Archives: General Interests & News Flashes

“Learn from the mistakes of others. You can’t live long enough to make them all yourself.” (Eleanor Roosevelt)

Here’s the story of yet another bitter dispute between neighbours over the loss of a treasured view.  The setting this time is a group housing development which was specifically designed to give each and every house views of both the sea-shore and of Table Mountain.

Front row v Back row: A sad tale, and a warning

Buying a property for its stunning views and sunny aspect is a great idea, but only if you do your homework properly.  A new High Court decision highlights the downside of getting it wrong –

• A sea-facing development in Cape Town contained two rows of houses –
  • A front row of single-storey houses
  • A back row of double-storey houses.
• Two front row owners decided to convert their houses to double-storey, and their building plans for the conversion were approved by the municipality.
• Unsurprisingly, the back row owners who stood to lose their views took fright and applied to the High Court for the municipality’s plan approval to be reviewed and set aside.  When their application was refused, they appealed to a Full Bench.
• They lost again, the Full Bench dismissing their appeal.  Unless they fund a further appeal they are stuck with watching helplessly as the neighbours’ builders deprive them of both their views and their sunlight.  Their panoramic vistas across Table Bay will it seems give way to damp, moisture and mildew – not to mention a substantial drop in their houses’ market values.

What to watch for – a checklist

The judgment, in discussing the various arguments unsuccessfully relied on by the back row owners, provides a handy checklist for prospective buyers –

• Always check the local zoning scheme – in this case for example the area’s height restriction was three storeys, which should have been a clear warning to the back row owners to investigate further.
• What counts is enforceable legal rights, not promises and good intentions.  The developers and architects told the Court that in designing the development the “sacrosanct fundamentals” were to ensure that all the houses would have access to both views and “maximum light penetration”.  Critically however they failed to translate these intentions into legal obligations.  They could, said the Court, have formally restricted the front row houses to a single storey limit by using legal options like –
  • The imposition of a servitude,
  • Restrictions on the title deeds,
  • A specific site development plan imposing a land use condition, or
  • Registration of a homeowners’ association.
• If you are buying into a group housing scheme, don’t rely on the fact that it must be “planned, designed and built as a harmonious architectural entity”.  This concept, held the Court, doesn’t give you any rights to a view, privacy or light.
• Equally, don’t put yourself in the position of having to prove any of the factors that would cause a municipality to reject building plans.  These include factors like the building will be “dangerous to life or property”, or will “disfigure” the area, or will be “unsightly or objectionable”, or will “derogate from the value of adjoining or neighbouring properties”.  None will be easily proved.  For example there cannot, held the Court, be a derogation of value solely based upon a loss of view when the alteration complies with the law “unless the nature or appearance of the building are so unattractive or intrusive that it exceeds the legitimate expectation of parties to a hypothetical sale”.
• Indeed, if you are going to rely on having bought with a “substantive legitimate expectation” of your view remaining intact, make sure you keep proof.  In this case, for instance, one of the affected owners testified that before buying her house she had undertaken a “due diligence investigation” by contacting the City and being advised by an official of the Planning and Development Department that the front row houses could not be converted to double-storey.  But she could not recall the official’s name and the Court rejected her justification as vague and non-specific.

The bottom line is this – before you buy, have your attorney check that your views, privacy and access to light will be protected by enforceable legal rights!

Where there’s a will, I want to be in it – (Anon)

Whether you are young or old, healthy or ill, single or attached, you should have a Will. Without one, you die “intestate”, which means you forfeit your right to decide who inherits what, who administers and distributes your estate, and who looks after your children and their money.  You owe it to your loved ones to spare them the inevitable financial and personal risks.

So if you don’t yet have a will get one drawn up immediately.

Here’s a practical guide to making sure that it will protect and provide for your loved ones properly.

Do it properly with a professional

Don’t be tempted to use a template Will or to copy a friend’s; there is just too much at stake here to take any chances.  Apart from all the legal formalities involved, there are a multitude of practical considerations that all call for professional help.

