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31 Jan 2018

THE CITY OF CAPE TOWN’S DRAFT WATER AMENDMENT BY-LAW OF 2017

The City of Cape Town is in the process of amending the current water by-law. The amendments are quite far-reaching. Here is a summary of the amendments that I feel are most important for us to know about.

1. AMENDMENTS TO SECTION 14 – THE WATER CERTIFICATE OF COMPLIANCE

The format of the certificates should become simpler, but the requirements for issue will be more onerous. The certificates will now only have to certify that water installation conforms to the National Building Regulations and Building Standards Act (Act 103 of 1977), and the City’s by-law. In the previous by-law, there was no specific requirement of compliance with the Building Standards Act.

The certificate will now have to be issued by a plumber who is registered with the City. There will be more about the registration of plumbers later in this article.

Any person who provides false information on a certificate will be guilty of a crime and may be prosecuted. On conviction, the guilty party would be liable to a fine or a prison sentence, not exceeding five years.

2. AMENDMENTS TO SECTION 28 (20) & (21) – METERING OF WATER SUPPLIED

Previously, the City could have provided multiple water connections to a property which had more than one accommodation unit. This is now no longer the case. Only one connection will be supplied. It is now the obligation of the owner of the property, or the person in charge of the management of the property, to install and maintain an isolating valve, along with a water management device or prepayment meter or private sub meter on all branch pipes providing a supply of water to the different accommodation units. The owner of the property will remain liable to the City for the water supplied through the primary water connection.

Section 28 is also amplified. Where a property has different units, and where the water supply to these different units is being metered with separate private sub-meters, the owner of the property or the person in charge of the management of the premises needs to monitor and record the monthly water usage of each individual unit. These records must be kept for at least 24 months.

Such person must also report water usage which exceeds water restrictions or usage limits within 21 days. The purpose of this reporting is to enable the City to take enforcement steps against the owner or the person in charge of the relevant unit to prevent this transgression.

3. AMENDMENTS TO SECTION 34 – WATER LEAKS

The current by-law provides that an owner is not entitled to a reduction on the water account for water wasted or lost due to visible leaks. A reduction will only be allowed for underground leaks, and this would be only if the leak fell within the category specified in the City of Cape Town’s Tariff Policy.

I have looked at the City of Cape Town’s Tariff Policy with regard to rebates for water wasted as a result of leaks and it makes for interesting reading.

The Tariff Policy would exclude leaks on plumbing to convenience fixtures such as irrigation systems, automatic filling systems to ponds, pools, fountains, etc. where the disconnection of these systems from the primary erf plumbing installation would have prevented the water wastage in the first instance. The Tariff Policy also makes provision for the cost of the wasted water to be shared equally between the City and the property owner, so the owner will always have to pay half. The cost of the water, will however be calculated at the bulk water cost plus the estimated actual distribution cost. The City will therefore not make a profit off the wasted water. The rebate on the cost of the wasted water will also only apply for the period covering the last three municipal bills, which bills were based on actual readings. The City believes that you should have noted the excessive water use and taken steps to fix the leak within this period.

An owner is limited to one rebate claim in respect of each property that he owns. The rebate will also be made conditional on the owner applying for and paying the fee for the installation of an activated water management device to reduce the risk of further water losses from leaks.

4. AMENDMENT TO SECTION 35 – SPECIAL MEASUREMENT (OF WATER USAGE)

In section 35 of the current by-law, the City already have the power to force an owner to allow the installation of a water measuring device at any place in the water installation. The purpose of this would be to ascertain the quantity of water which is being used in that specific part of the water installation. This section will now be expanded to allow the City to install a prepayment meter at any such point.

5. AMENDMENT TO SECTION 36 – WATER RESTRICTIONS

Section 36 of the current by-law deals with water restrictions. It gives the City the power to prohibit or restrict the consumption of water and to invoke special tariffs. These restrictions may be of general application, or they may be specific to certain times, parties, places or activities.

The proposed by-law now allows for water restrictions to be imposed in terms of the Disaster Management Act, where a local disaster has been declared due to a scarcity of water or in an effort to prevent such disaster from being declared. The by-law also makes it a crime to fail to comply with water restrictions that might be imposed in accordance with this Disaster Management Act. People found guilty of non-compliance will be liable to a fine or to a period of imprisonment not exceeding six months.

