Category Archives: Property

New owner not responsible for previous owner’s debt

The Application of Section 118(3) of the Municipal Systems Act by the municipalities had the implication that in some cases new owners had their electricity cut off, or have been unable to open a municipal account, because they have been held responsible for debts, sometimes adding up to hundreds of thousands of rands incurred by a previous or multiple previous owners.

Section 118(3) states that “An amount due for municipal service fees, surcharges on fees, property rates and other municipal taxes, levies and duties is a charge upon the property in connection with which the amount is owing and enjoys preference over any mortgage bond registered against the property”. Section 118(3) creates a charge over the property in favour of the municipality.

The days of uncertainty concerning the inheritance of historical debt from previous owners and the worry of municipal services being suspended are over following the Constitutional Court Judgement delivered on 29 August 2017 in Chantelle Jordaan and Others v City of Tshwane Metropolitan Municipality and Others.

In order to avoid unjustified arbitrariness in violation of Section 25(1) of the Bill of Rights which prohibits arbitrary deprivation of property which would happen if debts without historical limit are imposed on a new owner of municipal property, the Court held in an unanimous judgement that section 118(3) must be interpreted so that the charge it imposes does not survive transfer to a new owner.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein.  Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

What does the Deeds Office do?

The Deeds Office is responsible for the registration, management and maintenance of the property registry of South Africa. If you are planning on buying a house, it can be useful knowing about the Deeds Office. However, you would use the services of a conveyancer when buying or selling a house. It is recommended that the services of a competent conveyancing firm is utilised in order to minimise the pitfalls that can be associated with property transactions.

What is conveyancing?

Conveyancing is the legal term for the process whereby a person, company, close corporation or trust becomes the registered and legal owner of immovable property and ensures that this ownership cannot be challenged. It also covers the process of the registration of mortgages.

Steps taken by the conveyancer:

  1. The conveyancer lodges your title deed and other documents in the Deeds Office for registration. These documents will be individually captured on the system. If there is a bond, the conveyancer dealing with the bond will lodge the bond documents with the Deeds Office at the same time as the transfer documents. The transfer, bond and cancellation documents must be lodged in the Deeds Office at the same time to ensure simultaneous registration. If different conveyancers are dealing with registering the purchaser’s bond and cancelling the seller’s bond, then they will need to collaborate.
  1. The Deeds Office examiners go through the documentation that has been submitted, and make sure that it complies with the relevant laws and legislations.
  1. The examiners then inform the conveyancer that the deeds are ready to be registered.
  1. Registration takes place with the conveyancer and Registrar of Deeds present. The transfer of the property is then registered in the purchaser’s name. If there is a bond, it is registered at the same time.
  1. Upon registration, the purchaser becomes the lawful owner of the property. The title deed that reflects this ownership is given to the conveyancer by the deeds office after the registration. Unless a bond has been registered as well, in which case the title deed is given to the bond holder.

The time taken to register a property at the Deeds Office depends on various factors and a number of parties. On average, registering a property transfer takes six to eight weeks, although unforeseen difficulties can cause the period to be extended.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Renting or selling property to foreigners

Renting property in South Africa is a straightforward process. The country has a vast selection of rental accommodation including bachelor flats in apartment blocks, Victorian cottages, stand-alone houses with big gardens, and semi-detached units in modern townhouse complexes.

In South Africa, the right of a foreigner to purchase immovable property was restricted in the past by the Aliens Control Act. These restrictions were uplifted in 2003 by the new Immigration Act (“the Act”) which repealed the Aliens Control Act and many of its restrictive provisions and now clearly defines who a legal foreigner is and who is not. In short, a legal foreigner is a person in possession of a valid temporary residence permit or a permanent residence permit approved by the Department of Home Affairs.

The new Act makes provision for various temporary residence permits to be issued to foreigners, including amongst others:

  • A visitor’s permit
  • A work and entrepreneurial permit
  • A retired person permit

In principle, a landlord or tenant can legitimately lease or sell immovable property to any person recognised under the Act as a legal foreigner.

That said, foreigners working in South Africa with a legal work permit, are not regarded as “non-residents” by the South African Reserve Bank. They are considered to be residents for the duration of the period of their work permit and are therefore not restricted to a loan of only 50% of the purchase price.

It is also important to take note that the Act criminalizes the letting or selling of immovable property to an illegal foreigner by making this transaction equivalent to the aiding and abetting of an illegal foreigner and is such an act classified as a criminal offence in terms of the Act.

