Category Archives: Property Law

MY IDEA EQUALS MY PROPERTY

B1When you think of something original and make a product based on that idea, such as a song, then you essentially have a claim to that product as if it were your own property. Intellectual property (IP) refers to something that is a product of someone’s mind. According to the law people have the right to own their own creations. This includes ideas, inventions, written works, computer programs and the names and logos of companies or consumer items.  IP rights are important as it protects people’s creations and motivates people, companies and industries to be more innovative with their ideas. Transgressing a person’s IP rights can have serious consequences. In the case of Vodacom’s ‘Please Call Me’ service, for example, a share of billions of Rands had to be paid out to the man who came up with the original idea, Kenneth Nkosana Makate.

What types of IP rights are there?

There are four types of IP in South Africa. They include trademarks, copyright, patents and designs.

  1. Patents protect inventions.
  2. Trade marks protect a unique name or symbol that is used to identify a business or product.
  3. Copyright protects the original works of authors, composers, artists, musicians, film-makers and software developers.
  4. Designs can be registered to protect the visual and aesthetic appearance of a product or a functional aspect of a product, such as a kitchen appliance.

The value of having IP rights

Having IP rights have many benefits for a company or individual who has created something. It’s firstly a great reward for the creator behind the product because it means others can’t profit from their ideas without their consent. It also protects their ideas and creations from being stolen or reproduced by someone else. This encourages innovation because people or companies would have to come up with their own ideas instead of stealing other people’s ideas. One of the biggest benefits is that the owner of the IP rights can make a lot of money if his/her product is extremely valuable or popular. An author of a book, for example, can make a good amount of money if their book is popular and could go on to write more books under the same title.

Vodacom and Mr Makate

In April 2016, the Constitutional Court ruled that Vodacom must compensate inventor of the ‘Please Call Me’ SMS product, Kenneth Nkosana Makate. Makate came up with the idea of the ‘Please Call Me’ after he wanted an easier way of communicating with his then girlfriend and now wife. After conceiving the idea in 2000, Makate approached Vodacom’s then director and head of product development, Philip Geissler. Geissler and Makate made an oral agreement that the product would be tried out and, if commercially viable, a share of the proceeds would be paid to Makate. Since the ‘Please Call Me’ product was introduced in 2001, it has made billions in revenue for Vodacom. However, Makate was never paid a share of the profit as promised and brought the case to a court in 2008. The Constitutional Court’s decision means that Makate will see a share of the billions of Rands Vodacom made from his initial idea. The court ruling shows that a person’s idea is not something that others can casually steal and profit from.

IP Limitations

Having exclusive rights to a product or creation doesn’t necessarily last forever. This differs for the type of IP rights you have. A patent lasts for 20 years, but designs only last for between 10 or 15 years. Copyright is simpler and lasts for as long as 50 years after the death of the author. So someone who holds copyright over a piece of original work, such as a novel, keeps it with no renewal fees. Trade marks can remain indefinitely, as long as renewal fees are paid every decade.

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)

WHY IS MY PROPERTY TRANSFER TAKING SO LONG?

A1After signing a deed of sale, the purchasers often want to move into the property as soon as possible.  When they are informed of the process involved prior to the property being transferred this may damper their excitement. There may also be delays in the transaction.   In order to avoid unnecessary frustration, it is vital that parties to the transaction understand the processes involved and that delays are sometimes inevitable.

The deed of sale will normally be the starting point in a transaction for a conveyancer who has been instructed to attend to the transfer.  This conveyancer is also known as the transferring attorney and is normally the main link between the other attorneys involved the transfer transaction.

