2021 - Miltons Matsemela

01 Dec 2021

A CASE OF BUYER’S REMORSE?

A Case Study

Most Deeds of Sale have a mortgage bond clause which is a suspensive condition. Suspensive conditions must be met perfectly and on time, or otherwise the Deed of Sale will become null and void. Most mortgage bond clauses will have a time period in which the buyer must obtain the loan, the amount, and a sentence which says the loan will be on the bank’s normal terms and conditions.

What happens when a mortgage bond is initially granted within the time period, but is withdrawn later? Does the agreement become suspensive again?

In the case Dharsey vs Shelly, Dharsey bought a property and paid a deposit. He had to obtain a mortgage bond. The mortgage bond was granted for the agreed amount, in time, and subject to the bank’s normal conditions. The sale therefore became unsuspensive or final.

While the conveyancing was progressing Dharsey received two unpleasant tax assessments from SARS and realized that his purchase had just become unaffordable. He sent the tax assessments to the bank and asked them to review his financial qualification for the bond. The Bank promptly withdrew his bond. When the sale could not proceed, Shelly cancelled the sale and took the deposit for damages. Dharsey wanted his money back and went to Court. The Court found that once a suspensive condition has been met properly – in this case his mortgage bond – the sale does not become suspensive again if the bond is withdrawn. Therefor a buyer cannot sabotage his sale by getting his bank to withdraw the loan. All that happens is that he is now left high and dry without the ability to pay for the property or give the required guarantee. Such a Buyer will lose his deposit and be faced with a damages claim. Beware of Buyers remorse! Also bear in mind, a buyer who creates additional debt after the granting of a bond but before the registration could also see his bond withdrawn and be in the same trouble.

Andrew Murray
30 November 2021

17 Nov 2021

WHAT SARS SAYS ABOUT CRYPTO ASSETS AND TAX

“The future of money is digital currency” as Bill Gates put it, and certainly interest in crypto currencies – like Bitcoin, Ethereum, Polkadot, Solana and the many others popping up all the time – is surging dramatically.

Of growing importance therefore is that anyone holding or planning to buy cryptocurrency needs to understand the tax angle, and by way of an updated warning to keep up to speed on this we point you to SARS’ new webpage on the subject for a “from the horse’s mouth” take on the whole question.

SARS addresses questions such as what a crypto asset is, whether tax needs to be paid, how it will work (with an example of the 2020/21 tax year ITR12 Tax Return), and how it traces crypto asset transactions.

“The future of money is digital currency” (Bill Gates)

If you are thinking of buying – or have bought – any “crypto asset” such as a cryptocurrency like Bitcoin, Ethereum, Polkadot, Solana (or any of the many other crypto currencies springing up all over the place), be aware of the tax implications.

As a start, read the new SARS webpage “Crypto Assets and Tax” here, first published on 27 August 2021 and providing guidance on (at date of writing – expect this webpage to evolve!) these questions –

What is it?
How did we get here?
Do I need to pay tax on crypto assets?
How will it work? (With an example of the ITR12 Income Tax Return for the 2020/21 tax year)
How is SARS tracing crypto asset transactions?
There are still grey areas here – and many pitfalls – so be sure to take specific professional advice!

17 Nov 2021

PROPERTY SELLERS: WHY, HOW AND WHEN TO CHOOSE YOUR OWN CONVEYANCER

When you sell your house (or indeed any other property) you are almost certainly dealing with a transaction of major financial importance to you.

You will therefore want to do everything you can to ensure a smooth and professional transfer process, with the purchase price being paid out to you as soon as possible.

First step in achieving that is choosing the right conveyancer (transferring attorney) for the job. We discuss why every transfer needs to be carried out by a conveyancer, why you as Seller do the choosing, how you should go about making your choice, and why you should bring your chosen conveyancer into the sale process from the very start.

“A great deal is at stake in the transfer of fixed property. It is generally the largest single asset that a person owns and the transaction for the purchase or sale of a fixed property is probably the most important contract undertaken by individuals” (Law Society of South Africa)

For many of us, our home is our most important asset so when it comes time for us to sell, do everything possible to ensure that your interests are fully protected, that the sale goes through quickly and smoothly, and that you are paid without unnecessary delay.

