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27 Aug 2020

BACKLOGS IN THE DEEDS OFFICE CAUSE TROUBLE FOR RATEPAYERS

For property sales in the City of Cape Town, the account for municipal property rates and services is transferred into the name of the buyer as soon as the City is advised that registration of transfer of ownership has taken place. In pre-COVID times this used to happen quite soon after transfer, and before the seller’s advance payment to obtain their rates clearance certificate had been used up. The City does however only transfer the account from the seller to the buyer when it is told of the transfer of ownership by the Deeds Office. They will not accept this information from another source.

As we all know, the Deeds Office has fallen behind in their work as a result of the COVID-19 pandemic, and information confirming transfer of ownership is not going through to the City. This has resulted in sellers still being billed for municipal property rates and services, even though their transfers have been registered months ago.

Many sellers affected by this have been calling us to complain. Some have continued to pay the account. This is our advice:

  1. The City will not transfer the account on the strength of our notification, so we cannot assist to speed this up.
  2. The seller just has to bide their time and wait for the information to reach the City from the Deeds Office, at which stage the account will be transferred into the name of the buyer.
  3. The seller is not obliged to pay the bill, and it is highly unlikely that the City will do anything about it, as the City is aware that the property is in the process of being transferred, and of the delays in the Deeds Office.
  4. If the seller has paid the bill after transfer, this payment will be refunded to the seller by the City when the account is transferred to the buyer’s name.
  5. The buyer should not pay the bill, as this payment would then be refunded to the seller, and the buyer will be asked to pay a second time when they receive the first bill from the City.
  6. The buyer beware! The first bill from the City will be a big one, for the period from the date of the transfer of ownership, up to the date of the first account, so start saving.

This is just another example of how the pandemic and the lockdown has caused us all additional stress. Luckily the remedy here is to do nothing. Just wait…

Warmest regards
Miltons Matsemela Inc.

24 Aug 2020

NEW RULES FOR LANDLORDS AND TENANTS UNDER LEVEL 2 LOCKDOWN

To regulate our behaviour under Level 2 of our lockdown, chapter 5 was added to the current lockdown regulations on 16 August 2020. Sections 53 and 54 in this new chapter, dealing with “Eviction” and “Rental Housing”, makes for interesting reading.

We all know that the Rental Housing Act governs residential leasing in South Africa, and that the Rental Housing Tribunals have been established in terms if this law. We should also know that there are regulations that have been published under the Rental Housing Act to outlaw unfair practices. These Unfair Practice Regulations have now been supplemented by the Level 2 Regulations.

In section 53 of the new lockdown regulations, the rules for evictions have been amended again. A court now has the power to suspend or stay an order for eviction after considering the impact of the order on the tenant, how the State of Disaster has affected them, the relative prejudice to the parties, and also whether the landlord “has taken all reasonable steps in good faith to make alternative arrangements” including payment arrangements, to avoid the eviction.

The new lockdown regulation also states that eviction orders will not be able to be acted on until after the state of disaster, unless there are exceptional circumstances.

In section 54 of the new lockdown regulations, the duty of the landlord to ensure the leased premises are supplied with basic services has been emphasised. It is now a deemed unfair practice if the services to the leased premises are terminated without the tenant first being given notice, and an opportunity to make representations. It is also a deemed unfair practice for a landlord not to make arrangements to reach an agreement regarding alternative payment arrangements, so as to make provision for the ongoing provision of basic services to the leased premises.

This regulation seems to place a duty on the landlord to negotiate not only with the tenant regarding the payment for services, but also with the municipality, in circumstances where the Landlord is also unable to pay the bills.

Section 54 goes on to provide that, if the tenant falls onto arrears as a result of the disaster, landlords are not allowed to levy any penalty, apart from interest, in respect of these late payments.

Most notably, in terms of section 54, it is now deemed to be an unfair practice if a landlord fails “to engage reasonably and in good faith” to make arrangements for the effects of the disaster, or if the landlord acts unreasonably or oppressively having regard to the prevailing circumstances. This regulation again emphasizes the obligation on the landlord to enter into negotiations regarding rental payments, either to negotiate a reduction of the rent or to agree on payment holidays.

The message here is clear. Landlords need to act sympathetically towards tenants whose ability to perform in terms of their leases has been negatively affected by the disaster, and they need to actively engage with tenants before attempting to enforce their rights. (Landlords should also retain records of these attempts so that these negotiations can be proved in court). The irony of the matter however lies in the fact that it is not the illness that has caused the economic meltdown that has destroyed the livelihood of many tenants, but rather the same regulations that the government now attempts to use to ameliorate their plight.

