RENTAL RIGHTS DURING THE WATER CRISIS

As a constitutional right, everyone should have access to clean water. Even during a water crisis. In cases where there is a signed agreement between a tenant and landlord pertaining to the supply of water, the obligations stated in the rental agreement should be met by the respective party. Should one of the parties fail to oblige, the agreement may be terminated. Parties to this contract should, however, understand the changes that come with crises.

Common law recognises any crises that could not have been halted or anticipated as “An Act of God”. These are the rights pertaining to rental agreements during a water crisis:

  • Ongoing water supply:

If the municipality reduces water supply, tenant may not cancel lease agreement or claim reduced rental.

  • Services supplied to tenant (swimming pool, sprinklers etc.):

Should day zero come and water supply is cut off, landlords may not continue charging tenants for these services if they are no longer available.

  • Reduced utility charges:

Tenants are within their rights to negotiate that their utilities amount be reduced to account for what the landlord would be paying on their behalf.

  • Municipal bills and fines:

The landlord must pay these to avoid water supply being cut off for the tenant. The landlord may claim that money back from the tenant.

  • Maintenance responsibilities (refilling the pool, watering gardens etc.):

Tenants are exempt from complying with these responsibilities if they contravene with water restrictions.

The water crisis, which has affected mostly the Western Cape, has seen the municipality put restrictions on water usage, cut water supply at certain times of the day, and increase the water rates. Most lease agreements make provision for the responsibility of water usage – the tenant could either be billed monthly, or the rental amount could be water inclusive. If the water bill is the tenant’s responsibility, then they will be liable for the increased water prices. If the rental amount is fixed, any fluctuation in the water bill will be absorbed by the landlord.

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)

THERE IS A WAY TO KEEP THE VIEW

When you purchase a house with a view, you probably think that you are going to enjoy this view every day for the rest of your life. Until you receive a flyer with a picturesque multi-story building guaranteed to block your view. This will definitely result in a few disputes that will leave you wishing you had secured your view.

Right to the view

Just because the property has an unrestricted view, it does not mean that the view is the owner’s. To secure it, a registration of a servitude against the title deeds of the properties in the Deeds Office. This includes the natural growth of trees or plants that will block the view over time.

The registered servitude

The registration of the servitude must be made clear where the intentions of the servitude are established and made clear. This is so that when an issue regarding property views reaches the court, the court would need not be concerned about ambiguity and surrounding circumstances.

Court’s considerations

Before reaching a decision, the court may be mindful of considerations when the servitude is interpreted. The result will try, as far as possible, to alleviate burdens on the servient property owner. Emphasis is placed on views and the purpose of the servitude as to provide unobstructed views as they existed at the time of the creation of the servitude.

A new property owner may have to consider the type of building they are wishing to erect so it does not impose on any restrictions in terms of an agreement made by the “owner” of the view.

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)

WAT IS ’N NOULETTENHEIDSONDERSOEK EN WAT IS DIE DOEL DAARVAN?

Dit is algemeen om die term “noulettenheidsondersoek” of due diligence (“DD”) te hoor tydens gesprekke wat gevoer word oor die moontlike koop, verkoop, samesmelting of amalgamasie van besighede, asook in gevalle waar ’n derde party dit oorweeg om in ’n besigheid te investeer. Ten spyte van die feit dat voornemende kopers, verkopers en/of beleggers bekend is met die konsep en prosedures van DD-prosedures, word die noodsaaklikheid daarvoor in baie gevalle misken weens die finansiële implikasies wat dit inhou.

’n DD kan in kort beskryf word as ’n behoorlike ondersoek na die werking, strukture en historiese maatskappy sekretariële en korporatiewe rekords van ’n besigheid wat normaalweg in opdrag van ’n voornemende koper en/of belegger gedoen word. Die doel hiervan is om die koper en/of belegger in ’n posisie te plaas om ’n ingeligte besluit te neem voordat die besigheid gekoop word of voordat daar in die besigheid gëinvesteer word.