In conclusion, a legal foreigner may let or buy immovable property in South Africa, provided that he is the holder of either a legal temporary residence permit or a permanent residence permit approved by the Department of Home Affairs. Ensure that you enquire from your potential tenant or purchaser whether they are legally present in South Africa and obtain the necessary proof from them before entering into any transaction with a foreigner. Also, take account of the restrictions on local financing, particularly where the procurement of financing is a condition precedent to the agreement.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Owning property without a will

If you die without a will, an administrator will have to be appointed to administer your estate which will be distributed according to the laws of intestate succession. As such, your assets may not be distributed as you would have wished. It also means that the process will be delayed and that there will be additional expense and frustration which most people would not want to inflict on their loved ones during a time of loss.

Marriage and property

When drafting your will, it’s important to consider the nature of your relationship with your ‘significant other’. If you are married in community of property, you only own half of all assets registered in your name and that of your spouse. Your spouse therefore still remains a one half share owner of any fixed property you may want to bequeath to a third party which could potentially present difficulties.

If you are married in terms of the accrual regime, the calculation to determine which spouse has a claim against the other to equalise the growth of the respective estates only occurs at death. Your spouse may therefore have a substantial claim against your estate necessitating the sale of assets you had not intended to be sold.

Alongside your will, you should also prepare the following in relation to any immovable property you may own:

  1. State where your title deeds are kept and record any outstanding bonds and all insurance
  1. File up-to-date rates and taxes receipts
  1. Record details of the leases on any property you have
  1. State who collects your rent
  1. State who compiles your yearly accounts
  1. State where your water, lights and refuse deposit receipts are kept

If you die without a will

According to the according to Intestate Succession Act, 1987, your estate will be distributed as follows:

  1. Only spouse survives: Entire estate goes to spouse.
  1. Only descendants survive: Estate is divided between descendants.
  1. Spouse & descendants survive: The spouse gets R250 000 or a child’s share and the balance is divided equally between the spouse and descendants.
  1. Both parents survive: Total share is divided equally between both parents.
  1. One parent: Total Estate goes to the parent.
  1. One parent & descendants: Half the Estate goes to the parent; balance is divided equally amongst descendants.
  1. No spouse; No descendants; No parents; but descendants through mother & descendants through father: Estate divided into two parts: half to descendants through mother; half to descendants through father.
  1. No spouse; No descendants; No parents; No descendants through mother or father: Full Proceeds of the Estate has to be paid into the Guardians Fund in the event of no descendants whatsoever.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Important steps for the transfer of property

The transfer process can take up to three months, sometimes longer. There are different steps involved in the transfer of a property, these include:

1. Instruction.

A conveyancer receives the instruction to transfer the property.

  1. Communication.

The conveyancer communicates with the various role-players involved in the transfer process, such as the seller, purchaser, transfer and bond attorneys, municipality, bank, South African Revenue Service (SARS).

  1. Collection.

Certain information and documents are required, such as the agreement of sale, deeds office search, existing deed, bond cancellation figures from the bank and so on. The conveyancer should continuously report to the various role-players about the progress being made.

  1. Drafting and signing.

As soon as all the information and documents have been collected, the conveyancer will draft the transfer documents and request the seller and purchaser to sign them. These transfer documents will include a power of attorney and various affidavits.

  1. Finances.

Financial arrangements include requesting an advance payment for the conveyancer’s interim account for certain expenses, requesting the bank guarantee, collecting the purchase price or deposit and so on.

  1. Transfer duty.

Obtaining a transfer duty receipt from SARS, confirming that the tax relating to the transfer of the property has been paid by the purchaser.

  1. Clearance certificate.

Obtaining a clearance certificate from the municipality, confirming that all amounts in respect of property have been paid for the last two years.

  1. Prep.

The conveyancer prepares for lodgement (submission) of the deed of transfer and other documents necessary for registration at the deeds office.

  1. Registration.

Once the deed of transfer and other documents have been lodged it, takes the deeds office about 7 – 10 working days to examine these documents. If the deeds office is satisfied that the requirement for the transfer of property has been met, the deed of property is registered. The conveyancer will notify the various role-players of the registration.

  1. Accounts.

Once registered, the conveyancer makes the necessary calculations and payments relating to the sale, for example, the estate agent’s commission, purchase price and so on. The conveyancer’s final account is also drawn up and sent to the purchaser and the seller for payment.

