Browsed by
Author: MHI Law

BEFORE LEASING, INCLUDE THESE IN THE AGREEMENT

BEFORE LEASING, INCLUDE THESE IN THE AGREEMENT

If you consider leasing out your property, it is important not to overlook any requirement and expectations you may have of the incoming tenant. A basic lease agreement should at least have the below stipulated in detail:

  1. Basic information

This includes the details of those who are party to the agreement, the address of the property being leased out, and the lease period.

  1. A deposit and other fees

The purpose of a deposit is to ensure that, should there be any damages to a property due to the tenant’s fault, they could be repaired without the landlord incurring the expenses or waiting for the tenant to pay for said damages. The deposit amount must be stated in the agreement and is payable to the tenant, after damages have been deducted, when the lease agreement has been terminated.

  1. Responsibilities, repairs and maintenance of the premises

Landlords are not able to oversee everything the tenant does, and this is where the responsibility and maintenance clause comes in. If the property’s utilities will be included in the rent, it should be stipulated and not assumed. The general upkeep, such as mowing the lawn or cleaning the pool, must be stated as to whom will be responsible for it. Saying it orally will not suffice because if it is not in writing, it’s easy to challenge it.

  1. Subletting and limits on occupancy

All the adults who will be living on the premises should be party to the agreement; their names, details and signatures must be provided. This allows for the landlord to determine who may live on the property and serves as proof that these are the occupants that he/she has approved.

  1. Rent payment

If this is not on the lease, then living on the property is obviously free. Unless this is intended, the rent payable must be included in the agreement. In addition, details regarding the amount, date to be paid, acceptable payment methods, and repercussions of failing to meet these requirements, must be included.

  1. Termination of lease

The terms that warrant a lease to be terminated must be included in the agreement.

  1. Pets

A landlord cannot just assume that a tenant will not have pets. If pets are allowed, descriptive limitations and restrictions must be included as well.

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)

COURT INTERFERENCE IN A CONTRACTUAL RELATIONSHIP

COURT INTERFERENCE IN A CONTRACTUAL RELATIONSHIP

When two or more parties enter into a contractual agreement knowingly and free from duress, the terms of the agreement must be upheld by each signatory. However, it must be noted when the contract is entered into under pacta sunt servanda, which means “agreements must be kept”, principles of fairness, good faith and reasonableness don’t play a part when circumstances leading to contract breach arise.

With regards to property law, for example, if a lease agreement states a date on which rental is due, then the party responsible for making this payment should meet this obligation. Failing to do so could enable the lessor to cancel the signed lease without notice and retake the property. Genuinely, because the lessee had agreed to the clause by signing the contract, that would then mean that they agree on the grounds of cancellation.

But if the late payment was due to circumstances beyond the lessee’s control, does the cancellation clause still stand?

If the lessee does not oblige with the lease cancellation, the lessor may approach a court to deliver judgement on the agreement and serve a notice of eviction. The lessee may argue that they acted in good faith and that the matter was beyond their control. The lessee may also argue that the implementation of the pacta sunt servanda principle varies from case to case and should be determined by the circumstances surrounding breach of the lease.

If the court chooses to hand down judgement based on the lessee’s argument, it is incorrect due to the freedom each party had when entering into a contractual agreement. Each party has bargaining power and should have, before signing, ensured that any possible errors were taken into account. Good faith and fairness don’t play a part when it comes to an agreement and a court cannot base that as the reason why the lessor should not have cancelled the lease.

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)

RENTAL RIGHTS DURING THE WATER CRISIS

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)

DOES SOUTH AFRICA HAVE A PUBLIC RETIREMENT INSURANCE SCHEME?

DOES SOUTH AFRICA HAVE A PUBLIC RETIREMENT INSURANCE SCHEME?

My husband’s employer made provision for an occupational retirement vehicle, but my employer refuses to do so. Is there any possible recourse for me in this situation?