Dit is egter nie altyd moontlik om ’n standaard DD-prosedure te volg nie aangesien elke transaksie se feite en omstandighede verskil. Die proses wat gevolg moet word en komponente van só ’n ondersoek word bepaal volgens die aard en inhoud van elke transaksie, asook volgens die betrokke partye se behoeftes. Dit is egter ook belangrik om te onthou dat ’n DD ’n tydsame proses kan wees en daarom kan kostes maklik oploop, welke aspek ’n bydraende faktor van die partye kan wees wanneer besluit word wat só proses alles moet insluit.

Onderstaande is egter enkele punte wat in meeste gevalle ’n goeie vertrekpunt is wanneer ’n DD-proses van stapel gestuur word, naamlik –

  1. Besigheidstruktuur en korporatiewe beheer
  • In hierdie geval is dit belangrik om te verseker dat die korporatiewe struktuur, korporatiewe rekords en beheer van ’n besigheid in orde en op datum is. Dit kan vasgestel word deur die nodige korporatiewe dokumente en rekords van ’n besigheid na te gaan en indien nodig, die nuutste asook historiese rekords aan te vra by die Kommissie vir Maatskappye en Intellektuele Eiendom (“CIPC”);
  • ’n Verdere aspek is om te verseker dat die bestaande besigheidstruktuur, soos dit deur die verkoper aan die koper en/of belegger bemark was, behoorlik geïmplementeer is en die nodige bepalings van bestaande wetgewing nagekom was.
  1. Finansiële rekords
  • Historiese finansiële syfers en rekords moet nagegaan word om te verseker dat dit ’n korrekte weerspieëling is van die ware finansiële stand van die besigheid.
  1. Belasting
  • Dit is belangrik om te verseker dat alle historiese inkomstebelasting verpligtinge nagegaan word ten einde te bevestig of daar nie enige uitstaande verpligtinge teenoor die Suid Afrikaanse Inkomste Diens (“SAID”) is nie. Daar moet ook verseker word dat alle opgawes behoorlik en tydig ingedien was om te verhoed dat daar op ’n later stadium rentes en boetes gehef word wat tot die nadeel van ’n voornemende koper/belegger kan wees.
  1. Bates
  • Bates is in baie gevalle materieel tot ’n koop/verkoop en/of samesmelting of amalgamasietransaksie en daarom is dit van kardinale belang om die totale waarde van die besigheid se bates en laste vas te stel.
  • Bates kan insluit enige roerende en onroerend bates, asook voorraad, toerusting, intellektuele eiendom ens.
  1. Ooreenkomste
  • Bestaande ooreenkomste, hetsy met verskaffers, kliënte, huur en verhuur, verspreiders van produkte ens. kan in baie gevalle ’n bydraende faktor wees tot ’n voornemende koper en/of belegger se besluit om betrokke te raak by ’n besigheid. Indien dit wel die geval is, is dit belangrik om te verseker dat ooreenkomste van hierdie aard behoorlik saamgestel, uitgevoer en geïmplementeer was deur persone met die nodige kundigheid om die voortbestaan daarvan te verseker.

Bogenoemde is slegs enkele aspekte waaraan oorweging geskenk kan word tydens ’n DD-proses, verdere oorwegings kan insluit, aangaande litigasie, werknemers en bestuur van ’n besigheid, die Nasionale Kredietwet ens.

Dit is egter belangrik om in ag te neem dat wanneer ’n voornemende koper en/of belegger van ’n besigheid die moontlikheid oorweeg om betrokke te raak by ’n besigheid hy/sy daarop geregtig is om ’n DD-prosedure aan te vra. Die doel hiervan is om soveel as moontlik inligting rakende die besigheid in te samel om ingeligte besluite te kan neem. In meeste gevalle sal gevind word dat die voordele wat só ’n proses inhou die koste-implikasie regverdig en om daardie rede word dit kliënte aangemoedig om hierdie as ’n fundamentele aspek van ‘n suksesvolle besigheidstransaksie beskou.

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. (E&OE)

THE RELEVANCE OF CA(SA)’S

The CA(SA) designation has been considered a coveted profession.  Once you have qualified as a CA(SA), you hear of all the opportunities that are available in all kinds of industries all over the globe.

Becoming a CA(SA) is a long and tiresome journey.  Spending years studying every aspect of accounting needing a wheelbarrow to carry all your books, three gruelling years of being stretched to the absolute limit during your articles and two of the toughest exams known to man.  So, after all this work, our qualification is officially on the endangered species list along with lawyers and bankers. How did this happen?