Having an experienced and expert conveyancer is extremely important to ensure that the transfer of property takes place quickly and efficiently.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

The 2016 Budget Speech influences your Estate

DVDB_Blog-Budget2016The purpose of this communication is to inform clients of certain tax increases and proposals that will have an effect on Estate and Financial Planning. Only those changes and proposals directly affecting Estate Planning will be dealt with.

1. Capital Gains Tax

The inclusion rates has been increased substantially.

  1. 1 Individuals/Special Trusts:
    ° Inclusion rate:
    • 40% (currently 33.3%)

    ° Maximum effective rate:
    • 16.4% (currently 13.65%)
  1. 2 Companies:
    ° Inclusion rate:
    • 
    80% (currently 66.5%)

    ° Effective rate:
    • 22.4% (currently 18.6%)
  1. 3 Trusts:
    ° Inclusion rate:
    • 80% (currently 66.5%)

    ° Effective rate:
    • 32.8% (previously 27.3%)
  1. 4 Annual exclusion and exclusion on death:
    ° Annual exclusion:
    • R 40 000 (currently R 30 000)

    ° Exclusion in year of death:
    • R 300 000 (no increase)

Effective for years of assesment commencing on or after 1 MARCH 2016.

2. Transfer Duty 

On transfers of property valued above R10 000 000 (ten million rand) Transfer Duty will amount to R937 500 plus 13% of the value above R10 000 000 (ten million rand).

Below R10 000 000 (ten million rand) the rates remain the same.

Effective for property acquired on or after 1 MARCH 2016.

3. Estate Duty

No amendments to the rate or the basic deduction at this point in time.

4. Donations Tax

No amendments.

5. Measures to prevent tax avoidance through trusts.

It was stated that some taxpayers use trusts to avoid paying Estate Duty and Donations Tax by selling assets to the trust and leaving the purchase price on interest free loan:

“to limit taxpayers’ ability to transfer wealth without being taxed government proposes to ensure that the assets transferred through a loan to a trust are included in the estate of the founder (we assume that it refers to the lender or donor) at death and to categorise interest free loans to trusts as donations.

Further measures to limit the use of discretionary trusts for income splitting and other tax benefits will also be considered.”

6. Davis Tax Committee (DTC)

In a Webinar presented by Judge Dennis Davis in November 2015 he indicated that the DTC will most probably not alter the conduit principle with regard to trusts and will consider legislation to ensure that the use of interest free loans in financing trusts will result in the assets acquired through such interest free loans to be included in the estate of the person who made the loan to the trust.

Reference was also made to the possibility of a higher basic rebate. A figure of R15 000 000 was mentioned.

Judge Davis also indicated that they will not proceed with the recommendation to tax all distributions from off-shore trusts as income but will effect the necessary amendments to Paragraph 80 of the Act with a view to address the problem.

The possibity of a staggered rate of Estate Duty was also mentioned.

7. Comments

Capital Gains Tax

While we expected a hike in the inclusion rate for Capital Gains Tax, the percentage was higher than expected. Capital Gains Tax on death combined with Estate Duty can result in an effective tax rate on death, (on an asset that is subject to Capital Gains Tax and Estate Duty), of more than 32%!

The hike in the inclusion rate will also increase the costs of transferring assets in the process of Estate Planning.

Estate Duty

We are still awaiting the second report of the DTC in this regard and will comment as soon as it becomes available.

Trusts

The wording of the paragraph quoted above is, to say the least, vague and perplexing. Various questions immediately arise.

To name but a few:

  • Will the legislation be applicable only to transfers after date of promulgation? If not, it will amount to retroactive legislation.
  • The paragraph only refers to interest free loans, what about loans at a lower interest rate?
  • Would it be adequate for the taxpayer to start charging interest on a loan that was interest free?
  • What is meant by “to categorise interest free loans to trusts as donations”?
  • How will the value of the donation be calculated – with reference to the interest free part only or with reference to the capital of the loan as well? Surely the intention is not to tax both the loan and the assets acquired by the trust through the loan. That will amount to double taxation!
  • What about an interest free loan to a company of which the shares are held by a trust?

We will have to await legislation in this regard in order to understand the effect thereof on Estate Planning.

You will be kept up to date on developments in this regard.

We do not think that this will mean the end of the trust as we know it, but one must take cognisance of the developments and try to plan accordingly.