Appointing the right conveyancer is key here. Let’s have a look at the “Why, Who, How and When” of it…

Why do I need a conveyancing attorney?

Legal ownership in “immovable” or “fixed” property (that is, land and permanent attachments such as buildings) can only be transferred from seller to buyer through a formal registration process in the Deeds Office. This is carried out by specialist attorneys who have been admitted to practice as conveyancers.

Who appoints the conveyancer, and how?

As the seller, it is your right to choose which conveyancer will carry out the transfer.

The agreement of sale (it may be called an “Offer to Purchase”, “Deed of Sale” or similar) should contain a clause specifying the conveyancing (or “transferring”) attorney. Make sure you fill in your chosen attorney’s name and details in the space provided, and do not allow anyone else to dictate to you who to use!

You may occasionally come across an offeror/buyer wanting to appoint their own attorney for one reason or another, perhaps with the argument that because they are paying the transfer costs (which include the conveyancer’s fees), the choice should be theirs. But the fact is that you carry more risk, and there is nothing to stop the buyer from employing another attorney to monitor the transfer on their behalf if they really feel this necessary.

Bottom line – stick to your guns! This is your house at stake, so the choice is yours, and yours alone.

How to choose the right conveyancer

Your choice here is critical. You need to appoint someone you can trust to handle the process with the utmost professionalism –

Speed will be important to you (“time is money”!), and whilst a certain amount of delay is inevitable (there are lots of formalities and red-tape requirements involved), a pro-active and committed conveyancer will keep delays to a minimum.
Communication: Progress updates should be regular and timely, keeping you in the loop at every step of the process.
Attention to detail is also vital. Conveyancing is a specialised field, calling for meticulous compliance with a host of rules and regulations. Moreover every sale agreement will be different, and its precise terms and conditions must be complied with.
Cybersecurity has become a major issue in recent years, particularly around the question of email integrity. You will need to play your part here too (to take just one example, don’t ever take at face value an email purporting to come from your attorneys “advising you of our new banking details”), but knowing that your chosen firm of attorneys has security protocols in place is critical to resting easy that the purchase price will indeed end up in your account.

The need for scrupulous integrity goes without saying – a lot of your money will be at stake here!

When should I bring my attorney into the sale process?

Ideally, from the very start. When you first decide to sell, you will find it invaluable to have your attorney’s advice on how to go about it, whether you should speak to an estate agency, how best to market your property, what pitfalls to avoid and so on.

When it comes to the agreement of sale itself, a myriad of things can go wrong if the contract isn’t professionally drawn to be clear, concise, legally enforceable and configured to protect your interests. So if you are presented with an offer or agreement drawn by someone else, take legal advice before you agree to anything!

17 Nov 2021

SOUTH AFRICANS – DON’T LOSE YOUR OWN CITIZENSHIP WHEN YOU APPLY FOR ANOTHER!

Many South Africans want to have dual citizenship – perhaps to work and live overseas, perhaps for travel, perhaps for some other reason.

Be very careful here! As a recent High Court judgment has confirmed, you must have formal Ministerial permission before you apply for foreign citizenship. Drop the ball on that one and you will suddenly wake up to find that you have lost your South African citizenship. And once lost, it isn’t easily regained.

Read on for the details – how the loss of citizenship happens (with a note on a few exemptions), why it happens, how you can prevent it happening, and what you can do if it has already happened.

“… it cannot be said as the applicant suggests that the loss of citizenship takes place without notice and automatically as the citizen in that position has proper notice through the structure of the section of both the opportunity to seek consent to hold dual citizenship and the consequences of acquiring a second citizenship without obtaining such permission. It therefore is not a secret provision but one that every citizen who voluntarily seeks to acquire another citizenship should ordinarily acquaint themselves with” (extract from judgment below)

Note: Many South Africans who need to be aware of this risk will be overseas and/or may not have heard of the High Court decision we discuss below. If you know of any such person, please consider forwarding this to them as soon as possible.