6. AMENDMENT TO SECTION 38 – WATER CONSERVATION AND DEMAND MANAGEMENT

Section 38 of the current by-law obliges owners and consumers to comply with the good water conservation and demand management practices as contained in Schedule 1 to the by-law. Schedule 1 also makes for interesting reading. The current by-law already prohibits many wasteful practices, including the watering of a garden using potable water between 9 am and 6 pm and hosing down hard surfaced areas using water from a potable source. It also prescribes that water that is available in public facilities for hand washing and showers must be provided with demand type taps. The current schedule also limits the maximum flow rate of any showerhead to 7 litres per minute and any hand wash basin to 6 litres per minute. The new by-law proposes limited changes to this schedule. These changes are:

  • a hose pipe used for irrigation purposes must be fitted with a controlling device such as a sprayer or an automatic self-closing device at the hose end;
  • Automated sprinkler systems must be able to be correctly positioned, and be able to be adjusted to prevent water wastage;
  • the holding capacity of new or replaced toilet cisterns has been reduced from 9 litres to 6 litres;
  • automatic flushing systems to urinals may be replaced with waterless systems that must be properly maintained; and
  • all swimming pools must be covered by a pool cover to avoid evaporation when not in use.

7. AMENDMENT TO SECTION 42 – PLAN APPROVAL PROCEDURES

In section 42 of the existing by-law, an owner who wished to install the new water installation already needed to submit plans for scrutiny. The proposed by-law will now make it mandatory for an owner to obtain planning approval for any extensions which a person might want to make to an existing water installation.

These plans for extensions to existing water installations must meet the same requirements as those for a new water installation. They must disclose full details of any water conservation and demand management systems or alternative water systems such as a greywater system, treated effluent, surface or groundwater system, air conditioner or bleed off for flushing toilets, irrigation, swimming pool filling or top up or other non-domestic purposes. While I am uncertain as to what all of these requirements relate to, it would appear that the plans for the proposed extensions to the water installation need to be quite comprehensive. In terms of the existing by-law the plans must also include a schedule of each type of terminal water fitting (a device for controlling the discharge of water – usually a tap) and its nominal size. The proposed by-law requires the plans to disclose the number of terminal water fittings to be installed.

A major amendment to the existing by-law is found in subparagraph 42(6) of the proposed by-law. This section requires all new developments to provide for the installation of alternative water systems for non-domestic purposes and full details of this alternative water system must accompany the building plans. Alternative water is water sourced from a supply other than the municipal drinking water supply and includes greywater, rainwater, treated effluent, surface water and water from a borehole, well, well point or spring. This alternative water system must supply water for “non-domestic purposes.” Water for “domestic purposes” is defined as water for drinking, ablution (washing your body) and culinary (cooking) purposes. Non-domestic purposes would therefore include water for irrigation. It might also include water for a washing machine or dishwasher or for filling up your swimming pool.

The new section 42(7) places an obligation on an owner of a property to notify the City when you install or when you change a fixed water heater, a heat pump installation or a solar hot water panel. Clearly the City wants to know more about what you are doing as far as your water installation is concerned.

8. AMENDMENTS TO SECTION 46 – UNAUTHORISED WORK (AND TEH REGISTRATION OF PLUMBERS)

The proposed by-law includes new sections numbered 46A, and 46B. These deal with the registration of plumbers. In terms of these sections, the City will maintain a register of qualified plumbers who are qualified and accredited in terms of the National Qualifications Framework Act (Act 67 of 2008). Plumbers registered in terms of the by-law are obliged to ensure that work done by them complies with the by-law. They are obliged to submit a certificate of approval for work done in installing a new installation or making an extension to an existing installation. This certificate must confirm that the work was carried out in compliance with the by-law. The plumber must submit the certificate to the City and furnish a copy to the property owner.

The City will maintain a register of plumbers, which will be published, presumably on the City’s website. A plumber’s registration can be cancelled if he fails to comply with the by-law or if he falsely or misleadingly issues a certificate of compliance or if he allows his or her registration details to be used in a fraudulent manner.