Technology has been the biggest change in our field, with the creator of Bitcoin throwing us a blockchain-shaped loop (refer to the article Cryptocurrency (http://aslblog.asl.co.za/?p=2259) for a brief overview of what blockchain technology is).  Furthermore, IT developments have automated a substantial amount of accounting work, resulting in less audit work required in certain instances, therefore a smaller number of auditors and more IT knowledge being needed to test the systems.  The skillset required to perform audits has therefore adjusted along with technological changes.

Further problems for the CA(SA) designation is the recent ethical violations by SAICA members which have dominated the media and brought the profession into disrepute.

SAICA is currently working on a project to define the competencies that CA(SA)’s will need in the year 2025 in order to adjust the training programme as needed to ensure their members remain relevant.  SAICA is also currently reviewing the organisation and profession by specialist advisors to address any deficiencies in the constitution, governance and structure of SAICA to address the tarnished reputation of the industry.

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 ARE THE LIMITATIONS IN RESPECT OF THE DEDUCTIONS ON MY SALARY?

A client poses a question to their attorney: My employment contract makes provision for deductions from my salary and now my employer wants to deduct money. What are the limitations in respect of deductions that can be made?

As a general point of departure, deductions can only be done once the employee has given written consent to such deductions. However, the employer is also entitled to deduct money when there is a legal obligation to do so, for example, in terms of a collective agreement, legislation, a court order or arbitration award. Deductions of employee’s salaries are regulated by section 34 of the Basic Conditions of Employment Act, 75 of 1997 (“BCEA”).

A typical scenario would be that the employment contract will contain a clause which provides that “the employer has the right to deduct from your remuneration any amounts due by you to the employer”. This amount can include, inter alia, any expenses the company has incurred on behalf of the employee; unauthorised expenses; expenses relating to the employee’s negligence, etc.

The deductions which employers can legally make includes tax deductions, contributions to the Unemployment Insurance Fund (UIF), union membership fees, medical aid, pension or provident fund contributions, any agreements with the employee to pay back debts, deductions in terms of garnishee orders, etc.

Employers acquire written consent for any other form of deductions. If the employment contract does not make provision for a deduction clause, the employer is then required to draft an additional agreement or make an amendment to the employment contract to make provision for such deduction. However, the employee needs to freely and voluntarily sign the said agreement or amendment.

What is significant to note in this regard is that before this deduction may be made, the employer has to comply with the following requirements: the loss or damages caused by the employee must have happened during the course of their employment; the employer must follow a fair procedure and the employee must be given a reasonable opportunity to show why the deduction should not be made; and the total amount of the deduction should not exceed the actual amount of the loss or damages. Therefore, in respect of this last point, it is important that the employer provides actual proof of the loss or damages in order to quantify the amount.

Furthermore, in a scenario where your employment contract contains a clause similar to the aforementioned example, employers tend to feel that these types of clauses give them unrestricted discretion to deduct monies. However, it must be borne in mind that section 34(2)(d) of the BCEA further restricts the amount which the employer may deduct to 25% (one-quarter) of the employee’s salary. Therefore, the employer is not allowed to subtract the full amount of damages/loss suffered from one deduction.

In conclusion, when signing an employment agreement, take note of whether there is a deduction clause contained in the employment agreement. Employers may want to make deductions during the employment, or alternatively once the employment relationship has ended. If your employment contract contains such a clause, it is important to be aware that these deductions can only happen in specific instances, if they are not governed by statutory law, a court order or any other written agreement.

Sources:

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 TERMINATION OF JOINT OWNERSHIP

Nature of joint ownership:

Joint owners own undivided shares in the property which they own jointly. Consequently, the joint owners cannot divide the joint property while the joint ownership remains in existence, and a joint owner also cannot alienate the property or a part thereof without the consent of the other joint owner. The rights in respect of the joint property need to be exercised jointly by the owners thereof.

Ways in which joint ownership can arise:

Joint ownership can come into existence by way of an inheritance in which an indivisible property is left to more than one person in indivisible shares; by way of a marriage in community of property, by the mixture of movable property in such a way that it forms a new movable item or by way of an agreement in terms of which the parties agree to jointly buy a property and that both will have equal indivisible shares in the property.