Exciting challenges lie ahead for the estate owner and his/her adivisors!

GPJ van den Berg
DIRECTOR – Estate & Trust Services (Pty) Ltd
gert@delberg.co.za
T: +27 (12) 361 5001
F: +27 (12) 361 6311

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Verkopers se beskerming beperk onder voetstoots klousule

Delport_marchVerkopers se beskerming onder die voetstootsklousule in ‘n koopkontrak vir die verkoop van onroerende eiendom, is dalk nie so “absoluut” soos sommige mense dink nie. Dit bly steeds die verkopers se plig om alle latente (verborge) gebreke in die eiendom aan voornemende kopers uit te wys. Verkopers se versuim om hieraan gehoor te gee, kan hulle duur te staan kom, soos in die onlangse saak Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 Maart 2013) wat in die Appèlhof beslis is.

‘n Latente gebrek is byvoorbeeld ‘n lekkende dak of ‘n warmwatersilinder wat probleme veroorsaak, m.a.w. enige fout wat nie met die blote oog gesien kan word nie. Voornemende kopers sal byvoorbeeld nie gedurende die ‘droë’ maande watermerke op ‘n plafon kan sien as bewys van ‘n lekkende dak nie.

In die bogemelde saak het die verkopers nagelaat om die kopers in te lig oor die werklike skade wat aan hulle woning se grasdak aangerig is. Die verkopers het herstelwerk aangebring nadat hul bewus geword het van die lekkende dak. By verdere ondersoek deur kenners is egter vasgestel dat die oorsaak van die lekkasies tweevoudig was. Eerstens was die houtpale wat die grasdak ondersteun het onvoldoende om die gewig van die dak te dra en het dit veroorsaak dat die dak stelselmatig inmekaarsak. Tweedens was die betrokke woning se dakhelling slegs 35 grade, wat veroorsaak het dat reënwater in die dak insyfer en die dak dus gouer laat verrot het.  Die kenners het getuig dat die helling van ‘n grasdak minstens 45 grade moet wees vir water om van die dak af te kan vloei. Die aanvanklike herstelwerk was dus nie voldoende om die lekkasie te verhoed nie. Die kopers het eers ná registrasie van die eiendom op hul naam agter die kap van die byl gekom en die verkopers moes opdok om die dak te herbou, aangesien die probleem nie permanent opgelos kon word deur slegs herstelwerk aan te bring nie. Alhoewel die verkopers nie van die groter probleem (die onvoldoende helling van die dak) bewus was nie, is hulle steeds aanspreeklik gehou aangesien hulle bewus was van die feit dat die herstelwerk nie die probleem permanent sou oplos nie.

Patente gebreke, aan die ander kant, bly steeds die koper se verantwoordelikheid.  Voornemende kopers kan dus nie terugsit en aanvaar dat, indien gebreke na okkupasie van die eiendom opduik, die verkopers aanspreeklik gehou sal word nie. Patente gebreke word gedefinieer as gebreke wat sigbaar is tydens ‘n gewone ondersoek.* ‘n Voorbeeld van ‘n patente gebrek is krake in ‘n muur. Dit is voornemende kopers se plig om verkopers uit te vra oor die stand van sake en waarborge van die verkopers oor gebreke in die eiendom op skrif te kry.

Daar rus dus ‘n wedersydse verantwoordelikheid op kopers en verkopers rakende gebreke in ‘n eiendom. Verkopers moet eerlik wees oor enige latente gebreke en kopers moet, wanneer hulle ‘n potensiële woning besigtig, uitkyk vir patente gebreke. Dit is egter wys uit ‘n verkoper se oogpunt om eerder oor ‘n verminderde koopprys met kopers te onderhandel weens gebreke in die eiendom, as om moontlik ná registrasie van die eiendom deur die kopers aanspreeklik gehou te word vir herstelwerk wat groot finansiële implikasies kan hê.

Verwysings:
Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 Maart 2013)
*Dictionary of Legal Words and Phrases, 2nd edition, Claassen

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

Seller’s protection under voetstoots clause limited

Delport_marchA seller’s protection under the “voetstoots” clause in a deed of sale for immovable property is not as “absolute” as some might think. It is still the seller’s duty to inform prospective purchasers about all latent (hidden) defects in a property. A seller’s failure to do so could cost the seller in the long run, as per a recent ruling by the Supreme Court of Appeal in Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 March 2013).