All plumbers who are qualified and accredited in terms of the National Qualifications Framework Act are entitled to carry out the installation or the extension of the water installation at a property. Only plumbers who are registered with the City are however able to issue certificates of compliance. For this reason, I believe that all plumbers in the City will apply for registration.

Section 48 of the proposed by-law confirms this view. It provides that property owners must ensure that plumbing work is carried out by qualified plumbers and that certificates of approval are provided to the City for newly completed or altered water installations. These certificates can only be provided by registered plumbers.

A plumber will have to pay to be registered with the City. While this by-law might make the provision of plumbing services more professional, I have no doubt that it will increase the costs of plumbing services. There will now be a whole new level of administrative compliance that a registered plumber will have to conform to, and this will take time and cost money.

9. AMENDMENTS TO SECTION 49 & 53 –STORAGE TANKS

In section 49 and 53, the existing by-law already provides for the hygienic maintenance of water storage tanks on a property. These tanks must be drained, inspected and disinfected at least once every five years in accordance with the standards and procedures published in a South African National Standards document (SANS 10252).

The proposed amendments to the by-law merely updates the compliance to the latest version of the SANS document.

The manner of installation of these storage tanks is also prescribed.

While on the issue of storage of water it is noteworthy that section 52(1)(d) & (e) of the current by-law already makes it compulsory for certain owners of buildings to store a minimum quantity of water on the premises.

Section 52(1)(d) refers to water for purposes other than firefighting or air conditioning. The total amount of water required to be stored is as follows:

  • For hospitals, clinics, old age homes or other facilities from which the occupants cannot readily be moved – 250 litres for each bed the building is designed to accommodate;
  • Educational institutions – 40-50 litres per capita;
  • Multiple dwelling units exceeding 3 stories – 135 litres per dwelling unit;
  • Hotels, boarding houses and hostels – 90 litres for each person the building is designed to accommodate;
  • Restaurant kitchens – 8-12 litres per meal prepared;
  • Hairdresers and dentists – 4 hours demand per day;
  • Industry – 8 hours demand per day;

Section 52(1)(e) refers to water for flushing toilets in commercial and industrial premises. The total amount of water required to be stored is as follows:

  • Commercial premises including shops and offices – 70 litres for every 100m² of gross floor area;
  • Factories – 5 litres per capita;
  • Super stores (such as Hyper markets) – 125 litres per toilet or 600mm of slab urinal;
  • Educational institutions – 5 litres per capita.

While the drafting of these sections leaves a lot to be desired, these requirements do apply to all buildings built since the promulgation of the first water by-law in 2011. I can’t recall ever seeing this type of water storage facility in new buildings of this nature, but then I have not specifically looked for one. The question arises whether a tenant of such a property that was built after 2011 can insist that the landlord installs such a storage facility? It could come in quite handy if we do get to day zero, when the water runs out. If the city has not been enforcing this part of the by-law this might be one of the factors why certain buildings and certain areas will continue to receive a water supply after the water has technically run out.

10. AMENDMENTS TO SECTION 54 –PREVENTION OF POLUTION OF WATER

In section 54, the current by-law deals with the prevention of pollution of water, and provides for measures to be taken to prevent the water supply becoming contaminated. The new by-law expands on this for properties where there is a supply of potable water from the municipality and a supply of alternative water. In terms of the new by-law, the two water supplies must be completely separate, with no interconnection at all. The alternative water supply must also have pipework of a different colour to the potable water supply, and it must be properly labelled.

What this section means is that you will now no longer be able to feed “alternative water” into your current irrigation system that was designed to run off the municipal supply. You will have to create a whole new installation to use this water in your garden. In addition, if you have a filtration system that filters groundwater to drinking water standards, you cannot feed this water into the water installation used for the municipal supply of potable water. Once again, you will need a duplicate installation to all the points where you intend to use the filtered groundwater. If strictly applied this will be a major headache for many property owners who are using the same water installation to distribute both municipal water and water from another source.

But please read on, as there may be a way to get around this revised section 54.