Division of joint property:

Any joint owner can claim the division of the joint property according to that joint owner’s share in the property.[1] It is a requirement for the division of the joint property that the parties need to try to divide the property among themselves first, before approaching the Court for an action to divide the property, which action is called the actio communi dividendo[2].

The underlying principle of the actio communi dividendo is that no co-owner is normally obliged to remain such against his will. If there is a refusal on the part of one of the co-owners to divide, then the other co-owner can go to Court and ask the Court to order the other to partition. The Court has a wide discretion in making a division of the joint property, which is similar to the discretion which a court has in respect of the mode of distribution of partnership assets among partners.

The Court may award the joint property to one of the owners provided that he/she compensate the other co-owner, or cause the joint property to be put up to auction and the proceeds divided among the co-owners.[3]  Where there is no agreement between the parties as to how the joint assets are to be divided a liquidator is ordinarily appointed, and he can then sell the assets and divide the proceeds, if it is not possible to divide the assets between the parties.[4] If the immediate division of the joint property will be detrimental to the parties, the Court can order in certain cases that the division or the sale of the property be postponed for a period.[5]

It is beneficial that there exist means to divide assets which are jointly owned by parties, who no longer wish to be co-owners, but who cannot reach an agreement on the division of the assets. Without such an action, people might be stuck with a property which they derive no benefit from because it is in the possession of the other co-owner, who refuse to sell the property.

[1] Inleiding tot die sakereg, Van Niekerk & Pienaar, Juta, p 53 – 61.

[2] Robson v Theron 1978 (1) SA 841 (A).

[3] 1978 (1) SA 841 (A).

[4] 1978 (1) SA 841 (A).

[5] Van Niekerk & Pienaar, p 61 – 62.

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)

PAIA: POLITICAL PARTIES MUST DISCLOSE FUNDING

The Western Cape High Court has ruled that political parties must disclose their funding. This has come after public-interest group My Vote Counts sought a declaration that information about the private funding of political parties is reasonably required for the effective exercise of the right to vote in Section 19(3)(a) of the Bill of Rights.

Furthermore, they sought a declaration that the Promotion of Access to Information Act, 2 of 2000 (“PAIA”) is inconsistent with the Constitution and invalid, insofar as it does not allow for the continuous and systematic recordal and disclosure of private funding information of political parties.

The Court ordered the following:

  1. It is declared that information about the private funding of political parties and independent ward candidates (the latter concept as contemplated in section 16 of the Local Government:  Municipal Electoral Act, 27 of 2000) (“independent candidates”)registered for elections for any legislative body established under the Constitution (“private funding information”) is reasonably required for the effective exercise of the right to vote in such elections and to make political choices, in terms of sections 19(1), 19(3), 32 and 7(2) of the Constitution of the Republic of South Africa, Act No 108 of 1996 (“the Constitution”);
  2. It is declared that the Promotion of Access to Information Act, 2 of 2000 (“PAIA”)is inconsistent with the Constitution and invalid insofar as it does not allow for the recordal and disclosure of private funding information;
  3. The declaration of invalidity in paragraph 2 above is suspended for 18 months in order to allow Parliament to remedy the defects in PAIA and to allow for the recordal and disclosure of private funding of political parties and independent candidates;

Reference:

  • My Vote Counts NPC v President of the Republic of South Africa and Others (13372/2016) [2017] ZAWCHC 105 (27 September 2017)

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 BASICS OF ESTATE DUTY

When a person dies, they leave behind an estate which includes everything they own. Estate Duty is payable on the estate of every person who dies and whose nett estate is in excess of R3,5 million. It is charged at the rate of 20%. Currently, SARS is responsible for collecting the Estate Duty of a deceased person.

How does an estate get reported to SARS?

Even if Estate Duty does not apply to you, it is still necessary to inform SARS that the person is deceased. It is recommended that you consult with a legal expert when going through such as process.

Copies of the following documents must be sent to SARS:

  • Death certificate or death notice.
  • Identity document of the deceased.
  • Letters of Executorship (J238) (if applicable).
  • Letter of Authority (J170) (in cases where the estate is less than R250 000).
  • Certified copy of the executor’s identity document.
  • Power of attorney (if applicable).
  • The name, address and contact details of the executor or agent.
  • The last Will and Testament of the deceased.
  • An inventory of the deceased’s assets.
  • The liquidation and distribution accounts (if available).