Examples of latent defects are a leaking roof or a faulty geyser. It basically includes any defects that cannot be seen with the naked eye. Prospective purchasers will, for example, not see water marks on a ceiling resulting from a leaking roof in the “dry” months.

In the abovementioned case the sellers failed to inform the purchasers about the true extent of the damage to the property’s roof. The sellers were aware of the fact that the roof leaked and had some repairs done to it to try and fix the problem. On closer inspection by specialists it was found that the cause of the leaks were twofold. Firstly, the wooden roof poles were inadequate to properly support the weight of the thatch roof and resulted in the gradual sagging of the roof. Secondly, the pitch of the property’s thatch roof was only 35 degrees and not 45 degrees as it should be, which would have at least ensured that rain water would run off the roof. The specialists testified that due to the pitch of the roof being 35 degrees, water ran into the roof and caused the thatch to rot more quickly. It was found that the initial repairs were therefore not sufficient to stop the roof from leaking in future. The purchasers only discovered this after registration of the property and the sellers had to fork out to replace the roof, as the problem could not be permanently solved by doing repairs to it. Even though the sellers were not aware of the bigger problem, namely the incorrect pitch of the roof, they were still held liable because they were aware that the repairs which they had done were not adequate.

On the other hand, patent defects are still the purchaser’s responsibility. Prospective purchasers cannot sit back and think that if any problems occur after occupation, the sellers will be held liable. A patent defect is defined as “one which will be apparent on an ordinary inspection”*. An example of a patent defect will be a crack in a wall which shows through the paint. It is a prospective purchaser’s duty to ask the sellers about such defects and get all guarantees from the sellers in writing.

It is clear that a mutual responsibility rests on sellers and purchasers regarding defects in a property. Sellers should be honest regarding latent defects and purchasers should be vigilant, when viewing a property, for any patent defects. It will be wise for sellers to rather negotiate a lower purchase price due to defects in a property, and to disclose them to the purchaser.  Failing to be honest with the purchaser could have huge financial implications for the seller after registration of the property.

References:
Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 Maart 2013)
*Dictionary of Legal Words and Phrases, 2nd edition, Claassen

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

Geskille met jou regspersoon: Eienaars se remedies

Delport_feb-blOns kantoor het onlangs ‘n aangeleentheid hanteer waarin die trustees van die regspersoon van ‘n sekere deeltitelskema ‘n wiel van die motor van een van die huiseienaars geklamp het (“wheel clamp”), omdat hy nie op sy toegekende parkeerplek geparkeer het nie.

Alhoewel die huiseienaar nie op sy toegekende parkeerplek geparkeer het nie, kon hy nie verstaan ​​waarom sy voertuig se wiel geklamp kon word vir parkering voor sy eie voorstoep terwyl hy in die loop van die dag in en uit die huis beweeg het nie, en was hy van mening dat dit hoogs onregverdige en onredelike optrede deur die trustees van die regspersoon was.

Dit is ‘n bekende feit dat elke huiseienaar in ‘n deeltitelskema nie net kan doen wat hy wil nie, want dit sou tot totale wanorde in die deeltitelskema lei. Dit is die plig van die trustees van die regspersoon om die reëls op alle eienaars en huurders af te dwing. Wanneer ‘n persoon ‘n eiendom in ‘n deeltitelskema koop, sal daar waarskynlik altyd ‘n bepaling in die ooreenkoms wees wat sê dat die huiseienaar, onder andere, die reëls van die regspersoon moet nakom.

Die vraag ontstaan egter of die huiseienaar se hande afgekap is indien die reëls van die deeltitelskema op ‘n algemene vergadering deur die trustees van die regspersoon gewysig is en die huiseienaar nie die reëls nakom nie.

Remedies beskikbaar vir huiseienaars en huurders

Indien daar rede is om te glo dat die trustees van die regspersoon van ‘n deeltitelskema ultra vires (buite hul magte) opgetree het, het huiseienaars twee remedies wat beskikbaar is, naamlik  arbitrasie of ‘n interdik.

1.         Arbitrasie stap-vir-stap

Die ontevrede huiseienaar kan aansoek doen vir arbitrasie, ‘n prosedure wat nie meer as ‘n maksimum van 52 dae moet duur nie.