Badly drawn Wills risk outright invalidity, reduced tax and estate planning efficiency, confusion, doubt and dispute – our law reports are replete with bitter and costly family feuds that would have been avoided with a properly drawn and executed Will.

Appoint the right executor/s

Your estate will be administered and distributed by an executor or executors.  If you decide to nominate a non-professional such as your spouse, he/she will need professional assistance so consider appointing a specialist as joint executor.  Choose someone you can trust to act with absolute integrity and professionalism – you will no longer be around to keep an eye on them!

A practical plan for your loved ones

Firstly, all your bank accounts and other assets will be frozen when the executors take control and deceased estates take a long time to wind up.  So check that your dependents will have enough on hand to tide them over for at least several months’ worth of living expenses. Take advice on how best to do this – common solutions include separate bank accounts and investments, life assurance policies that will pay out directly to dependents on your death, and family trusts.

Secondly, when you die your family will be in shock. Help them through the stress and anxiety of bereavement by keeping a file with everything listed below:

• Right in front put a list of the names and contact details of everyone you can think of who your family can and should turn to for support and advice – your lawyer, accountant, tax adviser, insurance broker, medical aid specialist, doctor, financial adviser, investment manager, bank contact, employers, employees, business partners and so on
• Next, a copy of your Will and contact details for your executor (who should keep the original Will in safe custody)
• If you have particular wishes in regard to funeral arrangements, cremation etc, leave a signed directive giving details (or referring to any instructions in your Will)
• Medical aid details and details of any funeral policy
• Copies of ID documents – for you, your spouse, your children, other dependents or heirs, guardians etc
• Important family documents like marriage certificates, ANCs, cohabitation agreements, divorce orders and so on
• A full list of your assets (give detailed descriptions of any important assets, and don’t forget full details of any loans made to family members) and your liabilities
• Details of all bank and savings accounts, credit cards, investments, life policies, pension funds, retirement annuities and the like
• Information on entities like companies and trusts in which you or your family have any interest or involvement
• A list of all monthly recurring liabilities, debit orders etc
• Important documents relating to your assets and liabilities – title deeds, vehicle registration papers, rental agreements, loan agreements, insurance policies, tax returns, tax records – really anything your family or executor may need to access quickly and easily.
• Notes on the location of things like safes, spare key boxes, security documents, firearm cabinets etc, and of the keys or codes needed to access them (see under “Passwords” below for ideas on doing this securely
• A note on how to access passwords, PIN numbers and access codes, which are a big issue in our electronic age but often overlooked.  Don’t make that mistake – your loved ones will need access to your computers, your cell phone, your online accounts, your email, your online payment portal, your Social Media pages and so on.  For some ideas on how to do this securely read “Making Life Easier for Your Heirs in a Digital World” on Siller & Cohen’s website.  If you use a password manager like LastPass www.lastpass.com look for functions like “Emergency Access” to share your passwords with your heirs, and “Secure Notes” to share information like PINs, safe and alarm codes, location of keys etc
• Anything and everything else your loved ones or advisers may need to know about – ask them if they can think of anything to add.

Where your file contains copies of documents rather than originals, say clearly where the originals are kept.

Put your file somewhere safe then tell everyone where to find it and how to access it (it’s no good telling them it’s in your safe if they don’t know where to find the safe key!).

Diarise regular reviews

All sorts of life events – marriage, divorce, deaths, births, adoptions, retirement, new family circumstances and the like – call for amendment of your Will.  So diarise regular reviews and again take full professional advice on how to make any changes both validly and to best advantage.

Did you know that even as the owner of a house, you could still be evicted from it as an “unlawful occupier”?

That could happen if, to take one example from a recent SCA (Supreme Court of Appeal) matter, you give someone else a right of habitation (“habitatio”).  But why, you may ask, would you do that?

Useful tools for property owners

Our law provides you with a range of useful tools to make the most of your property, including several different types of occupational and usage rights. For instance you will come across terms like “usufruct”, “usus” or “habitatio”.  The distinctions between them are fine and not important for now, but what is important is that you don’t use any of them without getting specific advice on which – if any of them – will suit your particular needs.