There is currently no public retirement insurance scheme in South Africa. This is quite a predicament for most South Africans, as the majority of persons employed in the informal economy would have to rely on an old age grant (which is currently R1, 690.00 and will increase with R10.00 on the 1st of October 2018) rather than occupational retirement. This leaves one with the alternative options of either a private retirement fund or a provident fund.

Some employees are lucky enough to be given the choice between a pension or a provident fund, when they are employed. However, there is no statutory obligation on an employer to provide such a choice to their employee. In the case of a provident fund, the contributions of members are not allowed as tax deductions and, when the member reaches the retirement age, the whole benefit will be paid out in a lump sum. In contrast, with a pension fund, the member gets one third of the total benefit in a cash lump sum and the other two-thirds is paid out in the form of a pension over the rest of the member’s life. The contributions to a pension fund are deductible for tax, which offers the member some tax benefits.

Independent contractors, the self-employed, and other persons who do not qualify to join occupational retirement funds, are left with no other option but to turn to private retirement annuities. The high-income employees also tend to invest their monies in this option to secure a comfortable retirement.

The private retirement scheme option has now taken up the responsibility of a social insurance scheme.

In his budget speech on the 21st of February 2018, the Finance Minister, Malusi Gigaba, declared that the old age grant would increase by the 1st of October 2018. This is the last option for those whose retirement plans have failed, or the only option for most informal economy employees or low-income employees.

With the lack of a public retirement insurance scheme, employees who are not fortunate enough to be given the option of an occupational retirement vehicle are left with no other alternative but to turn to a private insurance scheme. This decision is however also dependant on a “practicable” salary. There is currently no statutory obligation on employers to provide for an occupational retirement scheme.

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)

There is a way to keep the view

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)

HOW BINDING ARE BODY CORPORATE FINES?

HOW BINDING ARE BODY CORPORATE FINES?

In an estate or sectional title scheme, it is challenging to ensure that everyone will stick to the conduct rules and to aid this, body corporates often fine the chancers. How far can the body corporates stretch their fining, and are these fines binding?

Each body corporate may choose what to impose formally in their code of conduct unless a rule is already part of the conduct rules in terms of the Sectional Titles Act. This is the only way the fines can be binding as enforceable, and they have to be reasonable and fair.

When fines are imposed, they cannot favour or benefit certain residents while leaving others out of mind. Substantially, they must serve the same purpose. The notification of a fine must be received by the owner or resident through writing. There is a correct way in which fines may be imposed:

  1. Complainants to lodge complaint

This must be lodged in writing or through an incident report to the trustees or the estate’s managing agent.

  1. Notice of particulars of the complaint

The owner and the tenant, or the resident, must be given a notice of the particulars contained in the complained as well as reasonable time to respond to the complaint. The resident/tenant must also be given enough information regarding the incident, including the rules that they may have broken.

  1. Second notice

Should the owner or resident not heed the first notice, a second notice may be issued mentioning the contravention is continuous or has been repeated. The transgressor must then be invited to a trustee meeting where they will be given a platform to present their case or defend themselves.

  1. The hearing before the fine

Before a fine is imposed, a hearing must have taken place. In the meeting, witnesses may be called to testify in favour of the transgressor and the transgressor may state their side of the story. Those who laid the complaint may also be cross-examined.

  1. Discussing evidence

Once the hearing is over, the trustees may then review the evidence presented to them and make a decision on whether or not to impose the fine.

If a fine is imposed, the amount should be reasonable, substantial and be proportionate to the purpose of the penalty.

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)

UNLAWFULLY EVICTED? HERE’S A PIECE OF PIE

UNLAWFULLY EVICTED? HERE’S A PIECE OF PIE

Unless the sheriff of the court has evicted you, you should remain right where you are. If anyone else carries out an eviction, it constitutes as unlawful according to the Prevention of Illegal Eviction from and Unlawful Occupation of Land (PIE) Act.

