General Interests & News Flashes – Page 21

22 Feb 2017

No shocks for the property industry in the 2017/2018 budget.

Fortunately for the property industry there were no increases in transfer duty imposed in the budget. On the contrary there was a reduction in transfer duty. In the previous year the threshold for imposition of transfer duty started at R750,000. It will now only start at R900,000. That will help purchasers at the lower end of the market.

Of more general interest, significant changes were made to various taxes. The maximum rate of personal Income Tax rose from 41% to 45%. This applies to all revenue over R 1.5 million per annum. Capital Gains Tax for individuals increased from an effective 16.4% of any gain to 18%. Capital Gains for trusts increased from 32.8% to 36%. Dividends Tax jumped from 15% to 20%. There were no changes in tax rates for companies.

The bottom line is that wealthy individuals and trusts are going to pay more Tax!

Milton Koumbatis
Director

03 Feb 2017

Miltons Matsemela – Charity Wednesdays

At MM we believe in supporting our community and as from the 1st March 2017, we will be re-instating our Charity Days

On one Wednesday per month one of our attorneys will provide oral legal advice to any member of the public at our Table View Office at a fee of R200 per 20 minute consultation in respect of any legal and/or property related matter.

For every R200 we accumulate, MM will contribute an additional R200, the total being R400 to be donated to the chosen charity of the month.

The time slots for these consultations are to be scheduled from 16h00 until 19h00 on the first Wednesday of each month.

To make an appointment, please contact Melissa on 021 521 1300 or email melissal@miltons.law.za

02 Feb 2017

Small Business Ideas For 2017

“Whosoever desires constant success must change his conduct with the times” (Niccolo Machiavelli)

The most successful small businesses are always going to be those that best adapt to change by seizing the new opportunities that it always brings.
So what’s in store for us in 2017?

For an overview of some scenarios, and for some very interesting thoughts on how we can profit from them this year, see “South African small business opportunities in 2017” on the Cherryflava website.

02 Feb 2017

Barking Dogs Driving You Batty? Noisy Neighbours and the Interdict Option

“Nuisance usually involves repeated infringement of the Plaintiff’s property rights. An objective weighing up of the interests of the various parties, taking into account all the relevant circumstances is required in these matters” (from judgment below)

If the dog-next-door’s incessant barking is destroying your quality of life, read on. A recent High Court case illustrates our law’s approach to protecting you from noisy neighbours generally.

The Chihuahua’s Tale

In a rustic township development boasting a wide variety of free-roaming wild animals (giraffe, kudu, warthog and the like), a management rule provided that no pets or farm animals were allowed in any public place, street or private property
However the owners’ committee granted special permission to a resident, who had been left temporarily homebound after a car accident, to keep a miniature chihuahua. That permission came with a warning that it could be withdrawn if complaints were received
When the neighbours did indeed complain of continual barking from early in the morning, the committee duly revoked its permission to keep the dog. It then applied to Court to interdict the dog’s owner (and his mother, a fellow occupant of the house) from keeping the dog
The Court was unable to decide a dispute around whether or not the occupants were bound by the management rule in question. Nevertheless it granted the interdict on the general principles of nuisance, commenting that the neighbours “are entitled to the peaceful and undisturbed use of their property and the enjoyment of the nature thereof” and that the occupants “may not exercise their rights of enjoyment of their property including their ownership of a pet in such a manner or fashion that it encroaches on neighbours’ (in the broad sense) rights”
However, swayed no doubt by reports of the resident’s fragile mental state (including a possible suicide attempt) the Court made the interdict a conditional one – the dog can stay provided it is kept inside the house and is not left unattended, and provided the owner takes “active steps” to ensure that it doesn’t become a nuisance to other owners.

4 things to try before you rush off to court

Taking the legal route without warning will probably be seen by the dog’s owner as a declaration of war, and there will be no winners there. So start off with a friendly approach. Aim for a win-win scenario with help from a step-by-step advice article like WikiHow’s “How to Deal With a Neighbor’s Barking Dog” here.
If that proves fruitless, a “neighbours at war” nightmare is still avoidable if you can agree on mediation or arbitration – ask your lawyer to arrange it. If you live or work in a “community scheme” like a sectional title or Home Owners Association development, apply for low-cost dispute adjudication by the new Community Schemes Ombud Services.
Or you can ask your local municipality to help by enforcing whatever by-laws it has to regulate the keeping of animals, excessive barking, unreasonable noise etc.
SAPS usually responds only to serious violations of our anti-noise laws but if you can arrange for a warning visit from a blue uniform that might solve your problem once and for all.

Going to court should be a last resort – here’s how the Judge in this case began his judgment: “It is to be deprecated that a High Court is burdened with such a dispute as the present one and it is equally deplorable that the parties cannot themselves resolve an issue of this nature”. Getting on the wrong side of a tetchy Judge is never going to be a smart move.