How might you use these tools? Consider these two examples:

1. You could – perhaps as an estate planning exercise – bequeath your house to one of your heirs, subject to a lifelong usufruct in favour of your spouse so that although he/she won’t actually own the house after your death, he/she can still live in it for life.
2. Or you could sell your house to someone else but retain for yourself the right to remain in residence for life.

From bitter family feud to eviction application

The facts in the SCA case were these –

• A mother sold her house to her son, subject to a lifelong right to live in it via a right of habitation.  This was registered against the title deeds – an essential step in making a servitude like this valid and enforceable against all-comers
• The son subsequently married in community of property, so thereafter the house  belonged jointly to him and his new wife
• The mother, son and daughter-in-law lived together in the house for many years
• The son eventually moved out after divorcing, and relations in the house deteriorated to the extent that the mother temporarily fled the house and obtained a family violence interdict against the (now ex) daughter-in-law
• The ex-daughter-in-law denied everything and said the mother was welcome to return at any time to live with her in the house.  Naturally enough the mother declined, and applied instead for an eviction order.

Who’s in charge?

Now our law requires that to evict an occupant you must comply with PIE (the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act).  PIE requires that you prove either that you are the owner of the property or that you are the “person in charge” of it.

In this case of course the owner was the ex-daughter-in-law.  But, held the Court, “where someone other than the registered owner is the ‘person in charge’ (i.e. the person with the right to determine who stays on the property), it is the consent of such person rather than the registered owner which is . . . relevant”.

Finding on the facts that the ‘person in charge’ was the mother, that she alone could give permission to live in the house and that she hadn’t given her ex-daughter-in-law any such permission (any previous implied consent having been withdrawn), the Court held that the ex-daughter-in-law is indeed an “unlawful occupier” and therefore subject to an eviction hearing.

In other words, a registered right of habitation trumps the owner’s rights of occupation to the extent that the owner can be evicted from his/her own home.

You buy a plot in a residential development and the developer agrees to build you a house to stated specifications and plans.  You pay in full for the plot and it is transferred into your name.  All good so far.

But then you fall out with the developer over the costs, finishes and other specs for the building work. What happens now? A High Court case illustrating a particular danger for both developers and buyers revolved around these rather unusual facts:

• A buyer bought a piece of land and, as part of the sale agreement, chose to have built on the plot a house (one of five standard types of house offered by the developer).
• A significant twist here was that, unnoticed by either party, the sale agreement had never been signed by the seller, only by the buyer.
• Transfer of the plot to the buyer went through smoothly, but when it came to building the house, the buyer asked for additions and alterations to the standard specs.  He was unhappy to note that the quote for these deviations included an additional “modification fee” of R110,000.
• The buyer was having none of that and refused to agree, whereupon the seller purported to cancel the whole agreement.
• Again the buyer was having none of that and sued to keep his plot and to force the developer to build his house.  The developer in turn demanded its land back.

Question 1: Can the developer get its land back?

You will know that in our law a sale of land agreement is one of the few that is only valid if in writing and signed by both seller and buyer (or by their authorised agents).  So you cannot force transfer to proceed on an unsigned sale agreement.

But what happens if, as in this case, transfer has taken place anyway?  What is not widely known (and perhaps seems a bit strange at first blush) is that, if the buyer pays in full and the parties intend ownership to pass at the time, the transfer is valid.  A finalised transfer cannot be rolled back just because the sale agreement wasn’t in writing and signed.

The parties in this case for example didn’t even notice the lack of signature and the buyer went ahead and paid in full for the land.  So the plot was validly transferred to the buyer and the developer can’t get its land back.

Question 2:  Can the buyer force the developer to build his house?

This sale agreement, held the Court, was not a contract for sale of a house, it was “two notionally separate contracts: one for the sale of land and one for the construction of a dwelling on the land. It is only in relation to the contract for the sale of land that the formality of signature is required.”

