Property Specialists

by Vicky | 25, 06, 19 | Uncategorized

Our Property Specialists

Stuart Fourie – Director

Vicky Stott – Director

Marchelle Botha – Associate

Louise Whittal – Associate

Our conveyancing team collectively has more than 40 years’ experience in providing conveyancing services and property-related legal advice.

As property specialists, we assist clients with residential and commercial transfers, developments, sectional title issues, bonds and general conveyancing work such as consolidations and sub-divisions of land. We also assist with the drafting and/or review of sale agreements and advice in respect of any offers received from, or to be made by, a buyer.

Where we are the appointed conveyancers for a matter, some of the other services we offer as part of the conveyancing process are:

• Signing of documents at a convenient location;
• Weekly updates & reports;
• Experienced & qualified professionals;
• Friendly & approachable service.

Conveyancing Costs and Useful Information

The fees charged by conveyancers for transfers of immovable property are based on the recommended fee guidelines issued from time to time. It is important for both seller and buyer to know what costs may be involved so that they can budget accordingly.

Seller’s Costs

In a typical transfer the seller will usually pay the following:

• Costs of cancelling any existing bonds or removing any interdicts over the property
• Bond settlement figures (if applicable)
• Pro-rata share of the rates (& levies if applicable)
• Estate agents’ commission (if applicable)
• Compliance certificates (electrical, gas, electric fence and entomologist) as well as any costs associated with repairs to be effected in order for the certificates to be issued
• Occupational rental (if the seller stays in occupation after registration of transfer)

Occupational Rent

by Vicky | 19, 06, 19 | Uncategorized

Occupational Rent

Once a sale agreement has been signed, the transfer process begins and typically takes 8 to 12 weeks. Ownership of the property concerned will pass to the purchaser on registration of transfer in the Deeds Registry (“Date of Transfer”). In most transfers of immovable property, occupation (the right to occupy the property) passes to the purchaser on the Date of Transfer.

In some cases however, a purchaser may negotiate with the seller to receive occupation of the property prior to the Date of Transfer. Alternatively, the seller may negotiate with the purchaser to remain in occupation of the property for a period after the Date of Transfer.

What is Occupational Rent?

Occupational Rent is the rent payable by the occupying party for the period of their occupation of the property while they are not the owner thereof.

If the sale agreement is silent on the amount of occupational rent to be paid, there is a risk of future conflict as one of the parties may be at a disadvantage when trying to negotiate occupational rent at a later date. We therefore recommend that the occupational rent be negotiated and recorded in the sale agreement before signature, even if the intention at that stage is not for either party to be in occupation of the property, while they are not the owner.

The clause in the sale agreement providing for occupational rent must also clarify who will be responsible for which costs. The municipal rates and taxes for example are usually paid for by the owner of the property and the consumables such as water and electricity are usually for the occupant’s account. Insurance should be paid for by the owner of the property to ensure that the property is insured against damage, usually caused by fires and floods for example.

It is in the best interests of both parties to clearly communicate their respective needs and expectations and to include these in writing when signing the sale agreement. This includes providing for occupational rent.

For advice on how to cover all bases regarding occupation and occupational rent in your sale agreement, please read more information on what conveyancing entails and contact one of our conveyancers today.

Emigration

by Vicky | 06, 06, 19 | Uncategorized

Emigration Considerations

Packing up your entire life, leaving your familiar surroundings and moving to a foreign country is an emotional and stressful life event. If you want to be proactive and avoid some unnecessary costs and nuisances while you are settling into your new home country, we suggest the following emigration considerations:

Immovable Property

If you have not sold your home or if your property has not been transferred to the new owner before you leave South Africa then you should sign a special power of attorney for the sale and transfer of your property before emigration takes place.

If you don’t sign a special power of attorney before you leave, you will have to sign one overseas before a foreign official (such as a Notary Public) and meet further authentication / apostille requirements. You will have the inconvenience of locating the appropriate official and then have to pay in foreign currency for their professional services and courier fees to send the properly executed document to South Africa. You can avoid this burden and expense by signing a properly drafted special power of attorney before you leave.

South African Assets

If you own any assets in South Africa which you are not selling before emigration then we recommend that you:
(a) have an up to date South African will to ensure that your South African estate can be effectively wound up and dealt with separately from your estate in your new home country;
(b) consider signing a general power of attorney authorising a trusted agent in South Africa to attend to any loose ends relating to this property on your behalf and on your instructions.

Trusts / Companies / Close Corporations / Other Organisations

If you are a trustee of a South African trust, director or shareholder of a South African company, member of a South African close corporation or part of any other business or organisation in South Africa then you should consider (and take professional advice concerning) whether it would be prudent in your circumstances to:
(a) resign as trustee / director / member as applicable;
(b) sell your shares / members interest;
(c) make provision for trust / company / close corporation / organisational matters to be attended to by an agent locally or yourself electronically; or
(d) wind up the trust / company / close corporation / organisation before you leave South Africa.

Future money transfers (inheritance, dividends, trust distribution)

If you are the beneficiary of a South African trust, the heir of a South African deceased estate, the shareholder of a South African company or have any other reason to expect monetary payments from South Africa in the future then you should obtain professional advice concerning:
(a) keeping your tax returns up to date;
(b) applying to the South African Revenue Services for an emigration tax clearance; and
(c) applying to the South African Reserve Bank to formally emigrate.