11. MISCELANEOUS PROVISIONS

Section 56 of the existing by-law deals with the use of water from sources other than the municipal water supply. The current by-law prohibits the use of any water, other than water obtained from the municipal system, for domestic use. The proposed amendment allows water from alternative sources to be used for domestic use, but you need to apply for permission first.

The current by-law also prevents water from an alternative source being distributed through an existing water distribution system without permission. This is repeated in the new by-law.

This appears to contradict the proposed new section 54 in that it seems to allow alternative water to be distributed through the existing installation if you obtain permission for this from the City. I am sure many people will be making applications of this nature in the near future, as the use of water from alternative sources becomes more popular.

An owner of the premises on which an alternative water source is located must also provide information to the City about this water source. This could include certificates of analysis and bacteriological investigations which will have to be acquired by the owner at their own cost. Failure to provide this information might result in the City withdrawing its permission to allow the domestic use of this water.

In the newly proposed subsection 56(7)(a) the consumer assumes full responsibility for consequences of the use of water which is not from the City’s water supply system. In subsection 26(7)(b) this position is restated from the City’s point of view and confirms that the City bears no responsibility or liability for the use of water, not from the City’s water supply system. The position is therefore clear. You use water from an alternative supply sources at your own risk.

12. WELLS, BOREHOLES, WELL POINTS AND EXCAVATIONS IN CLOSING…

Section 57 deals with wells, boreholes, well points and excavations. The proposed subsection (d) requires all owners with any well, borehole, well point or alternative water installation on their premises to register themselves on the City’s database. Subsection (e) goes on to require these owners to use this water sparingly and efficiently, and when used for irrigation purposes, in line with the watering times laid down by the Water By-Laws of the City. It would appear therefore, that if this by-law comes into force, and if the watering of gardens is prohibited by the City, owners of well points or boreholes will not be able to use this water to irrigate their gardens either.

Section 58 of the existing by-law prevents the digging of well points or boreholes without first giving no less than 14 days’ notice to the City. If the owner intends discharging any of this water into the City’s sewers, the owner must meter the water abstracted from the well point or borehole.

IN CLOSING…

  1. A lot of the hype surrounding this proposed amendment to the existing by-law is not merited as many of the “controversial” provisions are already law as part of the existing by-law. The aspects of the proposed by-law which I believe merit most attention are:
  2. The additional requirements for the issue of the water certificate of compliance;
  3. The requirement that work done on extending an existing plumbing installation is to be certified by the plumber who carried out the work;
  4. The City’s right to require the fitting of a pre-payment meter at any place in an existing water installation;
  5. The requirement of planning approval for extensions to water installations and the more onerous requirements for the details of the installation to be noted on the plans;
  6. The requirement for all new developments to provide for the installation of alternative water systems for non-domestic purposes;
  7. The requirement for plumbers working in the City to be registered with the City;
  8. The requirement for a second water installation for the use of ”alternative water”;
  9. The requirement for ground water users to be registered; and
  10. The requirement for borehole water to be metered if it is to be disposed of via the City’s sewers.

Whether all of these proposed changes will find their way into the final version of the by-law is yet to be seen. We will keep you updated on further developments.

Deon Welz
January 2018

31 Jan 2018

Security Estates: Are Your Rules Enforceable?

“It is well established that contractual provisions are against public policy ‘… if there is a probability that unconscionable, immoral or illegal conduct will result from the implementation of the provisions according to the tenor’” (extract from judgment below)

When you choose to buy into a security estate or other community scheme, you will invariably become a member of a Home Owners Association (HOA), Body Corporate or the like, and you will be bound to comply with all its rules and regulations.

It’s essential to check that you are happy with them all before you buy because our courts have often confirmed that you will be held to whatever you agree to.

But there are limits, as a recent High Court judgment illustrates…

Speeding fines and dusk-to-dawn curfews

  • A large Golf Estate, comprising a mix of freehold and sectional title properties with extensive common areas and communal facilities, included in its Conduct Rules two sets of provisions –
    • Enforcing a 40 km/hr speed limit on estate roads, and
    • Restricting domestic employees to, amongst other controls, a 6 p.m. to 6 a.m. curfew, limited use of estate roads, and annual renewal of access cards.
  • A homeowner locked horns with the Estate over its enforcement of these rules, initially around its suspension of his and his family’s access to the Estate (and thus to their own home) over unpaid speeding fines.
  • The Court held that both sets of rules are unlawful and invalid, but gave the estate 12 months to regularise them.