These documents may be sent to the relevant Centralised Processing Centres that is closest to the Master of the High Court where the estate is being administered.

How does Estate Duty work in relation to an inheritance?

All income received or accrued before the deceased’s death is taxable in the hands of the deceased up until the date of death, and will be administered by the executor or administrator acting as the deceased’s representative taxpayer.

  • After the date of death of a person, a new taxable entity comes into existence – the “estate”.
  • The assets of the deceased will be held by the estate until the liquidation and distribution account has lain for inspection and become final under section 35(12) of the Administration of Estates Act after which the assets will be either handed over to the heirs or delivered to the trustee of a trust estate.

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)

DEMYSTIFYING THE EXECUTOR IN A DECEASED ESTATE

During a person’s lifetime s/he will gather assets, in other words, belongings such as a house or a motor vehicle. These assets and liabilities will form part of a person’s estate. At the death of that person, his/her deceased estate must be administered, in other words, divided, distributed and controlled by someone. This person is called an executor.

However, the role of an estate executor and who can be appointed as one has been largely misunderstood.

What does the executor do?

“Executor” is the legal term for referring to the person, or people, nominated in your will to carry out the directives you set out in your will.

  1. This means that it is the executor’s responsibility to disburse your property to the mentioned beneficiaries in your will, but also obtain information on potential heirs, collecting and arranging payments, and approving or disapproving creditors’ claims.
  2. It is the executor’s duty to calculate and pay the estate tax, and to ensure that the correct documentation is filed with the relevant authorities.
  3. The executor is the individual that represents your estate.

Who can be appointed as the executor?

It has become normal to appoint a friend, family member or beneficiary to act as the executor, as they most likely have intimate knowledge of your estate and your affairs, but also, they will not rack up the fees that a legal body might accrue.

However, there is a misconception that you can avoid the fees by appointing a family member as the estate executor, but this could also mean that you are deferring the cost to the nominated family member.

  1. Family members appointed as executors on larger estates immediately find themselves out of their depth, and not only end up hiring a professional executor, but may also pay more for these services than necessary.
  2. A simple way to address this is by appointing a “professional” executor during your lifetime. This allows you to negotiate the executor fees.

If you appoint a family member, make sure that they understand that they will have to appoint a professional agent, and that they should negotiate the fee and be very cautious of agreeing to a fee arrangement in terms of which the professional agent charges their professional fee, instead of the legislated scale.

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)

AWAITING YOUR DEPOSIT

What to know when your landlord has your deposit and has failed to pay it out

You have viewed the new property and secured it by paying the correct deposit amount to the landlord. With the transition into your new space being as breezy as it was, no red flags were raised as to how your landlord could trick you going forward. How do you approach a situation where your landlord won’t pay you back your deposit after you move out?

Firstly, a pre- and post-occupation inspection of the rental space must be completed before and after the tenant moves in. This inspection is the landlord’s responsibility and if he or she does not conduct the said inspection, they are then unable to claim against the tenant upon the lease expiration. The Rental Housing Act states that the tenant has the right not to have their home or property searched by the landlord, and thus, the landlord must give reasonable notice for inspection 3 days before the lease ends.

Regarding deposits, section 5 of the RHA states that, should there be damages incurred by the tenant under the said lease needing repair after the post-occupation inspection, the landlord must refund the remaining deposit amount, if any, to the tenant within 14 days. In the case where no claims for damages have been made by the landlord, and the tenant is debt free in terms of charges and rent, the deposit must be refunded within seven days following the lease expiration. A tenant who refuses to take part in the inspection process, and damages have been found, is liable to receive their remaining deposit 21 days from the expiration of the lease.

If a landlord refuses or has failed to refund the tenant their deposit, the tenant may approach the Rental Housing Tribunal.

References

  • Rental Housing Act No. 50 of 1999. (2017). [PDF] Cape Town: Republic of South Africa, pp.6-7. Available at: https://www.gov.za/sites/www.gov.za/files/a50-99.pdf [Accessed 20 Nov. 2017].

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)