveyancer of their choice.

Don’t hesitate to contact our conveyancer and notary Samantha Van Rooyen with any question you may have, big or small.

BE EXTRA VIGILANT

When you receive an e-mail advising you that someone’s bank account details have changed, be on red alert. The onus is on you, the person making the payment, to ensure that you are paying the money into the correct bank account.

Protect yourself and your business from fraud by taking the following steps:
Before making any payments into the account, ALWAYS phone the person and confirm that they have asked you to pay into a different account. It’s worth going a step further by asking them to send you confirmation of the bank account details from the bank.

DROWNING IN DEBT?

The rise of COVID-19 has had a significant impact on economies around the world, and more and more people are finding themselves in debt.
According to a recent survey by information provider TransUnion, eight out of every 10 South Africans say their household income has been negatively impacted by the crisis.

WHAT IS DEBT?
Debt is an obligation that requires one party, the debtor, to pay money or another agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase.

WHAT ARE YOUR OPTIONS IF YOU ARE STRUGGLING WITH DEBT?

THERE ARE THREE MAIN COURSES OF ACTION:

APPLY FOR DEBT REVIEW:
The National Credit Act (NCA) created a process called debt review (or debt counselling) to help over-indebted consumers claw their way out of bondage.

Debt review (or debt counselling) is a legal process every South African can use if you are over-indebted – that is, if you cannot meet all your financial commitments. Through the debt review process, a registered debt counsellor negotiates with your creditors to reduce your monthly repayment commitments, easing your cash flow and giving you some breathing room.

But there are a couple of aspects to bear in mind before signing up for debt review:
• It’s a legal process, that will see you officially placed under debt review.
• You cannot get access to any other credit while you are under debt review.
• Your credit isn’t written off. You simply reduce your payments to help you get back on your feet.
• If you don’t make your new restructured repayments, your creditors can take legal action.

THE NEW DEBT RELIEF BILL
The National Credit Amendment Bill – known informally as the debt relief bill – was signed into law by President Ramaphosa in late 2019. It gives qualifying applicants a two-year window to improve their financial situation. In that time, their debt will be suspended – that is, no payments need to be made to credit providers – and ultimately the entire amounts of outstanding debt could be written off if things don’t improve. However, there are three qualifying requirements as follows:

• You need to be over-indebted;
• Your gross earnings need to be less than R7500 per month for the last six months; and
• Your unsecured debt needs to be less than R50 000.

DEBT CONSOLIDATION
Debt consolidation is a separate process by which all your debts are integrated into a single account with one monthly payment. Therefore, if you have several personal loans, each with their own repayment, you could consider consolidating everything into one loan with one monthly repayment. The idea behind debt consolidation is that you collapse all your loans, with higher interest charges, into one loan, with a lower interest charge – and possibly a longer repayment period.
Should you have any further debt related questions, contact an attorney to seek legal advice.
We at Daly Morris Fuller are happy to assist you with all your debt related queries!

LOOKING TO SUBDIVIDE YOUR AGRICULTURAL LAND?

Know what to do and who to call.

Unlike residential properties, subdivision of agricultural land is strictly regulated owing to the impact it might have on food security and agriculture in general.

It is governed by the Subdivision of Agricultural Land Act 70 of 1970 (the Act) to prevent the turning of agricultural land with huge yields into uneconomic sub-units.

The Act applies in situations where a farmer wishes to subdivide his agricultural farm to bequeath to his children, sell a portion to a third party, or even subdivide to lease over a long period.

Written approval of the Minister of Agriculture, Forestry and Fisheries is required for such subdivision to be lawful, save for exceptions in Section 2 of the Act, where the division is in favour of the State or a statutory body and where it is as per a testator’s disposition who died before the Act was passed.

In seeking approval for subdivision from the Minister, you must engage the services of a surveyor to draw the diagrams for the intended subdivision and submit these with your application.

If you are subdividing the agricultural land to sell a portion, you must get the approval of the Minister before entering into the sale agreement or publicising the sale.

In terms of succession, a person cannot own an undivided share in agricultural land, without the consent of the Minister. Agricultural land can only be registered in the name of one person or entity. This means if you wanted to bequeath a farm to two sons, your options would be to create a Trust where the heirs are beneficiaries, or to a company where the heirs are shareholders or directors.

Another option would be for the heirs to agree on having the farm bequeathed to one of them, in exchange for compensation or benefit.

MARRIAGE CONTRACTS – KNOW WHAT YOU ARE GETTING INTO

There are three different marriage contracts you can enter into:
Community of Property,
Ante-Nuptial Contract – Out of Community of Property – with Accrual,
Ante-Nuptial Contract – Out of Community of Property – without Accrual,

If you marry IN COMMUNITY OF PROPERTY, you and your partner, legally speaking, cease to exist as individuals and for all commercial purposes, are viewed as one. What you both bring into the marriage and all that you acquire during your marriage forms part of a joint estate to which you both have equal, undivided shares.

If the marriage dissolves, the joint estate is divided and shared equally between the two of you. This form of marriage has the advantage that you do not need a notarised and registered contract, saving yourselves legal costs.

However, there are also disadvantages since you relinquish your individual commercial identity.
This means:
you may not contract individually,
you may not purchase property individually
the debts of one become the debts of both, therefore if one is sued, both obtain judgements against their names. If one is sequestrated, both are. If one is placed under debt review or administration, then both are.

If one is considered a credit risk, neither will be able to receive credit.

If you and your partner marry out of community of property, you enter into an ANTE-NUPTIAL CONTRACT, which includes two basic forms of contract: with accrual, or without accrual. In both instances, the one partner is protected in law from the debts of the other and may freely contract without the consent of the other. If one enters into a fiscally risky situation, the risk to your personal assets can be minimised by transferring them into the name of the other.