First set of rules: Speed limits and traps

Holding that although the roads in question are within the estate’s boundaries they are still “public roads” as defined in our Road Traffic laws, the Court held that the Estate could not lawfully impose speed limits nor enforce them without the necessary authority from the relevant MEC or municipality.

The Court suspended its invalidity ruling for 12 months to allow the Estate time to apply for such authority. Presumably that’s likely to be given to the extent that the authorities consider the rules to be reasonable in light of the Estate’s expressed need to protect children, pedestrians and wildlife on the roads.

Second set of rules: Restrictions on domestic employees

These, held the Court, severely restricted the constitutional rights of the employees in question and affected their basic rights to human dignity, equality, freedom of association, freedom of movement, freedom of occupation and fair labour practices. “Their position within the estate”, said the Court, “is reminiscent of the position that prevailed in the apartheid era: while they are good enough to perform domestic duties for their employers on the estate, which include the task of pushing perambulators on the roads, they are precluded from exercising any rights derived from public law and the Constitution.”

Thus, held the Court, “to the extent that these rules restrict the rights of domestic employees from freely being on and traversing public roads in the estate, I consider them to be unreasonable and unlawful.” This invalidity ruling was also suspended for 12 months.

A warning to all estates

All HOAs and Bodies Corporate need to check their rules and regulations for legal validity. The Court again: “If in fact there are other associations and/or estates in the country who, like the first respondent herein, either through ignorance or plain arrogance on their part, have seen it fit not to comply with statutory provisions, it’s time that they did.”

31 Jan 2018

Employees be Warned! A Conflict of Interest Can Get You Dismissed

“Honesty is the best policy” (Benjamin Franklin)

Employees have a general duty to act loyally, honestly and in their employers’ best interests, and amongst other things that entails avoiding any possible conflicts of interest.

A recent Labour Court decision confirms that any breach of this duty risks dismissal.

A long-service municipal employee dismissed

  • An employee with a 29 year service record failed to disclose to his employer several possible conflicts of interest relating to businesses (which were official “vendors” to the municipality) run by his wife and brother respectively.
  • The employee was bound by his employer’s “Private Work and Declaration of Interests” policy, the practical effect of which was that “he could not give jobs to friends and family” and had to declare any possible conflicts of interest as they arose.
  • Because the employee and his wife were married in community of property, he benefitted directly from his (and his wife’s) failure to disclose a potential conflict when the wife’s business applied to become a vendor to the employer.

It was irrelevant, held the Court, whether he did or did not actually influence the municipality in assigning work to his wife’s business. What counted was whether his failure to disclose possible conflicts of interest amounted to dishonesty, and that required the answers to three questions:

  1. Was there a rule about conflict of interest?
  2. If so, did the employee knowingly breach it? And
  3. If he breached it, was this breach serious enough to warrant dismissal?

In the end result, the Court confirmed the dismissal, holding that the employee was guilty of “serious misconduct amounting to gross dishonesty”, that “his long service does not diminish the gravity of the misconduct” and that “the sanction of dismissal was fair in those circumstances”.

31 Jan 2018

Don’t Lose Your Claim to Prescription – Know the Law!

“Ignorantia iuris nocet” (old Roman proverb meaning “Not knowing the law is harmful”)

Most of us know how important it is to sue our debtors well before prescription permanently takes away our right to claim.

But what if you did nothing until it was too late because you didn’t even know you had a claim in the first place? As a recent Constitutional Court illustrates, the answer depends on what the nature of your ignorance in this regard is.

A damages claim for unlawful arrest

  • An illiterate resident of a rural area was arrested and detained by police for four or five days.
  • He only became aware that his arrest had been unlawful years later when discussing the matter with his neighbour (an attorney). When he then sued the Minister of Police for R350,000 in damages, the Minister raised the defence of prescription.
  • The Court held that in this particular case the claim had indeed prescribed. Central to this decision was the question of the whether the claimant’s ignorance of his right to claim was factual or legal.

