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Category: Property Law

UNDERSTANDING SALES

UNDERSTANDING SALES

You decide to buy a fridge and a washing machine on Gumtree. It is important to note that there are several elements involved in this seemingly simple sale: (1) the sale agreement; (2) the transfer of ownership; (3) the risk of damage to the items; and (4) defects in the item.

(1) Sale Agreement

The law distinguishes between the contract of sale and the actual transfer of ownership. These two are treated as separate events in the overall transaction. The sale agreement is the underlying contract in terms of which the seller undertakes to transfer the property to the buyer in exchange for consideration. All the remedies under the law of contract are available here and it is in terms of the sale agreement where the buyer is afforded the most legal protection e.g. if the seller guarantees the washing machine will work for 3 years and it does not, then you can claim from the seller for breach of contract; or if the seller misrepresents that the washing machine is a front-loader when in fact it is a top-loader, the contract can be cancelled on the basis of misrepresentation and the goods and monies paid are to be returned. However, the agreement of sale does not on its own transfer property from the seller to the buyer.

(2) Transfer of Ownership

To pass ownership there must be delivery of the item and the intention to actually transfer ownership. In the case of a cash sale, the price must also be paid at the same time as delivery in order for ownership to transfer. In a credit sale, ownership passes on delivery and payment of the purchase price is postponed. In our law, ownership can be transferred if these requirements are met without a valid contract of sale. However, the buyer would have a claim against the seller in unjustified enrichment.

(3) Risk

A further element to consider is who bears the risk of damage or destruction to the property before it is delivered. Risk passes from the seller to the buyer when the sale agreement is ‘perfected’. This is when the price has been set; and the item be determined or identified. Any suspensive conditions must also be fulfilled. A suspensive condition suspends the operation of the contract until the happening of a future event e.g. I will sell the washing machine to you if my cousin does not buy it by Wednesday. The operation of this contract is suspended until Wednesday. Where damage takes place prior to the fulfilment of the suspensive condition, the seller bears the risk.

(4) Defects

Where there is a latent defect (one not visible upon reasonable inspection) then the buyer can ask for a reduction in the purchase price. Only where the item is so defective that it is not fit for its purpose and that a reasonable person would not have bought the item, can it be returned. This is the extent of a buyer’s remedies for latent defects. It is only where the seller is a professional seller (e.g. retail store trading in appliances) or a manufacturer, that the buyer claim for all losses e.g. the loss suffered where a faulty washing machine damaged clothing and the surrounding walls and cupboards.

However, where an item is sold ‘voetstoots’, it is sold in its condition ‘as is’. This voetstoots clause forms part of the sale agreement. Where such a clause is present, there is a duty on the buyer to properly inspect the property and ensure that there are no defects. If the buyer notices a defect later on, he will have no remedies available against the seller.

Conclusion

In most cases where you have entered into a sale and are dissatisfied with the outcome, the most extensive relief would be contractual remedies for breach of the sale agreement. However, it is important to establish whether risk has in fact transferred to you before you took delivery of the item. Furthermore, buyers should be cautious as to whether items are being sold ‘as is’, because such a clause leaves the buyer without any remedies where the item is defective. However, this voetstoots clause would not protect a seller who is acting fraudulently. Should you wish to know more, feel free to make an appointment with our offices.

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)

FEARING FORECLOSURE: WHAT ARE YOUR RIGHTS AS THE HOMEOWNER?

FEARING FORECLOSURE: WHAT ARE YOUR RIGHTS AS THE HOMEOWNER?

The recent junk status announcement has shaken us into a quick action of tightening our belts and letting go of luxuries to afford our day to day expenses. This financial condition inhibits the possibility of purchasing a new house, let alone affording your current home.  Have you thought about what you would do if your foreclosure wiped its shoes on your doormat?

You have the option to sell

Selling, rather than waiting for foreclosure, offers a greater possibility of you receiving greater value for your home. You may choose to sell privately or through an estate agent. It is advisable that your qualified conveyancing attorney be notified of any concerns, as well as any interests of potential buyers. During this time, look for alternative home solutions, and consider a suitable transfer date.

  • Prior to the signing of the agreement of sale and the transfer of ownership, the property still belongs to you.

You have time

Before receiving a foreclosure notice, the bank allows a grace period for you to catch up on your bond instalments. It may be difficult to do so, considering your finances have already been tightrope walking over the past few months. Meeting with your bank allows the opportunity for a payment restructure to be discussed and agreed upon.