A recent High Court judgment has confirmed that you will lose your South African citizenship if you apply for citizenship of any other country without prior Ministerial permission.

It is irrelevant whether you are South African by birth or not. It is also irrelevant why you want to acquire dual citizenship – perhaps you are living/working overseas, perhaps you want a second passport just to make travelling easier, perhaps you have financial reasons.

How and why you lose your South African citizenship

Dual citizenship itself is allowed, but our Citizenship Act provides that if “by some voluntary and formal act” you acquire citizenship or nationality of another country, you are deprived of your South African citizenship. And Home Affairs is interpreting that to mean that you have voluntarily given up your South African citizenship by your own “formal act” of applying for foreign citizenship.

You are exempt only if …

This loss of citizenship does not apply to –

Minors (under 18 years of age) and
Acquisition of another country’s citizenship by marriage.

How to retain your South African citizenship

The good news is that you can apply through Home Affairs for authority to retain your SA citizenship – but your application must be approved before you acquire your second citizenship.

The bad news is that it takes time, so don’t leave it to the last minute! Even before the pandemic, processing time was given as “3 to 6 months” and media reports suggest that delays are now much longer, although perhaps the publicity surrounding the High Court case in question will assist in improving the situation. If you are overseas, you should find the necessary forms and instructions on your local SA Embassy/Mission/Consulate website.

You’ve lost your citizenship – what now?

This is very much second prize, but you can still apply to get your citizenship back –

If you were a citizen by birth or descent you can apply for reinstatement only if you have returned to, or are living in, South Africa permanently (you still have permanent residence, you just aren’t a citizen).
If you were a citizen by naturalisation, you must re-apply for permanent residence or apply for exemption thereof, before you can be considered for resumption of citizenship.
If all else fails, consider taking the legal route. As we discuss below, the High Court has recently held that the relevant provisions of the Citizenship Act pass Constitutional muster, but there is talk of a possible appeal.

High Court: Choose how important your citizenship is to you, and know the law

There has always been speculation that this section of the Citizenship Act could be held to be unconstitutional. However, in rejecting a recent application to that effect by the Democratic Alliance, the High Court has confirmed that it passes constitutional muster and is not “irrational”.

The High Court’s reasoning was that “It is ultimately a matter of personal choice what weight each of us attaches to the idea of our citizenship”, and that this is not a case of automatic loss of citizenship without notice but rather it “is really about personal and individual choices people make about their future and often choices come with consequences.”

The section in question, held the Court, is “not a secret provision but one that every citizen who voluntarily seeks to acquire another citizenship should ordinarily acquaint themselves with … while it may be arguable that citizens cannot be expected to know every feature of the law, those citizens involved in migration and relocation to other countries with the possibility of acquiring citizenship there must surely be expected to acquaint themselves with the law in that area of activity they are involved in.”

There is talk of an appeal but for now at least, if you have already lost your citizenship your options are limited to those set out above.

P.S. Never let your SA passport lapse!

Although you can travel freely around the world on your second passport, Keep renewing it!

30 Jun 2021

Buying Property from a Company – Should You Buy the Shares or the House?

Buying the house of your dreams presents you with much excitement but also with a number of choices.

For example, if the property is held in a company the seller might offer you the choice of buying the company shares. That way you effectively get ownership of the house without all the delay and cost of a regular property transfer. What should you do?

We discuss some of the main factors you should consider, and also address the old question of whether you could save yourself a bundle of money by avoiding transfer duty.

We end off with a note on buying property from a trust.

“There is never a wrong time to buy the right home” (Anon)

You find the house of your dreams, agree on the price and get ready to put pen to paper. The house is in the name of a company, and you are offered a choice – either buy the house out of the company or take over the company (which owns the house and nothing else) by buying the shares and thus avoid the delay and cost of a normal property transfer and registration in the Deeds Office.

What should you do? There are a host of both practical and legal factors to consider before deciding. Holding property in a company can come with significant advantages, but there can also be major disadvantages, so professional advice specific to your own circumstances is a no-brainer here.