Regarding the eviction process, the PIE Act stipulates this:

  • Certain procedures must be followed
  • Notice of the intention of getting a court order must be given to the tenant
  • The landowner or landlord must apply to the court to have a written notice served on the tenant
  • The notice must be served at least 14 days before the hearing

The Rental Housing Tribunal (RHT) works alongside the Rental Housing Act, fostering the relationship between landlords and tenants to be one of fairness in terms of lease agreements and any unlawful evictions and unlawful notices to vacate. From the moment the lease agreement terms have been breached, for example, the tenant fails to make rent payments, the landlord may cancel the agreement and the tenant then becomes an illegal occupier.

The PIE Act states that no one may be without property except in terms of law of general application. Arbitrary deprivation of property from any person is unlawful. Additionally:

  • no one may be evicted from their home, or have their home demolished without an order of court made after considering all the relevant circumstances;
  • it is desirable that the law should regulate the eviction of unlawful occupiers from land in a fair manner, while recognising the right of land owners to apply to a court for an eviction order in appropriate circumstances;
  • special consideration should be given to the rights of the elderly, children, disabled persons and particularly households headed by women, and it should be recognised that the needs of those groups should be considered.

The notice does not guarantee that the unlawful tenant will leave the premises as the court can only grant eviction if it is just and equitable. The owner must also have reasonable grounds for eviction and alternative accommodation available to the tenant.

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)

WHEN CAN THE MUNICIPALITY DISCONNECT MY WATER AND ELECTRICITY?

WHEN CAN THE MUNICIPALITY DISCONNECT MY WATER AND ELECTRICITY?

The municipality is the place where most, if not all, services are monitored for their availability to a property, and it is the very place that may cut off the supply of said services. Their authority does, however, come with the responsibility of remaining within the legal boundaries of managing the supply of services to properties. This article will explore the legalities of disconnecting water or electricity.

Accounts in arrears

If one of your municipal services is in arrears, the municipality is well within their rights to disconnect whatever service when there are undisputed arrears owed to any other service in connection with the related property. Before any disconnection takes place, there is a procedure for the municipality to follow.

Notices

The municipality is legally obligated to give a notice to the person responsible for the account. A minimum of 14 days written notice of termination is required for water and electricity accounts in arrears and if the notice period is shorter than 14 days, or not supplied, the disconnection is illegal. The 14-day notice gives the responsible party an opportunity to present any disputes or queries they may have regarding the account or allow them to repay the arrears.

The query period

Once a query relating to the account has been put in, the municipality may not disconnect services provided that the amount being queried is equal to the amount in arrears. In the case where the amount is less that the amount in arrears, the service may be disconnected for the undisputed amount owing.

Payment of arrears

When a query has been logged, it can only be valid for so long provided that the monthly bill or any other related payments are being made to the respective account. If the responsible person does not make any form of payment, the service may be disconnected even if a logged query exists with the municipality.

State where the payment should go

If there is an account dispute and the responsible person makes a payment to the municipality, the municipality may choose to allocate that money to any account they wish to do so. This means the account in need of the payment may not have the payment made into it. To curb this, the responsible person must notify the municipality, in writing, of the payments being made as well as which account they should be allocated to. This must be done before payment is made.

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)

UNLAWFULLY EVICTED? HERE’S A PIECE OF PIE

UNLAWFULLY EVICTED? HERE’S A PIECE OF PIE

Unless the sheriff of the court has evicted you, you should remain right where you are. If anyone else carries out an eviction, it constitutes as unlawful according to the Prevention of Illegal Eviction from and Unlawful Occupation of Land (PIE) Act.

Regarding the eviction process, the PIE Act stipulates this:

  • Certain procedures must be followed
  • Notice of the intention of getting a court order must be given to the tenant
  • The landowner or landlord must apply to the court to have a written notice served on the tenant
  • The notice must be served at least 14 days before the hearing

The Rental Housing Tribunal (RHT) works alongside the Rental Housing Act, fostering the relationship between landlords and tenants to be one of fairness in terms of lease agreements and any unlawful evictions and unlawful notices to vacate. From the moment the lease agreement terms have been breached, for example, the tenant fails to make rent payments, the landlord may cancel the agreement and the tenant then becomes an illegal occupier.