  • The repossession procedure is paused during the time you are in application of or in debt review. The National Credit Act allows this opportunity.

Approach your lawyer

If, after attempting to recover payments, you receive foreclosure summons, contact your lawyer. As stated by section 26(3) of the South African Constitution, your eviction may not be finalised without an official court order. The courts consider all relevant circumstances before reaching a final eviction decision.

  • You may not be arbitrarily removed from your home.

You won’t be homeless

You have the right to adequate housing, despite your previous or current economic standing. Adequacy is determined by a place to eat, shelter, a place to sleep, and a place to raise a family, and this accessibility is the responsibility of the state. Following the outcome of the sale by the bank, the home is no longer in your ownership, and the state classifies you as an unlawful occupier.

  • The eviction process will then follow that of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act.

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)

References:

National Credit Act

Constitution of the Republic of South Africa [1996]

Prevention of Illegal Eviction from and Unlawful Occupation of Land Act [No. 19 of 1996]

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

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

What 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.

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)

References:

http://igrow.co.za/co-ownership-of-property-what-you-need-to-know/

http://www.privateproperty.co.za/advice/property/articles/the-pitfalls-of-property-co-ownership/5046

http://www.jgs.co.za/index.php/property/owning-prop-jointly-the-do-s-and-dont-s

RENTING PROPERTY TO FOREIGNERS

RENTING PROPERTY TO FOREIGNERS

Renting property in South Africa is a straightforward process. The country has a vast selection of rental accommodation including bachelor flats in apartment blocks, Victorian cottages, stand-alone houses with big gardens, and semi-detached units in modern townhouse complexes.

In South Africa, the right of a foreigner to purchase immovable property was restricted in the past by the Aliens Control Act. These restrictions were uplifted in 2003 by the new Immigration Act (“the Act”) which repealed the Aliens Control Act and many of its restrictive provisions and now clearly defines who a legal foreigner is and who is not. In short, a legal foreigner is a person in possession of a valid temporary residence permit or a permanent residence permit approved by the Department of Home Affairs.

The new Act makes provision for various temporary residence permits to be issued to foreigners, including amongst others:

  • A visitor’s permit
  • A work and entrepreneurial permit
  • A retired person permit

In principle, a landlord or tenant can legitimately lease or sell immovable property to any person recognised under the Act as a legal foreigner.

That said, foreigners working in South Africa with a legal work permit, are not regarded as “non-residents” by the South African Reserve Bank. They are considered to be residents for the duration of the period of their work permit and are therefore not restricted to a loan of only 50% of the purchase price.

It is also important to take note that the Act criminalizes the letting or selling of immovable property to an illegal foreigner by making this transaction equivalent to the aiding and abetting of an illegal foreigner and is such an act classified as a criminal offence in terms of the Act.

In conclusion, a legal foreigner may let or buy immovable property in South Africa, provided that he is the holder of either a legal temporary residence permit or a permanent residence permit approved by the Department of Home Affairs. Ensure that you enquire from your potential tenant or purchaser whether they are legally present in South Africa and obtain the necessary proof from them before entering into any transaction with a foreigner. Also, take account of the restrictions on local financing, particularly where the procurement of financing is a condition precedent to the agreement.

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)

References:

http://www.expatarrivals.com/south-africa/accommodation-in-south-africa

http://www.avidfirefly.co.za/00000/index.php?option=com_k2&view=item&id=92:can-i-lease-or-sell-my-house-to-a-foreigner?

PAYMENT OF BUILDING DRAWS- KNOW YOUR RIGHTS

PAYMENT OF BUILDING DRAWS- KNOW YOUR RIGHTS

When purchasing a property in a new development directly from the Developer, normally one of the agreements entered into between the parties is a Building Agreement.   Apart from the daunting fact that the Purchaser signs an agreement instructing a Contractor to build your dream house on a vacant piece of land at the time that the agreement is entered into, the legal jargon contained in the Building Agreement can in itself be incomprehensible or just downright confusing.   Read more about what you need to know and understand about the payment of building draws

Most new developments requires a Purchaser to sign a Deed of Sale for the purchase of a vacant plot, together with a separate Building Agreement to be entered into between the Purchaser and the Developer regarding the terms and specifications for the erection of your house on the plot, subsequent to transfer.  The simultaneous conclusion of these two agreements is normally made subject to each other.  It also sometimes happens that the building contractor with whom a Building Agreement is entered into, is not the same entity as the Developer from whom a plot within the development is bought.