Postponements, delays and interruptions

  1. A major role of the conveyancer is informing any mortgagees, for example banks, about the transfer so that any notice periods for the cancellation of bonds can start running. The notice period is usually up to 90 days. The transfer may be delayed as a result of this notice period.
  1. Obtaining the various certificates, receipts and consents applicable to the transaction in question also takes time. Examples of these is the rate clearance certificate, transfer duty receipt, homeowners’ association’s consent to the transfer, levy clearance certificate, electrical compliance certificate and plumbing certificate. The time it takes to obtain these certificates will differ from case to case. After an inspection by a plumber or electrician, for example, it may be found that certain work needs to be carried out before the certificates will be issued.
  1. Once all the documents are lodged at the Deeds Office by the conveyancer, an internal process is followed, which has different time frames in the various Deeds Offices. This time frame can also vary in a particular Deeds Office. It is best to enquire from your conveyancer what the Deeds Office time frame is at any given stage.

There are many ways in which the transfer process could be delayed, these are just some of the examples. If you feel that the process is taking too long, then you should contact your conveyancer.

Reference:

  • Aktebesorging, UNISA 2004, Department Private Law, Ramwell, Brink & West

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. (E&OE)

CAN MY PROPERTY BE USED FOR AIRBNB?

A1When deciding whether to become an Airbnb host, it’s important for you to understand how the laws work in your city.

According to Brett Herron, the mayoral committee member for transport and urban development at the City of Cape Town, different holiday accommodation land use types, such as B&Bs and guest houses, are regulated by the City’s zoning scheme, called the Development Management Scheme.

If referring to Cape Town, for instance, the city has a Guest Accommodation Policy that sets out the guidelines that have to be considered when applications are made to obtain the necessary planning permissions. According to the Policy, if you wanted to provide a self-catering, flexible accommodation option in line with current trends for transient guests, visitors and tourists, then these are the guidelines that should be followed:

Purpose

  • A building or group of buildings consisting of separate accommodation units rented for residential purposes, each incorporating a kitchenette / full kitchen, but may also include an option of meals being provided communally to guests.
  • May include communal areas for the exclusive use by lodgers / transient guests.

 Scale

  • Form and scale of development determined by development parameters of particular zone (i.e. floor space, building lines, height) and the site context.
  • No general restriction on number of units, but must be locally appropriate in context of the building/site characteristics and surrounding area.
  • Council may determine / restrict the number of units per development in cases and lay down conditions necessary to mitigate the impact thereof.

 Location

  • Not supported on a single residential zoned property, subject site must have suitable general residential, mixed use or commercial zoning.
  • Locational criteria that should be considered, include:
    • proximity to public transport routes, commercial centres and tourist activities.
    • character of the surrounding area;
    • mixed use or commercial locations (including areas designated for high density development) are encouraged.

Conclusion

In many cities, you must register, get a permit, or obtain a licence before you can list your property or accept guests. Certain types of short-term bookings may be prohibited altogether. Local municipalities may also vary greatly in how they enforce these laws. However, it is not impossible to list your property on Airbnb, you just have to find out from the local municipality if you have the correct permissions and if the property has the correct zoning.

References:

  • Guest Accommodation Policy, the City of Cape Town, Department of Planning & Building Development Management.
  • “Regulating Airbnb in Cape Town”, Jan Vermeulen, MyBroadband. https://mybroadband.co.za/news/government/210884-regulating-airbnb-in-cape-town.html

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

B3The 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)

What does the Deeds Office do?

A4The 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. Your estate agent should be able to recommend a conveyancing attorney to register your home loan and transfer a property into your name.

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.
  2. The Deeds Office examiners go through the documentation that has been submitted, and make sure that it complies with the relevant laws and legislations.
  3. The examiners then inform the conveyancer that the deeds are ready to be registered.
  4. 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.
  5. 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)

Sectional titles: What is the role of the
body corporate?

B3When it comes to sectional title schemes, there is still widespread misunderstanding of even the basics, starting with the body corporate and how it is established, as well as what its functions and powers are. This misunderstanding often gives rise to many problems and disputes in sectional title schemes which could quite easily have been avoided.

What is a sectional title?

A Sectional Title Development Scheme, usually referred to as a “scheme”, provides for separate ownership of a property, by individuals. These schemes fall under the control of the Sectional Titles Act, which came into effect on 1 June 1988.

When you buy a property that’s part of a scheme, you own the inside of the property i.e. the space contained by the inner walls, ceilings & floors of the unit. You are entitled to paint or decorate or undertake alterations as desired, providing such alterations do not infringe on municipal by-laws.