Some of the many factors you should consider are –

Tax and estate planning considerations. These are complex and no two cases will be identical, but consider the higher capital gains tax rates payable by companies (and the annual exclusion and “primary residence exclusion” of R2m for individuals), the differential income tax rates, possible VAT considerations, your own estate planning circumstances (including the estate duty angle) and the like.
Asset protection. Particularly if you run your own business or are in a profession at significant risk of litigation, it may be important to you to protect your major assets (like your house) from possible attack by creditors. Any assets held in your own name will be a natural target if you run into financial problems, whilst those held in another entity like a company or trust will generally be much harder to attack. Complicated multi-level structures such as having a trust owning your company’s shares have generally fallen out of favour for a variety of reasons, but you may still be advised to consider one in your particular situation.
Joint ownership. Joint ownership of property comes with its own set of risks and issues, and depending on your needs you might be advised to address them with a company/shareholder structure.
Costs and simplicity. Running a company comes with extra costs (accounting/auditing, statutory costs etc), formalities and responsibilities, getting a bond in your own name is likely to be a simpler process than taking it in a company, and so on.
The hidden risks. When you buy a company’s shares you get the company as it is, with all its assets and liabilities. If the seller is in any way unreliable, you could find yourself losing the house to an undisclosed company liability that suddenly crawls out of the woodwork. Suretyships are a particular danger here – there is no central register of suretyships you can refer to, and it is common for groups of companies and other entities in particular to sign cross-suretyships without necessarily keeping a record of them all. These are risks that can be largely managed with proper advice and due diligence, but a residual whiff of doubt is inevitable.
Other factors. There will be many other aspects to consider, depending on your circumstances and needs, and on the company in question.

Transfer duty – you pay it either way!

As a buyer you can never lose sight of all the costs you will incur in buying a house, and the “big one” is normally transfer duty. It’s essentially a government tax, payable by you as buyer (unless the property sale is subject to VAT), and it can be a lot of money.

Do not however fall into the old (and surprisingly still-common) trap of thinking that by buying the company you avoid paying transfer duty. That was indeed a commonly used loophole in decades past and it is still sometimes referred to. But in reality that all changed many years ago, and (subject to what is said below) you should budget to pay transfer duty as set out in this table –

Transfer Duty 1 March 2021 to 28 February 2022

Source: SARS “Budget Tax Guide 2021”

So for example if you buy a house for R3m you will pay R146k in transfer duty. Or R916k on a R10m house. Finding a way to avoid or reduce such a cost is an attractive proposition, and indeed until 2002 it was a common way for buyers and sellers to save transfer duty and to instead pay only ¼% “Securities Transfer Tax” – a huge saving.

That loophole closed however many years ago – on 13 December 2002 to be precise – and since then the sale of shares in a “residential property company” (a company with over 50% of its asset value in residential property) attracts transfer duty on the “fair value” of the property. No savings there!

What about “buying” a property-owning trust?

Similarly, before 2002 a common transfer duty avoidance strategy was to hold property in a trust, then to “sell” the trust to a purchaser by substituting him/her as a beneficiary of that trust. That loophole was also closed in respect of beneficiaries holding “contingent interests” in the property – the situation here is a bit more complicated than it is with companies as there are various types of trust you could be dealing with, so specialist advice is essential.

10 May 2021

POPI Guidance Note on general duties that will be expected of an IO.

Dear all,

We have received a POPI Guidance note on the general duties that will be expected of an Information Officer (IO).
We suggest that if you are the appointed IO of your organisation, that you familiarise yourself with this document immediately. A copy may be obtained on our website, here.

Kindest regards
Miltons Matsemela Inc.

12 Apr 2021

DIGITAL SIGNATURES – LATEST CASE LAW!