The terms of a Building Agreement between the prospective Purchaser (called the “Employer” in a Building Agreement) and the Contractor, set out the contract sum for the house to be build, and also normally includes a detailed list of the specifications of the house, as well as the cost and detail of any extra additions required by the Employer to be added to the property.

The clause containing the contract sum will also deal extensively with the dates and times by when the Employer is required to pay instalments of the contract sum to the Contractor.  By means of example, the Building Agreement will normally refer to payment of 20 (twenty) percent of the contract sum when the dwelling reached floor height, 20% when the dwelling reached roof height and so forth, up until 100 percent of the contract sum have been utilized.

The Building Agreement will normally also contain further clauses relating to the financing of the contract sum, for example, by means of a building loan or otherwise, as well as the completion date for the erection of the dwelling, public liability insurance and the like.

The Contractor will not commence any building operations until the full contract sum is secured, either in terms of a building loan with a financial institution, and/or the payment of the full contract sum into the trust account of the Conveyancers instructed to attend to the registration of the development.

It is important to note that the Employer is only liable for payment of the contract sum in accordance with the instalment percentages agreed upon in the Agreement, and only once the Contractor have reached the various levels of progress with the erection of the dwelling as agreed upon.   As such, a Contractor is for example not entitled to request a progress draw payment/instalment prior to commencement of the erection of the dwelling if the Building Agreement stipulates that the first progress draw payment can only be requested from the Employer when the dwelling reached floor height.  Even though this is common practice, there is no contractual basis for a Contractor to request payment of any instalments towards the contract sum prior to commencement of the building operations if the Building Agreement does not make provision for any upfront payments.  The Employer is also under no obligation to entertain such a request for payment if the Agreement does not provide for same.

The above also applies in respect of the payment of each progress draw or instalment to the Contractor.  Should the Employer’s contract sum be invested in the trust account of the Conveyancers dealing with the development, the Contractor should request payment of a written building draw instalment to the Conveyancers upon the Contractor reaching a specific stage in the building process requiring payment of a building draw.  The Conveyancers should obtain the written consent from the Employer authorizing payment of the amount of the building draw instalment prior to any payments being made to the Contractor.    The above measures are protecting the Employer from losing control over the payment of building draws and preventing a Contractor from receiving any portion of the contract sum without the required progress in the building operations being made.

The Employer should also make the necessary enquiries with the Conveyancers to ascertain the exact amount of fees charged by them to administer the payment of building draws and to obtain the relevant parties’ consent.  As this requires the Conveyancers to make payments from the Employers investment held on the Conveyancers’ trust account at the office of the Conveyancers, a nominal administrative fee is normally charged by them for each building draw instalment having to be paid to the Contractor.

In short, Employers, be sure to keep close tabs on the progress with the building of your house, and make sure that you know exactly when and for which amounts building draw instalments is being requested.  Keep diligent records of any payments being made, and seek independent legal advice should you feel that you are being pressurized to make payments without the Contractor living up to the terms of the Agreement.

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)

IS MY TENANT RESPONSIBLE FOR THE WORN OUT CARPET?

IS MY TENANT RESPONSIBLE FOR THE WORN OUT CARPET?

There are several damages a landlord can deduct from a tenant’s deposit. However, there are certain household items that will experience normal wear and tear over time. This is referred to as “fair wear and tear”.

Fair wear and tear is seen as damage or loss to an item at the property which happens as a result of ordinary use and exposure over time.

According to the Rental Housing Act, a landlord is free to claim compensation for damage to the property caused by the tenant, except for fair wear and tear.

It’s important to remember that the original condition and age of the item at commencement of the lease agreement needs to be taken into account, and therefore cost of depreciation of the item due to normal wear. Paint fades, doors and walls get scuffed with use, and everything wears or breaks over time, even with a tenant who really cares for the property, and one can’t hold a tenant liable for this.

If a tenant or landlord has a problem, they can go to the Rental Housing Tribunal to resolve it.

The Rental Housing Tribunal

The Rental Housing Tribunal is a useful resource for both landlords and tenants who are dealing with rental property disputes in different forms. Cases that the Rental Housing Tribunal deals with include:

  • Tenants defaulting on their rent
  • Failure to repay a deposit
  • Invasion of a tenant’s privacy
  • Overcrowding of a rental property
  • Determining a fair rental amount
  • Illegal seizing of a tenant’s property
  • Discrimination against a prospective tenant
  • A receipt for rent not being issued
  • Unacceptable behaviour by a tenant
  • Lack of maintenance and repairs to the property
  • Illegally refuse a tenant access to the property or interrupt services
  • Unacceptable living conditions

A general rule of thumb is that, if a tenant has damaged something that does not normally wear out, or the tenant has substantially shortened the life of something that does wear out, the tenant may be charged the prorated cost of the item. The landlord should take into account how old the item was and how long it may have lasted otherwise, as well as the cost of replacement.