What is the body corporate?

The Body Corporate is the collective name given to all the owners of units in a scheme. Units usually refers to the townhouses or flats in a development. The body corporate comes into existence as soon as the developer of the scheme transfers a unit to a new owner. This means that all registered owners of units in a scheme are members of the Body Corporate.

  1. The Body Corporate controls and runs the Scheme.
  2. Day-to-day administration of the Scheme is vested in trustees who are appointed by the Body Corporate.
  3. Major decisions regarding the Scheme are made by the Body Corporate, usually at the annual general meeting (AGM), or at a special general meeting (SGM). At these meetings, matters, which affect the Scheme, are discussed, budgets are approved, rules can be changed and trustees are appointed. Each member of a Body Corporate is entitled to vote at these meetings, providing that the member is not in arrears with levy payments or in serious breach of the rules.

The Body Corporate exists to manage and administer the land and buildings in the scheme. This means, that the Body Corporate is required to enforce the legislation and rules in the Sectional Titles Act, the Management Rules and the Conduct Rules of the scheme. Amongst their other duties, the Trustees manage the Body Corporate’s funds, enforce the rules and resolve conflict to the best of their ability.

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

B2If 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
  2. File up-to-date rates and taxes receipts
  3. Record details of the leases on any property you have
  4. State who collects your rent
  5. State who compiles your yearly accounts
  6. 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.
  2. Only descendants survive: Estate is divided between descendants.
  3. Spouse & descendants survive: The spouse gets R250 000 or a child’s share and the balance is divided equally between the spouse and descendants.
  4. Both parents survive: Total share is divided equally between both parents.
  5. One parent: Total Estate goes to the parent.
  6. One parent & descendants: Half the Estate goes to the parent; balance is divided equally amongst descendants.
  7. 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.
  8. 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)

WHAT IS A TITLE DEED?

A1bIf you are planning to buy a new property, you will need to get the title deed transferred into your name to prove that you are the owner of the property. You will need the assistance of a lawyer specialising in property transfers (also known as a conveyancer) to help you transfer the title deed into your name.

You will only become the owner of the property when the Registrar of Deeds signs the transfer. After it has been signed, a copy of the title deed is kept at the Deeds Office closest to you.

A Title Deed is documentary proof of ownership in terms of the Deeds Registries Act 47 of 1937. Each property has its own separate Title Deed. It is an important document containing all the details pertaining to a particular property.

These details are:

  • The name of the existing owner as well as the previous owners.
  • A detailed property description which includes size.
  • The purchase price of the property paid by the existing owner.
  • Conditions applicable to the zoning, use and sale of the land.
  • All real rights registered in respect of the property.

The owner will normally have the Title Deed or a copy thereof in his possession. Before signing an offer to purchase carefully scrutinize the Title Deed.

What is The Deeds Office and The Deeds Registry?

There are numerous Deeds Offices throughout South Africa. Each Deeds Office holds a Deeds Registry, containing filed Title Deeds of all the properties in its particular jurisdiction. All the Deeds Registries are linked to a computer network. Your estate agent can, via a computer-linked facility from his office, examine any Title Deed (registered from 1980) in the country’s combined Deeds Registry.

What’s the Difference Between a Property Deed and a Title?

Title is the legal way of saying you own a right to something. For real estate purposes, title refers to ownership of the property, meaning that you have the rights to use that property. It may be a partial interest in the property or it may be the full. However, because you have title, you can access the land and potentially modify it as you see fit. Title also means that you can transfer that interest or portion that you own to others. However, you can never legally transfer more than you own. Deeds, on the other hand, are actually the legal documents that transfer title from one person to another. Sometimes the Deed is referred to as the vehicle of the property interest transfer.

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)

CO-OWNING PROPERTY WITH SOMEONE ELSE: THE UPS AND DOWNS

A3bWhat is co-ownership?

Co-ownership is when one or more people jointly own the same property. In essence, it is when they legally share ownership without dividing the property into physical portions for their exclusive use. It is thus commonly referred to as co-ownership in undivided shares.