If your ignorance is factual…

  • Prescription only starts to run when you have “knowledge of the identity of the debtor and of the facts from which the debt arises”.
  • So ignorance of the facts underlying your claim will delay prescription until you become aware of them. Just note that you can’t act unreasonably here – you are “deemed to have such knowledge if [you] could have acquired it by exercising reasonable care.”

But what about ignorance of legal consequences?

The claimant here did not, he said, know that he had a legal remedy against the Minister until it was too late. He didn’t know the law around the 48 hour limit on detention. He was “innocent, ignorant and uninformed about the legal conclusions or consequences of facts” in his possession.

That ignorance – that the police’s action was “wrongful and actionable” – was, held the Court, not ignorance of a “fact” but ignorance of a “legal conclusion”. And since ignorance of the law doesn’t stop prescription running, his claim had prescribed.

Your remedy

That sounds like hard law and perhaps it is in an unfortunate case such as this, but the reality is that such time limits are necessary to bring “certainty and stability to social and legal affairs”. The highest Court in the land has spoken – you can’t hide behind ignorance of your legal rights when it comes to prescription.

There’s only one remedy – don’t delay in getting legal advice!

31 Jan 2018

Trustees: Your Risk of Personal Liability in Property Sales

Firstly, a warning to anyone selling or buying property to/from a trust – have your lawyer check upfront that you are adequately protected by the terms of the sale agreement.

The problem is that contracting with trusts has its own specific set of rules and, as a recent High Court case illustrates, standard sale agreements don’t always provide adequately for them.

A seller sues an unauthorised trustee for R2m – personally

  1. A company sold a “real right of extension” (a right to build additional buildings in a sectional title development) to a trust,
  2. The agreement of sale was signed by only one of two trustees,
  3. The sale agreement was invalid because the trustee who signed had no authority to sign alone,
  4. The seller sued the trustee in an attempt to hold him personally liable for payment of the purchase price of R1,45m (almost R2m with interest),
  5. The seller relied on a clause in the sale agreement – standard in such agreements – in which the trustee “warrants and binds himself in his personal capacity” that he had authority to sign and that the trust would perform in terms of the sale,
  6. A further provision bound any unauthorised signatory as surety and as the purchaser in his/her personal capacity. The seller’s problem here was that this provision specifically only applied to anyone signing for a company or close corporation yet to be formed. There was nothing specifically binding an unauthorised trustee to similar personal liability,
  7. The seller tried to persuade the Court that the trustee was nevertheless liable as a surety, or that there was an implied term in the agreement holding him personally liable, but the Court was unimpressed on both counts and dismissed the seller’s claim.

The risk for trustees

As the Court pointed out, the seller could have sued the trustee personally not for the purchase price as such, but rather for damages arising from the trustee’s “breach of warranty”.

There’s a warning there for all trustees – you risk a damages claim in your personal capacity if you don’t make sure that you are fully authorised to sign, that you hold the necessary letter of appointment from the Master of the High Court, that your trust has the power to do whatever you are binding it to do, and that all the terms of the trust deed have been complied with.

And a lesson for property sellers and buyers

On the other hand the seller, to succeed in such a damages claim, would have had to prove the extent of its loss, causation of that loss, mitigation of its damages and so on. Its position would have been much clearer, safer and easier had it, before signing the sale agreement –

  1. Checked for all the necessary signing authorities, compliance with the trust deed etc (prevention being as always better than cure), and
  2. Inserted a clause giving it clear and strong personal remedies against any unauthorised trust signatory.

The same advice applies of course to anyone buying property from a trust.

Mistakes here will be expensive – take legal advice before you sign anything!

31 Jan 2018

Timing is Everything

“Right timing is in all things the most important factor” (Hesiod, ancient Greek poet, philosopher and economist)

There are many “Secrets to Success” (in both our business and personal lives) but perhaps one of the most important and basic starting points is to understand how to time all the various things we do for maximum effectiveness –

  • What is the best time of day to be creative?
  • When should we focus on decision-making, analysing, negotiating deals?
  • When are we at our most productive?
  • Do different rules apply to “Night Owls”?
  • What can we do to optimise performance when we have no choice but to do something at a non-optimal time?
  • What time of day should we schedule doctor’s appointments and surgery for?
  • When should we be most careful on the roads?
  • What’s the best age to marry?
  • Should you time the Bad News or the Good News to come first?