Conclusion

Ordinary wear and tear to carpets should not count against the tenant, however large rips or stains would be considered damage. Any deduction for the tenant’s deposit should take into account the age of the carpets, compared with the expected total time of usage.

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)

References:

http://www.lettingworx.co.za/blog/item/fair-wear-and-tear-on-rented-property.html

http://www.privateproperty.co.za/advice/property/articles/what-is-classified-as-fair-wear-and-tear/5010

YOUR NEIGHBOUR’S LEAKING BATHTUB SHOULD NOT BE YOUR PROBLEM IN A SECTIONAL TITLE SCHEME

YOUR NEIGHBOUR’S LEAKING BATHTUB SHOULD NOT BE YOUR PROBLEM IN A SECTIONAL TITLE SCHEME

A4It is not uncommon to, at some point in your life, find yourself living in a sectional title scheme. Living in significantly closer proximity to your neighbours can mean fertile ground for disputes. At the very cusp of sectional title living is the responsibility on yourself or your landlord to take reasonable care of your unit so as to avoid being a nuisance to your neighbour and vice versa applies to your neighbour.In some cases efforts to resolve an issue with your neighbour or body corporate without formal or legal intervention leaves you high and dry and your bathroom moist (with mould and mildew accumulating by the day). Try as we may, certain matters are not within the scope of being resolved “neighbourly” or amicably, and it may further be aggravated by the fact that you are attempting to resolve an issue with an uncooperative neighbour or body corporate.

The previous lack of an effective dispute resolution mechanism served as a restraint in resolving community scheme disputes out of court. Certain changes in legislation have however seen the Community Schemes Ombud Service Act 9 of 2011 (“the Act”) give birth to one of your more user-friendly options in resolving a dispute, a welcome alternative to costly litigation.

The Act, central to its purpose, established a Community Schemes Ombud Service (“CSOS”) to provide a platform for dispute resolution specific to community schemes.

The services provided by the CSOS include dispute resolution between the body corporate, members, occupiers and managing agents ins a cost-effective and timely manner, without having to resort to the courts. In performing its functions the CSOS must promote and monitor good governance of community schemes.

Any person who are materially affected by a dispute may lodge an application with the CSOS in terms of section 38 of the Act. The relief that may be sought (and must be referred to in your application) is set out in section 39 of the Act.

Examples of orders that may be applied for are:

  1. Financial issues, for example an order declaring that a contribution levied on owners or occupiers, or the way it is to be paid, is incorrectly determined or unreasonable, and an order for the adjustment of the contribution to a correct or reasonable amount or an order for its payment in a different way;
  2. Behavioural issues, for example an order that particular behaviour or default constitutes a nuisance and requiring the relevant person to act, or refrain from acting in a specified way;
  3. Scheme governance, for example an order requiring the association to record a new scheme governance provision consistent with a provision approved by the association;
  4. Meetings, for example an order requiring the association to call a general meeting of its members to deal with specified business;
  5. Works pertaining to private areas and common areas, for example an order requiring the associating to have repairs and maintenance carried out.

The application must be submitted by physical delivery or submitted electronically. The e-mail addresses for electronic submission can be retrieved from the CSOS website for the province in which you wish to make application.

Once the application has been submitted you will be advised of the case manager assigned to your case who will, firstly consider whether there are any prospects of settlements and if so, the matter will be referred to conciliation. Similar to the CCMA, the conciliation phase of the enquiry will be purely held in an attempt to settle the matter on a more “informal” basis. If, however, these settlement negotiations fail, the matter must be referred to adjudication.

The functions of the adjudicator are to act swiftly, investigate the application and determine whether it would be appropriate for him/her to make an order. Legal representation is not allowed during the conciliation or adjudication unless the adjudicator and other parties agree thereto.

An adjudicator’s order is enforceable in a Magistrate’s or High Court. Once the adjudicator’s order has been lodged with the administrative staff of a court it must be registered as an order of court.