It is possible to agree that owners acquire the property in different shares; for instance, one person owns 70 percent and the other 30 percent of the single property. The different shares can be recorded and registered in the title deeds by the Deeds Office.

The benefits

On paper, it’s a great idea. For starters, the bond repayments and costs of maintaining the home are halved. However, there can be problems and although not every friendship or relationship is destined to disintegrate, there does often come a time when one of the parties involved wants to sell up and move on to bigger and better things.

The risks

If ownership is given to one or more purchasers, without stipulating in what shares they acquire the property, it is legally presumed that they acquired the property in equal shares.

The risks, the benefits and the obligations that flow from the property are shared in proportion to each person’s share of ownership in the property. For instance, one of the co-owners fails to contribute his share of the finances as initially agreed, resulting in creditors such as the bank or Body Corporate taking action to recover the shortfall.

Having an agreement

If two people own property together in undivided shares it is advisable to enter into an agreement which will regulate their rights and obligations if they should decide to go their own separate ways.

The practical difficulties that flow from the rights and duties of co-ownership are captured by the expression communio est mater rixarum or “co-ownership is the mother of disputes”. It is therefore important that, when the agreement the co-owners entered into does not help them solve disputes, certain remedies are available to them.

The agreement should address the following issues:

  1. In what proportion will the property be shared?
  2. Who has the sole right to occupy the property?
  3. Who will contribute what initial payments to acquire the property.
  4. Who will contribute what amounts to the ongoing future costs and finances.
  5. How the profits or losses will be split, should the property or a share be sold?
  6. The sale of one party’s share must be restricted or regulated.
  7. The right to draw funds out of the access bond must be regulated.
  8. A breakdown of the relationship between the parties.
  9. Death or incapacity of one of the parties.
  10. Dispute resolution options before issuing summons.
  11. Termination of 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)

THE SALE AGREEMENT: CAN I USE THE COOLING-OFF PERIOD IF I CHANGE MY MIND?

A4bThe Consumer Protection Act has some serious implications for agents selling property – for one, a disgruntled purchaser can get out of a sale agreement within 5 days of signing it.

Section 16 of the Consumer Protection Act states as follows:

“A consumer may rescind a transaction resulting from any direct marketing without reason or penalty, by notice to the supplier in writing…, within five business days after the later of the date on which

  1. The transaction or agreement was concluded; or
  2. The goods that were the subject of the transaction were delivered to the consumer.”

However, the CPAs Cooling-Off Period will not help you when you change your mind. People are under the misconception that the CPA protects them, by providing the “cooling-off period”.

The Alienation of Land Act

In terms of The Alienation of Land Act, residential property transactions of R 250 000.00 or less are subject to a “cooling-off” period of five working days, calculated from the date of signature of the Offer to Purchase. It does not apply to residential properties sold for more than R 250 000.00. This provision remains in place and is not affected by the CPA.

A Purchaser who purchases a property, as a result of direct marketing, has the right to cancel the sale within five business days – the “cooling-off” period. This applies only to sales that result from direct marketing.

Direct marketing in terms of the Act includes to “approach” a person (i) in person, (ii) by mail or (iii) by electronic communication (this includes email and sms) for the purpose of promoting or offering to supply goods or services to the person.

The “cooling-off” period does not apply to sales that result from any other form of marketing such as any purchase made by a client that the agent is already working with or conventional print advertising or show houses.

The cooling-off period creates rights for the consumer buying property while regulating closely how suppliers or estate agents operate. Estate agencies and property professionals need to be aware of the implications and prepare for changes in the way they will interact with property buyers and sellers in the future.

References:

  • Anderson, AM. Dodd, A. Roos, MC. 2012. “Everyone’s Guide to South African Law. Third Edition”. Zebra Press.
  • The Estate Agency Affairs Board. “Purchaser’s Cooling-Off Right: Guidelines for Estate Agents”. [online] Available at: https://www.eaab.org.za/ [Accessed 31/05/2016].
  • http://www.privateproperty.co.za/

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)