Never before in our country’s history, have we seen a concerted effort in the property industry as we did, during levels 5 and 4 of lockdown, for estate agents; attorneys; sellers and purchasers to find “alternative methods” to sign sale agreements for land, when they had no access to printers and could not meet face to face as we are all accustomed to. And this, all because the Alienation of Land Act of 1981 (ALA), requires all sale agreements of land to be signed. In addition the case law that has evolved under the ALA has always interpreted signatures to mean “wet ink signatures”. And to top it off, the Electronic Communications and Transactions Act 25 of 2002 (ECTA), specifically states that electronic signatures, may not be used for the sale agreements of land! So we all had to come up with some interesting methods to ensure that sale agreements were properly signed during Covid level 4 and 5 lockdown!

The question which has of course arisen, is what exactly constitutes an electronic signature for the sake of ECTA, when dealing with the sale of land under the ALA?

We finally have some case law which is certain to be referred to and relied on (or criticised) in the years that lie ahead, on this vexing topic! In the matter of Borcherds and Another v Duxbury and Others one of the parties had concluded a sale agreement of land on 20 June 2020 in the Eastern Cape, by signing the contract and initialling it, utilising an application loaded onto his cellular telephone called DocuSign. He had imported images of his actual “wet ink” signature and initials into the DocuSign application on his phone and then applied these to a digital copy of the contract, using the same application. This was all “common cause” between the parties.

But – it has been trite law in SA for decades now, that for the sake of a “signature” on a sale agreement of land, a so called “wet ink” signature has always been required or to be more specific, a “mark” made by a person holding a pen or pencil, or even a thumb print using an ink pad. But to simply copy a photo image and then to paste it onto a digital copy of a sale agreement…? Is this legal and binding? Does this amount to “making your mark?”

It was submitted by the opposing team that by utilising the DocuSign application to sign the contract, the signatory had applied electronic signatures to the contract within the meaning of ECTA and that as such, the contract was of no force and effect as it did not satisfy the signature requirement of the (ALA), read with all the case law that has evolved over the years, requiring “wet ink” signatures.

The court however reflected on the fact that the words ‘sign’ and ‘signed’ are not defined in the ALA. It also reflected that the approach of the courts to signatures has always been pragmatic, not formalistic. They look to whether the method of the signature used, fulfils the function of a signature (which is, to authenticate the identity of the signatory) rather than to insist on the form of the signature used.

The court reflected on the fact that in the days before electronic communication, the courts were willing to accept any mark made by a person for the purpose of attesting a document, or identifying it as his act, to be a valid signature. A ‘signature’ is after all the person’s “distinguishing mark” made with the intention to be identified as his mark. The court reflected on another decision where the court had held that a signature could even be effected by means of a rubber stamp! The importance of the long string of cases that deal with signatures, lies in the recognition that the word ‘sign’ means to “sign by name or by mark”.

The court also looked at some authority where the concern with digital signatures, lay in the possibility of abuse, but in this case, there was no denying, that the digital image of a signature was that of the actual signatory. Applied to the facts of the case, it was thus common cause that the signatures and initials of the party who used DocuSign were simply digitised versions of original handwritten signatures and initials.

On these facts the court then held that “by affixing their signatures and initials to the contract utilising the DocuSign application the[signatory] signed the contract as envisaged in s 2(1) of the [ALA] Act with the intention of being bound to the contract as seller”. The court therefore upheld the argument that this signature complied with the requirements of ALA!

Our take? We would advise you to treat this judgment with caution. Remember that this was a single judge ruling by a court in the Eastern Cape, which is not at all binding on any other province or high court. Until the Supreme Court of Appeal rules similarly or the ALA and/or ECTA is amended to specifically cater for signatures of land sale agreements in this manner, we are nowhere near certainty on this point. We would like to therefore suggest that you rather stick to “old school wet ink signatures”, as far as possible!

Kind regards
Robert Krautkramer
Miltons Matsemela Inc.

07 Apr 2021

Who Gets the House on Divorce?

Historically 44% of South African marriages have ended in divorce, and there has reportedly been a 20% surge in new divorce applications since lockdown. For those unfortunate couples whose marriages do eventually fall apart, often the most important asset in play from both a financial and an emotional perspective is the family home. So it is crucial for any couple contemplating marriage, or currently married but considering a split, to understand what our law says about who gets what on divorce.