Despite the advent of new and improved sectional title legislation and the forums that came with it, some complex disputes are better left to the courts and it may prove to be a better idea to involve your legal representative to assert your rights in this regard.

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)

MANAGING DISPUTES OVER A DECEASED RELATIVE’S ESTATE

MANAGING DISPUTES OVER A DECEASED RELATIVE’S ESTATE


A2If someone leaves a sizeable estate behind, it may cause conflict among the possible heirs. The help of an attorney, when settling an estate after a death, can avoid unnecessary troubles.

The Administration of Estates Act, 1965, determines what must happen with an estate after a person’s death. There are certain steps that should be taken to ensure the process is legal. However, if the estate is worth a lot of money or the deceased has children, then it is a good idea to seek the assistance of an attorney, as family disputes and debts of the deceased can be confusing. In order to this an executor will be appointed to act on behalf of the estate.

Finding the will of a deceased relative

If the deceased person left a will the first thing to do is find it. If they did not tell you beforehand where their will was, you can try calling the probate court in their district or the office of the master of the High Court to check if they have a copy of the will. Other places to call would be the deceased’s life insurance company, bank or lawyer. Otherwise, they might have left a copy of it somewhere secure in their home.

Who is the executor?

An executor is the person appointed to handle the process of settling the estate. The executor will either be mentioned in the will of the deceased or appointed by the master of the High Court. The master will ultimately decide who will take the role of executor. If the chosen executor doesn’t know how to handle the estate or is unfamiliar with the legal procedure, he or she can go to a lawyer for help. Once the executor has been chosen, the master will give them “Letters of Executorship”, which will give only them the authority to handle the estate.

What does the executor need to do?

The executor has several responsibilities such as arranging the valuation of the estate’s property and assets. They will also be responsible for contacting and dealing with all the beneficiaries.

Some other responsibilities of the executor include:

  1. Arranging provisional payments for the family’s immediate needs.
  2. Opening a bank account for the estate and depositing the estates money in it.
  3. Paying all the necessary estate duties.

It’s important that any person who wants to act on behalf of the deceased person’s estate have the Letters of Executorship. If not, their actions would be considered illegal. This also applies to the spouse of the deceased person. This eliminates the possibility of several different family members trying to influence the estate’s dealings. The executor will also decide how the assets will be divided between the heirs and if any or all assets need to be sold. If a will is in place the executor will base his/her decisions on it.

Eventually, the executor will prepare a liquidation and distribution account. This would include what will they intend to do with all the assets left after expenses. This account would be delivered to the master, who will check to see if the executor’s actions reflect the will of the deceased and that all legal requirements have been fulfilled.

Important things to keep in mind?

The master of the High Court should be notified of the deceased person’s estate not later than 14 days after the death. According to the Department of Justice a death of anyone who owned property in South Africa must be reported to the master, whether or not they died in the country.

All estates that exceed R50 000 should be reported to the master of the High Court directly because magistrate’s offices have limited jurisdiction. If reported to the magistrate’s office, estates would usually be referred to the master.

References

The Department of Justice and Constitutional Development. 2012. “Reporting the estate of the deceased”. Accessed from: http://www.justice.gov.za/services/report-estate.html/ on 11/05/2016.

Administration of Estates Act 66 of 1965. Accessed from: http://www.justice.gov.za/ on 11/05/2016.

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)

COMMERCIAL “COMMON LAW” EVICTIONS

COMMERCIAL “COMMON LAW” EVICTIONS

A1To evict a tenant from your property in any given situation can be a cumbersome and drawn out process, especially if the lease agreement is not properly drafted and the correct processes not followed.

The so-called common law eviction available to an owner or landlord applies to:

  • Evictions from property used by occupiers for commercial purposes (e.g. offices & factories). Therefore, even residential property not being used for residential purposes is also included;
  • Agricultural land which is not used by occupiers for residential purposes.

It is therefore the use of the property that is the determining factor and not the zoning of the land.

Evictions from buildings/property used for residential/dwelling purposes fall under The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act No. 19 of 1998 or the Extension of Security of Tenure Act No. 62 of 1997. These Acts are not applicable to commercial evictions.

Commercial eviction proceedings may be brought by way of action or application proceedings in the High Court or by way of action proceedings in the Magistrate’s Court. Usually, the lease agreement will provide for Magistrate’s Court jurisdiction.

It is not a requirement in a commercial eviction that the lessor/landlord be the owner of the property. An agent can therefore also act as applicant, provided he/she can prove locus standi.

