CONSUMER PROTECTION ACT

Please note that the information contained in this section is not exhaustive and serves as a brief overview of the Consumer Protection Act (68 of 2008), hereinafter referred to as the CPA, as it specifically relates to property related transactions. There are still many ambiguities and uncertainties surrounding some of the provisions of the Act which only time (and the courts) will be able to interpret and clarify. You are strongly advised to contact our offices for further advice or consultation on this topic.

DEED OF SALE

A written agreement must be drafted and signed. A verbal sale agreement in respect of immovable property is unenforceable and void in South Africa. The following are some important clauses to be borne in mind:

DONATIONS TAX

Donations Tax is payable by any South African resident. The donations tax provisions do not apply to non-residents even if they donate South African assets. Donations tax is payable on the value of any gratuitous disposal of property (including the disposal of property for inadequate consideration) and the renunciation of rights.

ELECTRONIC DEEDS REGISTRATION SYSTEMS ACT

The Electronic Deeds Registration Systems Act (19 of 2019), was signed into law on the 19 September 2019, and published in the Government Gazette on 3 October 2019, and will come into operation on a date fixed by the President by proclamation in the Gazette (who may set different dates for the coming into operation of any or certain provisions of this Act for the different deeds registries). The Act aims to facilitate the development of an Electronic Deeds Registration System, known as e-DRS – which will enable the electronic processing, preparation, lodgement and registration of deeds and documents by conveyancers and the Registrar of Deeds over the internet.

ESTATE DUTY

The general rule is that if the taxpayer is ordinarily resident in the Republic at the time of death, all of his assets (including deemed property), wherever they are situated, will be included in the gross value of his estate for the determination of duty payable thereon. Estate duty is levied at 20% on the first R30 million of the dutiable estate. Estate duty will be levied at 25% on the dutiable estate in excess of R30 million. Estate duty is levied on the South African property of non-residents. Deemed property includes insurance policies on the life of the deceased, claims in terms of the matrimonial property act as well as property that the deceased was competent to dispose of immediately prior to his death.

FORCE MAJEURE AND PROPERTY

A general “force majeure” (or “act of God”) clause is often included in lease agreements, and in most cases, its definition is termed broadly. Such a clause will only apply in circumstances which are beyond the parties’ control, which human foresight could not have anticipated, and which make performance in terms of the contract objectively impossible.

MORTGAGE BOND REPAYMENT FACTORS

The table gives a monthly repayment per R1,000 of a loan with an interest rate ranging between 8% and 25% p.a, over a period of 20, 25 or 30 years. For example, if the loan is R100 000 at an interest rate of 10% p.a, to be repaid over 20 years, the monthly repayment is R100 000 divided by R1,000 × 9.65 which is R965. Monthly repayments of approximately R965 will be required to liquidate capital and interest on a bond of R100 000.

PITFALLS & RECOMMENDATIONS

Delays – various factors can cause delays e.g. the municipality requiring additional documentation/funds when rates clearance figures are applied for, either party delaying payment of the required funds. Lost or destroyed title deeds will also cause delays, as well as added costs. A written application and affidavit is required to be submitted to the Registrar of Deeds, stating that the title deeds have been lost or destroyed, and pursuant to this, an advertisement must be placed in a local newspaper that it is the advertiser’s intention to apply for a certified copy of the title deed. Closure of the Deeds Office for deep cleaning as a result of the Covid-19 pandemic will also cause delays.

PROPERTY PRACTITIONERS ACT

The Property Practitioners Act (22 of 2019) came into operation on 1 February 2022. The Act repeals the Estate Agency Affairs Act (112 of 1976), and aims to regulate all property practitioners (not just estate agents), including estate agents and agencies, property brokers, home inspectors, providers of bridging finance, bond brokers, marketers, auctioneers, property managers, sellers of time share, developers, rental agents, home owner associations (where a service is provided as intermediary primarily to sell/lease property in that home owner’s association), digital portals that publicly exhibit properties, and employees of attorneys who act as estate agents. The Act specifically excludes a person who does not carry out any of these functions in the ordinary course of business, and a natural person who sells their own property (even if it is in the ordinary course of business), as well as attorneys, candidate attorneys and the Sheriffs of the Court. The Act applies to the…

PROTECTION OF PERSONAL INFORMATION ACT

The Protection of Personal Information Act (4 of 2013), otherwise known as POPIA, promotes the protection of personal information by public and private bodies.

REGULATIONS FOR NEW BUILDINGS AND ENERGY USAGE

The Energy Efficiency Regulations for energy usage in buildings provide that all new buildings and building extensions in South Africa must conform to the regulations on energy conservation, including homes, industrial buildings, hotels and schools. Building plans will not be approved without compliance, and Inspectors are required to confirm same, specifically energy usage requirements. No compliance – no Occupancy Certificate.