The PIE Act states that no one may be without property except in terms of law of general application.  Arbitrary deprivation of property from any person is unlawful. Additionally:

  • no one may be evicted from their home, or have their home demolished without an order of court made after considering all the relevant circumstances;
  • it is desirable that the law should regulate the eviction of unlawful occupiers from land in a fair manner, while recognising the right of land owners to apply to a court for an eviction order in appropriate circumstances;
  • special consideration should be given to the rights of the elderly, children, disabled persons and particularly households headed by women, and it should be recognised that the needs of those groups should be considered.

The notice does not guarantee that the unlawful tenant will leave the premises as the court can only grant eviction if it is just and equitable. The owner must also have reasonable grounds for eviction and alternative accommodation available to the tenant.

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 DREADED “F” WORD – READ ABOUT THE LATEST AMENDMENTS TO THE FICA PROCEDURE

THE DREADED “F” WORD – READ ABOUT THE LATEST AMENDMENTS TO THE FICA PROCEDURE

The main purpose for the enactment of FICA and FICAA is to identity any proceeds that originates from crime and other illegal activities, as well as to prevent fraud and the financing of terrorism.

Since the bombing of the World Trade Centre on 11 September 1993, a world-wide tendency was created in terms of which more and more pressure was put on financial institutions to ascertain the source of funds utilized by their clients to conclude business transactions. This obligation was also placed on attorney firms, which are defined as accountable institutions (“AI’s”) in terms of FICA.

The above legislation have a profound impact on the manner in which a property transaction is to be concluded, and it warrants the provision of various documentation by both the Seller and the Purchaser to the transferring attorney attending to the transfer of a property. Under normal circumstances these documentation are required prior to the commencement of a property transaction, and in any event, before any funds can be invested on the trust account of the transferring attorney on behalf of either the Seller or the Purchaser. The Fica procedure also requires more than just the provision of a certified copy of the identity document of the parties involved.

Although FICA was rather prescriptive with the conditions AI’s had to comply with regarding the identification and verification of its clients, FICAA introduced certain new terms, posing different obligations on AI’s. One of the main differences between FICA and FICAA is the fact that FICAA created a “risk based approach” to be implemented by AI’s, leaving it to said institution to establish on their own what risk each different client poses to the object that the legislation wish to prevent, and to establish their own internal mechanisms of identifying said risks.

To identify any relevant risks, FICAA requires an institution to institute certain customer due diligence measures. These measure requires the AI to know and understand the core business of its clients, to identity the beneficial owners (being the natural persons behind the legal entity) to prevent abuse of legal entities for fraud or other purposes, as well as to ensure that enhanced customer due diligence procedures are followed when the institution is dealing with foreign prominent public officials and domestic prominent influential persons. FICAA contains examples of which persons qualify as being prominent persons as defined in the Act.

After the risk assessment is done, the AI is responsible to act on the outcome of the risk assessment in accordance with its risk management and compliance programme. In terms of FICAA all AI’s are obliged to have their own risk management and compliance programme, specifically drafted to identify the risks posed to the main business of the accountable institution itself, and which programme are also required to set out the institutions plans to manage these risks in light of its core business, whilst simultaneously ensuring compliance with FICA and FICAA.

The outcome of the risk assessment might require the AI to prevent the risk all together by terminating the client’s mandate, or to report the risk to state entities in terms of the procedure prescribed in FICA and FICAA. The AI might also consider to implement increased customer due diligence measures by for example, to require the provision of additional documentation by the client to ensure the authenticity of the information provided to the AI by the client.

Currently there are no clear guidelines as to exactly how the risk based approach have to be implemented for specific industries, or what and how the risks will be managed. It appears as if each AI within an industry will have to apply their minds and draft a workable document addressing all relevant and expected risk scenario’s within the industry. This in itself seems to be a daunting task, and currently the various industries are hoping to receive valuable and practical feedback from the Financial Intelligence Centre in order to assist them with the drafting of such a programme.

This article was written from the point of view of a conveyancer, wishing to provide an overview of the requirements imposed by the new legislation, and to highlight the type of information required by the specific firm of attorneys according to their own internal guidelines for FICA purposes.

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)