Whatever you do, don’t suffer in silence – our law will help you!

02 Feb 2017

Buying and Selling Property: Who Pays the Taxman?

Note: What follows is of necessity just a general summary of some complex provisions, there are various exemptions and exceptions (such as possible zero-rating of going concern sales), and many traps for the unwary. So take specific advice on your particular circumstances.

Whether you are the buyer or the seller of property, one of you is going to be paying SARS for the privilege, and you risk a very unpleasant and unbudgeted surprise if you don’t clarify before you enter into the sale exactly who is liable for what.

Both the status of the seller and the nature of the sale are key here. In broad terms –

The seller is liable to pay VAT if it is a “vendor” (registered or obliged to register for VAT) selling the property in the course of its business activities. Common examples include sales by property developers and speculators, and sales of commercial buildings. As a seller, make sure that your sale agreement obliges the buyer to pay you the VAT on top of the purchase price because VAT is deemed to be included in the price if not otherwise specified. You must pay SARS regardless of whether or not you have to dig into your own pockets to do so
The buyer pays transfer duty in all other cases, the most common examples being private sales of residential property. As a buyer, work this into your cost projections, the current transfer duty rates being as per this table –

23 Jan 2017

Friendly reminder to Agents to NOT ignore a client’s instructions!

A judgment that was handed down in the Western Cape High Court on 28 July 2016 has come to my attention, which I would like to share with you all. It highlights once again, the need for agents to ensure that they do not breach the terms of a mandate, and the severe consequences it can bring with it, when they do.

The facts of the matter are simple. An agent received a mandate to place a tenant and it was an express term of the mandate that the landlord first does his own vetting of any potential tenants. The agent showed the property to a potential tenant, did a background check, found it to be satisfactory and then gave the tenant access as it was nearly month end. The tenant signed a lease; paid a deposit as well as the rental. The agent then only advised the landlord. The landlord conducted his own background checks, found the tenant to be unsuitable, and insisted that the agent removes the tenant. The agency agreed that it would do all it could to find alternative accommodation for the tenant but after a few weeks of being unable to find alternative accommodation, the landlord (despite receiving rental) brought an urgent high court application to compel the agency to restore vacant occupation to the landlord.

The end result was a successful application against the agency. An order was granted against the agency to restore vacant occupation within 3 days of the order, and to pay the landlord’s costs.

It remains a mystery as to how exactly the agency was supposed to do this, but the “scary part” is that when the agency applied for leave to appeal this judgment, it was refused by the judge that heard this matter, and an attempt by the agency to then apply for leave to appeal to the Supreme Court of Appeal, was also refused by that court!

To make matters worse, the tenant then also fell in arrears with making payments. Because the agency was unable to persuade the tenant to move out, the landlord then brought an application for eviction which took several months. The tenant then eventually moved out. The end result for the agency is that it had to fork out tens of thousands of Rands for its own legal fees; R60 000 for the arrear rental and costs to evict the tenant and another stash of money for the landlord’s legal fees for the High Court application to restore possession.

This is a stern reminder to agents, not to ignore a client’s instructions, regardless of best intentions.

11 Jan 2017

Buying to Build in a Development? Read This

“When you’re talking about building a house, you’re talking about dreams” (Architect Robert Stern)

There are many advantages to buying a vacant plot on which to build your dream house in a property development, but there are also potential risks to be managed. Discuss the pros and cons with your lawyer before you agree to anything.

“Build, or Lose the Plot”

A recent High Court case illustrates one such danger – not building on your plot within whatever time limit is specified. Often developers will impose penalty levies for such failure (the penalties must be reasonable, but will still hurt your pocket) but in this case the defaulting buyer stood to lose the whole property –

In 2009 a buyer bought a residential plot in a large development for R560,000
A condition of the sale (recorded in the title deed) was that the buyer had to build a house within 18 months
If the buyer failed to build by the deadline, the developer could either extend the period or demand retransfer – in which latter event the buyer would get his money back, but without any interest
Twice, the property was on sold. Both times the sales lacked the developer’s permission as was required, but both times the developer regularised the sales by entering into new agreements with the buyers. The final buyer (in 2013) was a trust which had paid R840,000 to the second owner. The trust agreed with the developer to build within 9 months. The agreement was that if the buyer failed to build on time it would transfer the plot back to the developer against payment of the original R560,000 (not the R840,000 it had actually paid)
The trust failed to build within 9 months and the developer asked the Court to order retransfer of the plot to it. It offered to repay the trust the full R840,000 it had paid to the second owner – a “rather gracious gesture” said the Court since the trust was only actually entitled to R560,000.