Also in section 54, the authority of the Rental Housing Tribunal has been extended to enable it to grant urgent orders to restore possession of rental premises to tenants who have been unlawfully evicted, or to restore services to a premises where they have been cut off, without first affording the Landlord the opportunity to be heard. Previously this authority to grant orders restoring possession was vested only in the courts. The Landlord against whom such an order is made can then convene a hearing of the Tribunal, on 24 hours’ notice, to give their side of the story.

Interesting times indeed.

Deon Welz

Miltons Matsemela Inc.

18 Aug 2020

LATEST UPDATE ON THE CAPE TOWN DEEDS OFFICE & CITY OF CAPE TOWN RATES ACCOUNTS

  1. We are pleased to report that we received word from the Cape Town Deeds Registry this morning that they are going to extend the time which Conveyancers have to register transactions from 5 working days, as from when the Deeds are available for registration, to 10 working days. The Deeds Offices’ current protocol only allows 1 member of staff from each Law Firm to enter the building in order to take care of registrations, to remove notes that were raised by examiners and to attend to Deeds searches etc. Any firm that has high volume is finding it virtually impossible to attend to everything that needs to be attended to every morning as a result of the staff limitation and this of course has an impact on every firm being able to deal with any notes that may have been raised on Deeds that have come up for registration. This additional 5 working days will therefore provide much needed relief to any Conveyancer who has to attend at the Deeds Office.
  2. We have also noticed an increase in enquiries from Sellers and Purchasers wanting to know why their City of Cape Town Rates Accounts have not been amended to reflect the change of ownership, despite several months having passed after transfer. It would appear that the Deeds Office has not been communicating with the City of Cape Town regarding registrations, since lockdown. Normally records are changed within 3 to 6 weeks by when Sellers start receiving final statements and refunds and Purchasers start receiving their new accounts. This can only be ascribed to the backlog of lodgements etc. at the Deeds Office and the shortage of staff. We wish to remind all parties that the City of Cape Town will only update their records once they receive confirmation of change of ownership from the Deeds Office and not a 3rd party.

Warmest regards

Miltons Matsemela
18 August 2020

13 Aug 2020

MINISTER INTERVENES ON DEEDS OFFICE BACKLOG

The Minister of Agriculture, Land Reform and Rural Development, Ms Thoko Didiza, has intervened to address the challenges of backlogs in all deeds offices. Here are the measures that will be put in place:

  1. Examiners will be able to examine documents at home;
  2. The restriction of having only 30% of staff at the deeds office will be done away with;
  3. Offices will be re-arranged (again) to ensure social distancing and safety;
  4. IT systems are to be upgraded and staff will be equipped to work from home;
  5. Decontamination will be done only in affected areas and the offices will only be closed in extreme circumstances.

To read the full media release, click here.

We sincerely hope that these measures will go some way to enabling us to get our registrations done within reasonable time periods, and we will keep you advised of developments.

Warmest regards
Miltons Matsemela

12 Aug 2020

Lockdown “Admission of Guilt” Fines – The Criminal Record Risk

The lockdown laws we are subject to are many, varied and easily broken, with substantial penalties for contraventions. Anyone accused of breaking any of them will probably be offered the option of paying an “admission of guilt” fine. If that happens to you, just be very careful before opting to go that route – tempting as it is to pay up and put the whole thing behind you, it could land you with a criminal record.

Having a criminal record comes with serious and lifelong negative consequences. Even an old and long-forgotten minor offence can hang around in the background until it suddenly pops up at the worst possible times – such as when you apply for a travel visa or a new job.

The general rule is that you will acquire a criminal record if you are arrested, if the police open a docket and take fingerprints, and if you are thereafter convicted of a crime.

The problem with admission of guilt fines is that they may well leave you with a “deemed” conviction and sentence which will end up in the SAPS Criminal Record Centre (CRC) database. Although there was talk in the past of the CRC capturing convictions with just your name and I.D. number the main risk seems to still be in having your fingerprints taken. If that happens, the “crime” is sure to be recorded against your name.

And once you have a criminal record, it’s not easy to get rid of it.

  1. Firstly, you can apply for “expungement” of the record to remove it from the CRC database, but that option is only available to you after 10 years and for certain “minor offences”. It will also take a long time to process – “20 – 28 weeks” per SAPS.
  2. Secondly, you could ask a court to set aside your conviction and sentence – costly, not quick and not guaranteed to succeed.
  3. Thirdly, you could hope that planned amendments to our criminal procedure laws will retrospectively come to your aid – speculative and not yet in the pipeline.

The bottom line – if you are offered the option of paying an admission of guilt fine, ask for advice before you accept!

This article is an edited version of an article published recently by LawDotNews, and we credit the original authors.

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