If you choose this option without the application of accrual, the result will be that everything that belongs to you individually before the marriage and everything you acquire during the marriage will remain the sole property of the individual spouse. This applies to both assets and liabilities.

If you choose this option with the application of accrual, the assets and liabilities that you each bring into the marriage remain yours alone, whereas the assets and liabilities that you acquire during your marriage form part of your joint estate for the purposes of distribution should your marriage dissolve. During your marriage you may still contract individually without the consent of your spouse and the assets acquired by one are protected in law from the liabilities of the other.

This form of contract requires that you declare the value of your respective estates at the beginning of your marriage.

Contact our Notary : Samantha Van Rooyen to assist you today with your marriage contract.

TREAT YOUR WILL AS A LETTER TO YOUR LOVED ONES!

Let DMF write your Will for Free to avoid potential disputes and unhappiness.
This way you decide who inherits your assets and ensure that your family is provided for in terms of your last wishes.

A practising attorney will ensure your Will is valid and complies with all legal requirements. This helps to ensure that your estate is administered promptly and efficiently on your death.

You can also appoint your attorney as the executor responsible for administering your estate according to your Will.

Should you prefer to appoint your spouse, a family member, or a friend as the executor, it is advisable to nominate an attorney as co-executor to deal with any legal issues.

SHINING THE SPOTLIGHT ON DOMESTIC WORKERS

President Cyril Ramaphosa says the government plans to ensure that the average domestic worker salary would be equal to the national minimum wage by next year.
Currently domestic workers earn R19.09 per hour while the national minimum wage was increased from R20.76 to R21.69 per hour for 2021.
If you employ a domestic worker, you are required to enter into a formal contract and to follow the regulations.

What you need to know when hiring a domestic worker?

The law regarding domestic workers is detailed in the Basic Conditions of Employment Act and subsequent amendments. This Act covers any staff that work in your home – including gardeners, cleaners, cooks, nannies and au pairs – whether they are employees or contractors, South Africans or foreign nationals.

According to National Minimum Wage regulations, from 1 March 2021 domestic workers need to earn a minimum of R19.09 an hour, which means a domestic worker who works eight hours a day, five days a week should earn a minimum of R3 054.40 a month.
The minimum wage is reviewed once a year. It’s important to note that the minimum wage should only be used as a starting point for staff with no experience or training.

You are required to provide your employee with a payment slip every month showing hours worked, wage rate, any deductions and overtime pay. The overtime rate for extra hours worked Monday to Saturday must be paid at 1.5 times the normal hourly pay. For hours worked on Sundays and public holidays you are required to pay double the normal hourly pay.

If your domestic worker works more than 27 hours a month for you, you must register as a contributor with UIF and register your domestic worker as your employee. You will receive a contributor number when you register that you must use when you make UIF payments. You can register online at the Department of Employment and Labour. A total of 2% of the employee’s salary must be paid to UIF each month – 1% has to be paid by the employer, and the other 1% may be deducted from the employee’s wages.

The following deductions are permitted but optional:
• Medical insurance, by mutual agreement.
• Savings, pension fund contributions or loans, by mutual agreement.
• Garnishee order / Emoluments Attachment Order deductions, if the employer has been ordered by the courts to deduct money from the employee to pay an outstanding account.

You may NOT deduct the following:
• More than 25% of your employee’s normal earnings.
• Any amount to cover damage or breakages of household items including crockery, appliances, or clothing.
• Meals provided during work times.
• The cost of clothing if they are required to wear a uniform.

Every employee is entitled to annual leave. Full-time employees who work from Monday to Friday are entitled to 21 consecutive days leave, which is 15 working days of paid leave per year (earned at 1.25 days of leave for every month worked). Part-time employees are entitled to one day’s paid leave for every 17 days worked.

Employees are entitled to 30 days (6 weeks) of paid sick leave over three years. If, however, they use these 30 days in one year, any additional sick leave days must be taken as unpaid leave. In the same way, part-time employees are entitled to the number of days they would work in a six-week period, in a three-year cycle. An employee who works one day a week is entitled to six sick leave days in a three-year cycle. An employee may take up to four months of unpaid maternity leave and is not allowed to return to work for a minimum of six weeks after giving birth. As an employer, you are not legally obliged to pay a portion of their salary during maternity leave, but may choose to. The employee can claim from UIF during this period.

An employee may take three paid days per year in the event of the serious illness or death of an immediate relative, such as a spouse, child, parent or sibling. Parents, other than the birth mother, are entitled to 10 consecutive days’ parental leave from the birth or adoption day of their child.

When drawing up the employment contract include all the above so you and your employee can discuss and understand the terms, including the notice period for termination of employment.
Having a signed contract in place will protect both you and your employee in the event of a problem or dispute. Our attorneys are available to assist you with the drafting of an employment contract.

TYING THE KNOT? CONSULT YOUR DMF ATTORNEY TO DRAFT YOUR ANTE-NUPTIAL CONTRACT

As the most important day of your personal life looms, you will be spending most of your days thinking about what you will wear, who will take the photographs and of course the venue itself.
These are all very crucial steps to making your special day exactly how you want it to be. But, what about your ante-nuptial contact? What is that, I hear you say. Well, it is probably the most important document you and your spouse will sign. It is a contract between the two of you that will ensure that during your marriage, neither one of you is responsible for each other’s debts. Your estates will remain separate throughout your marriage and that, in the unlikely event of you getting divorced, this agreement will dictate how your estates are shared at the end of the marriage.

Please ensure that before you tie the knot, you seek expert legal advice on this agreement!

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