If a lease agreement has been concluded between the landlord and the tenant, the lease agreement must first be cancelled before eviction proceedings can commence. The lease agreement should provide for the process to be followed. If it is a fixed term lease, regard must be had to section 14 of the Consumer Protection Act No. 68 of 2008 (“the CPA”). If section 14 does apply, the landlord must give 20 business days written notice of a breach of the lease agreement (in most cases the tenant commits a breach by failing to make timeous payment of the rental amount.) The landlord can therefore only cancel the lease after expiry of the 20 day period and upon the failure of the tenant to rectify the breach.

Section 14 of the CPA does not apply in the following instances; therefore it will not be necessary to give 20 business days’ notice of a breach before being able to cancel the lease in these circumstances:

  • If the tenant is an organ of State (municipality, state department etc.);
  • If the landlord and tenant are both juristic persons (companies, cc’s etc.);
  • Once-off leases;
  • If the tenant is a juristic person with an income/turnover above R2 million per year.

As is evident from the above, once a tenant is in breach, it is vital to act quickly and notify the tenant to remedy their breach accordingly. If proper action is taken – within the legal framework of course- the problem tenant can be evicted as soos as possible and the property leased to a new (paying) 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)

WHO ARE OCCUPIERS IN TERMS OF THE EST ACT AND WHY ARE THEY EXCLUDED FROM THE AMBIT OF THE PIE ACT?

WHO ARE OCCUPIERS IN TERMS OF THE EST ACT AND WHY ARE THEY EXCLUDED FROM THE AMBIT OF THE PIE ACT?

A1The Prevention of Illegal Eviction and Occupation of Land Act 19 of 1998 (“PIE Act”) provides, inter alia, the procedures for the eviction of unlawful occupiers. Section 1 of the PIE Act defines an “unlawful occupier” as someone who occupies land without the express or tacit consent of the owner or person in charge or without any other right in law to occupy such land. This definition expressly excludes a person who is an occupier in terms of the Extension of Security of Tenure Act 62 of 1997 (“EST Act”). Section 29 (2) of the EST Act states that the provisions of the PIE Act shall not apply to an occupier in respect of land which he is entitled to occupy in terms of this Act. Who are occupiers in terms of the EST Act and why are they excluded from the ambit of The PIE Act?

The EST Act has as its aim the provision of measures to facilitate long-term secured land tenure with state assistance. This Act grants occupiers the right to obtain a secured long-term right to occupancy with the permission of the owner, upon request on or after 4 February 1997.

Occupiers of rural land, farms and undeveloped land are specifically protected under this Act. The EST Act does not apply to, inter alia, occupiers living in already proclaimed township areas, land invaders, labour tenants and people using land for mining and industrial purposes and for commercial farming purposes. Occupiers in terms of the EST Act receive a secured right in law to live on and use the land they have been occupying, under permission, for continued periods of time. The occupier thus enjoys protection of this right and as a result such a secured right may not be unreasonably altered or cancelled by the owner or person in charge of the land without notice to, and the permission and/or consent of, the occupier. This includes protection against unfair or arbitrary eviction and, in fact, provides its own specific mechanisms for the eviction of long-term secured occupants, which must be followed.

Actions such as the removal of a right to occupancy, access to the land, water or electricity, denial of family or visitors on the said land and the prohibition of the use of the land for personal reasons are all forms of evictions in terms of the EST Act and are strictly regulated by this Act when applicable to occupiers classified under and granted rights in terms of this Act.

Many occupiers of land who do so with the proper and necessary consent and permission of the owner are not aware that they possess tenure rights to occupy such land on a long-term basis. Unless such an occupier commits a serious wrong or fails to honour any terms of the agreement with the owner, he/she may not be arbitrarily evicted in terms of any eviction process available to owners, including those available under the PIE Act. Such occupier’s rights are protected and regulated under the EST Act.

Bibliography:

  1. Prevention of Illegal Eviction from and unlawful Occupation of Land Act 19 of 1998; www.sarflii.org/za/legis/consol_act/poiefauoola1998627/ (accessed 11 March 2016);
  2. Extension of Security of Tenure Act 62 of 1997; www.justice.gov.za/lcc/docs/1997-062.pdf (accessed 11 March 2016);
  3. People Against Suffering Oppression and Poverty, PASSOP, www.passop.co.za/your-rights/housing-rights-esta (accessed 11 March 2016).

This article is a general information sheet and should not be used or relied on as 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 attorney for specific and detailed advice. Errors and omissions excepted. (E&OE)