Consequently the developer was ordered – per the unsigned agreement – to build the buyer his standard house, without the additions/alterations and without the disputed “modification fee”.

Buyers

Plot and plan contracts are by their very nature complex, so as always, agree to nothing – verbally or in writing – without full legal advice!

Developers

Make sure your plot and plan agreements are tightly drawn, and properly signed, to avoid the sort of scenario above – you run enough risks without adding to them unnecessarily!

“You can’t fight city hall”

(old idiom decrying the futility of trying to fight a bureaucracy)

You challenge the accuracy of a services account from your local municipality, thus:  “Your meter must be wrong, no way was my consumption that high”. The reply: “We’ve tested the meter and it works fine. Pay up or face disconnection”.

Off to court you go. Can you “fight city hall” and who has to prove what?

There’s good news here for consumers in a recent High Court decision dealing with just such a situation.

The R4.5m water claim and the disconnection

• A municipality installed a new water meter at commercial premises
• When read for the first time 18 months later, it showed a spike of 13 times the historic average consumption measured by the old meter
• Alarmed, the consumer requested that the meter be tested. The municipality duly removed it, tested it, reported that it functioned correctly, and then (for an undisclosed reason) disposed of it.
• A third meter was installed. Although the consumer’s business had by then grown substantially, water consumption was shown at three times less than the quantities measured by the previous meter.
• The consumer had paid the water account according to its own calculations. Nevertheless disconnection of supply followed, and then the municipality refused to issue a clearance certificate when the property was sold. In all the consumer was forced to make two payments totalling R16.5m, which it did under protest and with reservation of rights
• Sued by the municipality for just under R4,5m, the consumer defended the action and counterclaimed for R9.5m (the amount it claimed to have overpaid).

Who must prove what?

Finding in favour of the consumer, the Court held that, once the consumer had raised a bona fide (“in good faith”) dispute, the onus was clearly on the municipality to prove that the meter had measured the water supply correctly and accurately.

That, held the Court, it had failed to do – its expert evidence concerning the testing was found to be unsatisfactory and insufficient.

The end result is that the municipality has to repay the consumer R8m – a substantial victory.

Consumers – a critical factor

Note that a critical factor here was that when the consumer made the two disputed payments to the municipality it did so under protest, without waiver or abandonment of any rights and without admission of liability that the amount was due. Without those provisions, the onus would probably have been on the other foot, i.e. on the consumer to prove that the readings were not accurate. That’s often going to be a near-impossibility when only the municipality has the legal right to test its meters and when it has control of all consumption data. So pay nothing on a contested account without legal advice.

Municipalities – what you must prove

Make sure you can prove that meter tests comply fully with all prescribed requirements. And (this of course should go without saying) don’t dispose of any contentious meters until litigation has been well and truly put to bed!

Bad neighbours don’t just impinge on your enjoyment of your property; they can also cause serious harm to its value.  So if you notice illegal building activity next door, move quickly to nip the problem in the bud.

Your hand in this regard has just been strengthened. An important new decision by the Supreme Court of Appeal (SCA) confirms that you aren’t limited to trying to compel the municipality to enforce its own building and zoning laws – you can apply for demolition directly.

Demolition ordered – despite a “supine” municipality

• A new retail/office development exceeded the local Town Planning Scheme’s coverage limit of 60% (the actual coverage as constructed was 86.13%), and insufficient parking bays were provided
• The developer claimed to have obtained municipal approval of its building plans but the “supine and uncooperative attitude of the municipality” made it difficult for the Court to determine any more than that, if the municipality had indeed given approval, it seemed later to have cancelled it
• In any event, held the Court, any such purported approval of the plans had to be set aside and the developer was ordered to partially demolish its building so as to bring it into compliance with the law.

First prize, second prize

The SCA has cleared the way for neighbours themselves to apply for demolition orders. That’s an important new weapon in the fight against illegal construction activity, but it’s still only second prize.