Read what science has to say about all this in “This Is the Best Time to Do Anything: 4 Powerful Secrets from Research” on the Barking Up the Wrong Tree blog here.

29 Jan 2018

THE DROUGHT in CAPE TOWN : GARDENS and SWIMMING POOLS

As Conveyancers, part of our role is often to mediate between Sellers and Buyers on contractual and practical issues which arise during the transfer process. One of the questions which we are being asked quite regularly is to deal with a complaint from a disappointed Buyer who bought a house with a pretty, well established garden and a sparkling, blue, full swimming pool, only to be confronted on transfer with the ugly reality of the drought gripping Cape Town. The garden is dead or dying and the swimming pool is a half-filled brown swamp!

Generally, in our property law, the Buyer is entitled to receive in the same condition, that which he purchased on date of sale. Delivery cannot be instant with immoveable property due to the transfer process and there is often a period of several months between date of sale and date of transfer, when delivery of ownership passes to the Buyer. Accordingly, the Seller remains responsible for the maintenance of the property unless the risk of ownership has passed, eg on occupation.

Unforeseen events are called “Acts of God” in everyday and insurance language. Our law has developed a system of rules dealing with what we call vis maior or supervening circumstances which make performance of a contract impossible. It is very difficult for parties contracting with each other to foresee any and every happening, whether due to natural causes or human or legislative agency, and contract accordingly. This system of rules prevent a Buyer from demanding delivery, when delivery is simply not possible, when the parties have not forseen the problem in their contract.

So, let’s get back to the examples above of the dead garden or dirty swimming pool. If a Seller client is confronted by an angry Buyer who will not take transfer of a property or who wishes the damage to a garden or swimming pool to be made good, my advice to them would be that there has been a partial form of supervening impossibility of performance. In our case, the City of Cape Town has prohibited the watering of gardens as well as the filling of swimming pools. Legislation is one example of supervening impossibility of performance in our law. The same argument must apply to a tenant who is required in terms of his lease, to maintain the garden and pool, and is similarly prohibited from doing so. Logic also provides that the Buyer would have been in the same position had he bought earlier in the year, and would be subject to the same water restrictions now.

I have heard a counter-argument that because people are purchasing bulk water, such a seller should have taken the effort to buy water and maintain the garden or fill the pool and restore it to its original pristine state before transfer. Technically, the National Water Act, 1998, provides that water is a natural resource that belongs to everyone, and water cannot be sold without compliance with the Act. Anyone selling water without a licence is breaking the law. I don’t think this would be lawful or ethical in the circumstances.

My practical solution to Estate Agents and clients entering into Deeds of Sale would be to make a reference to the ongoing drought in the Western Cape and disclose (especially to non-Capetonians) that it will not be possible to maintain a garden or a swimming pool due to the legislative constraints. Here is an example of such a clause:

“The purchaser acknowledges and accepts that (notwithstanding the seller’s duty to maintain the property in the same condition as when the offer was accepted, pending the passing of risk), due to water restrictions imposed by the municipal authority, the swimming pool; garden and all water dependent features (if any) will on date of registration of transfer, not necessarily be in the same condition as when purchased and hereby waives any claims against the seller in this regard for as long as these restrictions apply”.

Estate agent should also warn prospective foreign and out-of-town buyers and record in the deed of sale or disclosure document, that the City of Cape Town may also have to shut down our water supply entirely in April or May 2018.

Lets keep on saving water as we approach Day Zero!

AJ MURRAY
MILTONS MATSEMELA INC
January 2018

15 Jan 2018

Case Law Update: The validity of a Lease.

Can a landlord enforce a lease agreement against the tenant if the leased premises do not have approved plans or a certificate of occupancy?

This is the question that was answered in the recent case of WIERDA ROAD WEST PROPERTIES (PTY) LTD v SIZWENTSALUBAGOBODO INC, a judgement which was handed down by the Appeal Court on 1 December 2017.