The outcome – “Bye-bye plot”

The trust’s defences to the developer’s claim for retransfer all failed –

1. The Court rejected the trust’s argument that the trustee signed the agreement without authority on factual grounds. In any event the trust had from day one been in default of the building requirement
2. Secondly the trust claimed protection under the CPA (Consumer Protection Act)’s unfairness provisions but the Court held that there had been no contravention –
  - The CPA didn’t apply as there was no “transaction” (as defined in the CPA) between the developer and the trust, which had bought from an interim owner not from the developer; and anyway the obligation to build wasn’t “goods or services” supplied by the developer to the trust
  - Moreover, the agreement was not “unfair, unreasonable and/or unjust” – the trust wasn’t forced to sign, it understood what it was committing to, it was in a position to build, and there was no suggestion that the 9 month building period was unfair
3. Finally, the Court rejected the argument that the agreement violated public policy or was “contra bonos mores” (against good morals), commenting that “in general ….. parties should comply with contractual obligations that had been freely and voluntarily undertaken”.

The trust was therefore ordered to retransfer the property to the developer. It loses the plot itself, all capital appreciation in it, and 3 years’ interest on its R840,000

11 Jan 2017

Signing Surety – The Sting’s in the Tail

“She just did not want to be liable if he defaulted, a common regret felt by those who stand surety for defaulting debtors” (extract from judgment below)

In the beginning ….. You are totally relaxed. The bank won’t give your son/daughter/spouse/partner/company/friend a loan unless you sign surety and, as always, it seems perfectly safe at the time. So you ask yourself “What’s the harm? It’s just bank red tape. Johnny’s new business will fly. He’ll pay back every cent to the bank and I’ll have helped him. That’s a parent’s job isn’t it?”

But in the end ….. You get stung. Your signature comes back to haunt you, because our law will generally hold you to what you sign, with very little wriggle room.

A recent High Court case illustrates.

The mother, the son and the suretyship

A mother signed an unlimited suretyship as “co-principal debtor” for her son’s bank debts totalling almost R4.8m from a home loan, an overdraft, and a credit card account.
After her son’s estate was sequestrated the bank sued her for the shortfalls.
The mother tried everything she could to evade liability. Her main defence was an attack on the validity of the suretyship, and she supported this with a string of claims, often self-contradictory. The bank official had misled her into thinking that she was signing not a suretyship but simply a consent form for an account migration. She hadn’t read the document. She had read the heading. Blank spaces in the document were filled in later. It conflicted with an oral agreement. It was limited not unlimited. Her signatures on other documents had been forged.

Let the signer beware – “I signed by mistake” won’t cut it

This defence, said the Court, amounted to a mistake on the mother’s part in signing the document. That’s a defence that our law won’t accept unless you can show that your mistake was both material and reasonable. You will have to prove that you had no intention of entering into the contract and that you were misled by a misrepresentation as to the nature of the document, or as to its terms.

Our law strongly presumes that if you sign a document you intend to enter into the transaction it contains, and the principle of “let the signer beware” (“caveat subscriptor” to the legal fraternity) makes it difficult to succeed with any form of “I signed by mistake” defence.

On the facts of this case the Court rejected the mother’s version of events as false, found that she knew exactly what kind of document she was signing and indeed intended to stand surety, and ordered her to pay the bank in full plus interest and costs on the attorney and client scale.

11 Jan 2017

Stick to Your New Year Resolutions with stickK.com

Whether we’re talking about your business or your private life, sticking to your goals and resolutions can be as hard as it is important. Multiply (x3) your chances of succeeding with the free goal-setting platform stickK.com (the “K” stands for the Commitment Contract you enter into).

In a nutshell –

It was created by behavioural economists at Yale University and is specifically structured to help you leverage the power of incentives and accountability.
It works by providing you with the tools you need to fight back against human nature. You use the psychological power of loss aversion and accountability to drive behavior change.
You create your own custom plan-of-action for how you’re going to turn your goal into a reality by defining your goal, picking a timeline to accomplish it, and putting something at stake (whether it’s money or your reputation). You effectively enter into a wager with yourself, and pay for your transgressions.
You can appoint Referees and Supporters to help you along, and you can join Communities of others with similar goals.
Businesses can create Corporate Accounts to assist employees, reduce health costs and increase productivity.

Read the Privacy and Security page before signing up.

30 Nov 2016

Domestic Workers’ Wages up 1 December 2016

This year’s new minimum wages for all domestic workers are set out in the table at the end of this article.

Who is covered?

All domestic workers in South Africa working in a private household
People employed by employment services
Independent contractors who are doing domestic work
A person doing gardening in a private home
People who look after children, sick or old people and people with disabilities in a private home
A person driving for the household

But excluding –

Domestic workers employed on farms
Domestic workers employed in activities covered by another sectoral determination or bargaining council agreement (such as contract cleaning workers).

Are you in Area A or Area B?

Area A includes most major metropolitan areas; Area B is all other areas. See the full lists on the Department of Labour website

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