The problem is that where you (rather than the municipality) bring the demolition application, “private” or “neighbour” law applies and the court is not obliged to order demolition; it has a discretion whether or not to do so. And, demolition being a draconian remedy, the court may rather decide to make an alternative order such as a damages award. Indeed, had the developer in this particular case not incurred the court’s wrath by persisting in its illegal conduct after ignoring warnings of illegality, it might have escaped demolition altogether.

In contrast, where a municipality does its job properly and brings its own application for demolition, “public law” applies and our courts have previously held that they then have no discretion where unlawful buildings are concerned – they must order “total demolition”.

First prize it seems is still to force your municipality to fulfil its legal and moral duty to uphold the law by taking the offending builder to court itself.

Regardless, the most important thing is to act quickly – so get legal help as soon as you become aware of illegal construction!

1. Your will
Everyone should have a will. Even if your assets are few in number or low in value it makes things very much easier for those left behind who have to look after your affairs.

2. What is a will?
A will is document in which the person making it (the testator) disposes of his/her assets after his/her death.

3. Who may draw my will?
You may draw your will yourself or you may ask someone to draw it for you. Please remember though that a will is a legal document. Several institutions offer to draw your will at a low charge. Always be aware however that they are not practicing attorneys. In the same you would consult a doctor for medical treatment, so too you should consult an attorney for legal assistance.

4. What is an executor?
An executor is a person appointed by you to administer your estate and dispose of your assets after you have passed away. You may appoint anyone you like. Our advice is that you appoint a close family member such as a wife or son/daughter or your family attorney. The reason for this is that your estate will then be dealt with on a personal basis by persons who are involved and know your views. Institutions tend to deal with matters at head office in an impersonal manner.

5. May I change my will?
You certainly may. In fact we advise you to take a look at your will on a regular basis – say once a year – to make sure it is the way you want it. Circumstances may change within your family or work environment and your will should be adapted accordingly. You may change your will either by drawing a new will or by drawing a codicil, which is an addendum to your existing will.

6. Who may administer my estate?
The executor appointed in your will is required by law to administer your estate in terms of the estate act, which sets out the administration procedure. Your wife/husband or son/daughter will probably not have the necessary knowledge or expertise to carry out these duties. This is
where our estates department will assist you. We have the necessary specialized skills and experience to carry out the administration duties promptly and efficiently. We do this on a personal basis making sure that your executor is consulted and kept posted at each stage of the proceedings.

7. What happens if i die without leaving a will?
There is a common misconception that if you die without leaving a will your assets will go to the state. This is very rarely so. The intestacy act makes provision as to who inherits your assets on intestacy. I.e. Dying without a will. It is usually the surviving spouse and children who inherit under these circumstances. However if there is no will there may be delays in appointing an executor and your cash assets will be frozen pending the appointment.

Also, your assets may then devolve on persons you may not have wanted to inherit. In addition the cash inheritance of any minor child will be paid into the guardians fund at the masters office whereas you may have wished such inheritance to be invested by your executor for the best return.

8. What is estate planning?
Estate planning involves the preparation of a plan during your lifetime to deal with your assets when you are no longer there. The purpose of estate planning is to ensure that the process of administration proceeds without unnecessary problems, and, more importantly, to leave your dependants properly cared for. Everyone therefore should undertake at least some elementary estate planning. Estate planning can be relatively simple involving only taking out life assurance and making a will. However your estate planning may need to be more comprehensive, possibly including the establishment of trusts during your lifetime which will enable you to peg values and thus ensure tax savings.

9. Trusts
As mentioned above one may need to establish a trust during one’s lifetime (an inter vivos trust) and transfer certain assets to it. A trust is a separate legal entity and there are usually three separate role-players in the trust, namely:

• The founder – yourself
• The trustees – usually yourself and other family members,
• The beneficiaries – those who are to benefit from the trust.

A trust may also be created in your will. This is known as a testamentary trust or mortis causa trust. To ensure good planning you may wish to leave certain assets in the hands of trustees to administer for certain purposes and certain periods. This quite commonly occurs where you leave minor children and do not wish their cash inheritance to be paid over to the guardians fund referred to above.

Andrew Murray
Director: Conveyancing/Estates/Notary