In this case Wierda Road West, the landlord, was attempting to enforce payment of arrear rentals of more than R8 million from the tenant, SizweNtsalubaGobodo, after the tenant had vacated the property during the period of the lease, and stopped paying rent.

In defence of the claim, the tenant raised the fact that certain portions of the leased premises did not have approved building plans and that, accordingly, no certificate of occupancy had been issued by the municipality. On this basis, they argued that the lease agreement was void, or if not void, unenforceable.

The tenant was successful with this defence in the High Court. Here the court found that that the lease was unenforceable, and that the landlord could therefore not sue the tenant to recover arrear rentals. The landlord appealed against this decision.

In the Appeal Court, the landlord was successful and the lease agreement was upheld.

The Appeal Court found that even though the erection of a building without approved plans, and the occupation of a building without a certificate of occupancy, gave rise to criminal sanctions, it was not the intention of the legislature to render a lease agreement for such premises, by the parties involved here, void or unenforceable. The Appeal Court was of the opinion that the penal sanctions in the relevant legislation, and the powers of enforcement given to the municipality, were sufficient to deal with the non-compliance issues.

That the landlord was not the person who had carried out the un-authorised building work, was a factor which the Appeal Court considered in making its decision. If the landlord had been the builder, the situation might have been different.

The findings of the Appeal Court were also bolstered by the facts that the tenant had used the property without incident for a number of years before moving out, and that the premises appeared to be safe and fit for their purpose.

In short, therefore, the answer to the question posed in the title of this Newsflash is ‘yes’. We now have authority for the proposition that an agreement of lease for a property built without approved plans, and where no occupancy certificate has been issued, is valid and binding.

Deon Welz
January 2018

05 Jan 2018

What Does 2018 Have in Store For Us?

“Prediction is very difficult, especially if it’s about the future” (Niels Bohr, theoretical physicist and Nobel Prize winner)

The last few years have sprung on us a lot more than their fair share of game-changing surprises. The Brexit vote, Donald Trump’s election, the rise and rise of Bitcoin … the list goes on.

 

So how do we go about our strategic planning for 2018?

Make a good start with South African “Foxy Futurist” Clem Sunter’s “The 21st century is stranger than fiction” on Leader.co.za. Clem discusses 9 fundamental “flags” we should all watch in order to give some explanation for what has happened and some idea of what may happen next.

“Have a Healthy, Happy and Successful 2018!”

05 Jan 2018

Sellers and Landlords: Using an Unregistered Estate Agent

With media reports suggesting that up to 50,000 agents may be operating without the required Fidelity Fund Certificate, and whilst many former agents have probably just closed up shop, there is a chance that the agent who sold or rented out your house for you is (whether inadvertently or by design) unregistered.

We look at how this affects you, with a note to agents on the importance of renewing your Fidelity Fund Certificates and using your EAAB PrivySeals.

With media reports suggesting that up to 50,000 agents may be operating without the required Fidelity Fund Certificate (FFC). The real figure is likely to be a lot less in that many former agents have probably just closed up shop in the last 10 years, but even so there is a chance that the agent who sold or rented out your house for you is (whether inadvertently or by design) unregistered.

Using an unregistered agent …

  1. Only registered estate agents (and those practicing attorneys not required to register as agents) have the legal right to claim remuneration/commission. So an unregistered agent won’t be able to enforce any commission claim against you.
  2. Of course you would then stand to save a great deal of money in commission. The question is, should you take the risk of not checking upfront? It boils down to this – can you afford to trust your most important asset to someone who may not be registered with a professional body and backed by a Fidelity Fund?

For most of us the best advice is to rather err on the side of caution. Check for registration, and in any doubt ask your lawyer for help before agreeing to anything.

End notes for agents

Remember that failing to renew your FFC, apart from disentitling you to any form of commission, exposes you also to criminal prosecution if you continue to practice.

You can help the public distinguish you from the scamsters and the bozos by using your EAAB PrivySeal and make sure it is installed correctly on your emails etc – read “Ensure your PrivySeal reflects the current date and time” on the Estate Agency Affairs Board website.

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