Kragtens Artikel 71 van Aanhangsel 8 in die Wet op Deeltitels 95 van 1986 is die doel van arbitrasie nie, soos sommige glo, om nakoming van die reëls te bewerkstellig nie. Die voorgeskrewe prosedure vereis dat die ontevrede huiseienaar sy geskil skriftelik moet voorlê aan die trustees van die regspersoon van die deeltitelskema binne 14 dae vanaf die ontstaan van die probleem, waarna die trustees die geskil sal ondersoek en probeer om dit op te los. Indien die geskil nie opgelos kan word nie, kan óf  die huiseienaar óf die trustees van die regspersoon versoek dat die aangeleentheid vir arbitrasie verwys word.

Die arbiter het  wye diskresie in die maak van ‘n kostebevel. Die arbiter mag betaling deur die een party, meer as een party gesamentlik, of in ‘n spesifieke verhouding gelas, afhangende van die uitslag van die arbitrasie. Die arbiter se beslissing kan ook  ‘n bevel van die Hooggeregshof gemaak word op aansoek deur enige party of deur ‘n party wat geraak word deur die arbitrasie.

2.         Alternatiewe remedie

Daar is ‘n verdere remedie beskikbaar vir die huiseienaar, naamlik ‘n interdik of enige vorm van dringende of ander regshulp by ‘n hof met jurisdiksie.

Hou egter die volgende waarskuwing in gedagte:

Furthermore, the interdependence of the owners and occupants of units and the unavoidable requisite of harmonious co-existence render an interdict inadequate and indeed improper in the sectional title context. A successful application for an interdict can permanently ruin the harmony of a scheme’ (LAWSA aw para 238).

In wese kan jy die stappe soos hierbo uiteengesit volg vir verligting indien die reëls van jou deeltitelskema toelaat dat die trustees van die regspersoon jou motor se wiel mag klamp indien jy nie die reëls gehoorsaam nie, en jy rede het om te glo dat die regspersoon buite sy magte optree of dat die reëls onredelik is.

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

Disputes with Body Corporate: Homeowners’ remedies

Delport_feb-blOur office recently dealt with a matter where the trustees of the body corporate of a certain sectional title scheme clamped the wheel of the car of one of its homeowners because he did not park on his allocated parking bay.

Even though the homeowner did not park on his allocated parking bay, he could not understand why his vehicle got clamped for parking outside of his own front porch, when he was in and out of the house during the day. It seemed highly unfair and unreasonable to the homeowner.

It is a truism that every homeowner cannot do as he pleases as this would lead to total disorder in the sectional title scheme, and it is the duty of the trustees of the body corporate to enforce rules on owners and tenants alike. When one buys a property in a sectional title scheme one will more often than not find a provision in the agreement which states that homeowners, inter alia, will abide by the rules of the body corporate.

This begs the question whether or not the homeowner’s hands are tied if the rules were amended by a special decision taken at a general meeting by the trustees of the body corporate.

Remedies available to homeowners and tenants

If there is reason to believe that the trustees of the body corporate of a sectional title scheme have acted ultra vires (outside their powers), homeowners have a choice of two remedies –  either arbitration or an interdict.

1.         Arbitration step-by-step

The discontented homeowner could apply for arbitration, the duration of which should not exceed a maximum of 52 days.

In terms of Section 71 of Annexure 8 of the Sectional Title Act 95 of 1986, the purpose of arbitration is not, as some believe, to achieve compliance. The prescribed process requires the discontented homeowner to submit his dispute in writing to the trustees of the body corporate of the sectional title scheme within 14 days of the problem arising, whereafter the trustees will review and attempt to settle the matter. Should the problem still not be resolved, either the homeowner or the trustees of the body corporate can request that the matter be referred for arbitration.

The arbitrator has wide discretion in making a costs award. He may order payment by one party, by more than one jointly, or in specific proportions, depending on the outcome of the arbitration. The arbitrator’s decision may be made an order of the High Court upon application by either party, or a party affected by the arbitration.

2.         Alternative remedy

There is a further remedy available to the homeowner, namely an interdict or any form of urgent or other relief by a court with jurisdiction.

But this line of action has elicited the following warning:

Furthermore, the interdependence of the owners and occupants of units and the unavoidable requisite of harmonious co-existence render an interdict inadequate and indeed improper in the sectional title context. A successful application for an interdict can permanently ruin the harmony of a scheme (LAWSA aw para 238).

In essence, if the rules of your body corporate allow the trustees to clamp your wheel should you disobey the rules, and you have reason to believe that your Body Corporate is acting outside of its powers and/or the rules are unreasonable, you may follow the steps as set out above.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.