Obtaining advice appropriate to your particular circumstances before you leave South Africa will assist with streamlining the future movement of money from South Africa to you in your new home country.

Should you require advice further, kindly contact us.

Independent Trustees

by Vicky | 30, 05, 19 | Uncategorized

Family Trusts : Independent Trustees

South African legislation does not specifically require the appointment of independent trustees. There is however, a duty on trustees to act in the best interests of the beneficiaries.

The Supreme Court of Appeal, in Land and Agricultural Bank of South Africa v Parker and others 2005 (2 )SA 77 (SCA) found that ‘…the Master should in carrying out his statutory functions ensure that an adequate separation of control from enjoyment is maintained in every trust. This can be achieved by insisting on the appointment of an independent outsider as trustee to every trust in which (a) the trustees are all beneficiaries and (b) the beneficiaries are all related to one another…”

The Chief Master’s Directive 2 of 2017 was subsequently issued providing direction for the appointment of independent trustees for family business trusts.

What is a Business Family Trust?

A “family business trust” can be identified by the following:

• The trustees are all also beneficiaries of the trust;
• The beneficiaries are all related to each other; and
• The trustees have the power to contract with independent third parties thereby creating trust creditors.

The use of the term “family business trust” may be misleading. If your trust meets the above requirements, regardless of whether it is carrying on business formally or not, it will be considered to be a family business trust.

What is an Independent Trustee?

An independent trustee:

• Must not be related/connected to any of the trustees, beneficiaries or founder of the trust, thus ensuring his/her independence.
• Must not be a beneficiary of the trust. This ensures the independent trustee makes objective decisions and ensures proper procedure is followed in terms of the trust deed.
• Must have knowledge and experience in the trust’s field of business in order to avoid dealing in invalid transactions.
• May be, but does not have to be, a professional accountant, admitted attorney, advocate, trust company board of executors or a fiduciary practitioner (FISA member) or business associate with the necessary business knowledge.
• Must not be disqualified from acting as a trustee by the Trust Property Control Act, 1988.
• Must understand the responsibilities and risk for breach of trust.

If the trust deed itself does not make provision for the appointment of an independent trustee, the Master may appoint one. In this event the Master will consult with the founder, existing trustees and beneficiaries with a vested right. The Master is not bound by their recommendations and may appoint a suitable person other than those nominated (this is only done in exceptional circumstances).

The Master has the discretion to allow a family business trust to be registered without appointing an independent trustee in the following circumstances:

• The founder makes representations showing good cause not to appoint an independent trustee;
• The Master has requested that security be provided; or
• An annual audit is conducted and the Master is informed of the results.

What happens when your Independent Trustee resigns?

When an independent trustee resigns, another independent trustee must be appointed, either by nomination in terms of the trust deed, or by appointment by the trustees or by the Master consulting with the parties.

Is an Independent Trustee remunerated?

An independent trustee is entitled, as is any other trustee, to be paid a fee as prescribed in the trust deed or by negotiation among the trustees if the trust deed does not prescribe a fee.  The Master will determine a reasonable fee for the instances where the trustees are unable to agree on a fee, as provided for in Griesel v Bankkorp Trust Bpk 1990 (2) SA 328 (O).

What are the risks of non-compliance?

As this is a recent requirement there are numerous family business trusts that do not have independent trustees. The possible effect of this is that the trust may be deemed to be an “alter ego” of the founder/trustees and therefore invalid. This could lead to additional taxation and will negatively affect the beneficiaries.

In order to avoid complications and expenses down the line, it is prudent for all family business trusts to check their Trust Deed and Letters of Authority and to ensure that an independent trustee has been appointed.

For professional advice and assistance with your trust please contact Stuart Fourie or Vicky Stott.

What is a cession

by Vicky | 16, 05, 19 | Uncategorized

Legalese: Cession

A common clause in an agreement, is one that stipulates that one party’s rights in terms of the agreement may not be ceded without the prior consent of the other party.

What is a cession?

A cession is the transfer of a personal right from one person to another. A common example of a cession is the transfer of a claim against a debtor for payment from one creditor to another.

What are the legal consequences?

1. As personal rights are intangible, the method of transfer and delivery of this right is by way of a cession agreement.

2. The parties to the cession agreement are:

• The Cedent (the original owner of the rights); and
• The Cessionary (the new owner of the rights).

3. If the underlying agreement which gives rise to the rights being ceded requires the original other contracting party’s prior consent to the cession, then the Cedent will need to obtain this first.

4. The validity of a cession depends not only on the cession agreement but also on the underlying claim being ceded.

Our tips

• If you are the Cedent and want to transfer your rights, make sure that the original contracting party is properly informed of the cession. to ensure that performance of their obligation (usually payment of a debt) is to the correct party.
• If you are the Cessionary wanting to take transfer of the rights, investigate the underlying rights/claim properly to ensure that the personal right being ceded is valid and capable of being ceded.
• If you are the other party to the underlying agreement, make sure you know enough about the Cessionary to determine whether you will be adversely affected by the cession. Take legal advice if in doubt.

For more information on this and other legal matters, please feel free to contact us today.