Your divorce order as issued by the divorce court will be the “final word” here. If you have been able to agree on a split of assets and liabilities your agreement will typically be contained in a “consent paper”, and agreement is of course very much “first prize” here. Particularly if you have children – exposing them to a bitter fight over assets and to the risk of having to leave their childhood home and neighbourhood will only add to the disruption and the trauma in their lives. In any event if you can’t agree to the terms of the divorce, you are in for some emotional, time-hungry and expensive litigation before a court finalizes the split for you.

A variety of factors will be at play here, all linked to the question of what “marital regime” applies to your marriage so the first question you need to ask is whether you are married in or out of community of property – and if out, does accrual apply?

If you are married in community of property

This is the default marital regime for South African marriages, and if you didn’t sign an ante-nuptial contract (“ANC”) before you married, all your assets and liabilities at date of divorce (with a few specific exceptions) will automatically belong to both of you in “undivided shares” i.e. 50/50.

Typically, your divorce order and/or consent paper will provide for one spouse to become the 100% owner of the communal home, with a suitable financial adjustment between you to account for the value of the other spouse’s 50% share.

No formal transfer of the share in the property in the Deeds Office is needed, your attorney will just arrange for an endorsement on the property’s title deed to transfer ownership.

If you are married out of community of property

You have two separate estates and what you bring into the marriage remains yours, as does any growth in asset value during the marriage, depending on whether the accrual system applies or not.

As to who keeps (or gets) the house, and as to how much if anything the other spouse must pay in return, that will depend on a host of factors including the terms of your ANC and whether you were married with or without “accrual”.

“With accrual” is the default unless you specifically opt to marry “without accrual”. In practice most modern couples specifically opt for accrual, in which event the difference in growth in value between the estates, if any, during the marriage of your two estates will be split between you.

If the house is currently registered in only one of your names and that spouse is to keep the house, no formal transfer nor endorsement of the title deed will be necessary. If however the other spouse is to become the registered owner, a full transfer of ownership in the Deeds Office is needed. Although an exemption from transfer duty applies in this case, there will still be other transfer fees and costs to consider.

If you are co-owners of the property (in other words, if you are jointly recorded as owners on the title deed) you may want to transfer the one’s share to the other spouse. Again, a transfer will be needed. There is however nothing to stop you agreeing on a temporary or permanent continuation of the co-ownership after divorce, perhaps to minimize disruption to your children’s lives, or perhaps while you jointly market and sell it at the best price (in which event your agreement should specify in detail who will pay what costs, what the minimum purchase price will be, interim arrangements, and so on).

Who pays off the mortgage bond?

If you are currently registered as co-owners, both of you will be equally liable for the full remaining debt owing to the bank. If one of you is the owner and the other is to take transfer, the current owner remains solely liable for the loan debt until released by the bank.

Whichever spouse keeps (or takes over) sole ownership of the house will have to make a new loan application to the bank in his/her own name and be substituted as the sole debtor/mortgagor.

If you get the house, how will you pay out your ex-spouse?

As above, normally there will be a financial adjustment between you to compensate the other spouse, and if you don’t have the funds available you may need to ask the bank for a second mortgage. You could of course also agree to sell the house and split the proceeds after settling the existing bond.

What if our house is owned by a trust or company?

Houses and other properties have historically often been held in trusts or companies for estate planning and asset protection purposes, and our courts are regularly called upon to resolve bitter disputes along the lines of “it was all a sham, the house never really belonged the trust, so please Judge order the trust to put it back into the pot as a personal asset”. Here the law refers to “piercing the corporate veil”.

The spouse making such a claim will generally have to prove some form of “abuse” of the trust before a court will order that the house in fact belongs to the other spouse personally. But there are grey areas here and professional advice specific to your particular circumstances is essential.

Prevention being better than cure….

Your house could well be your marriage’s most important asset both financially and emotionally. Rather than fight over it when divorce looms, seek professional advice before you tie the knot on what marital regime is best for you, and on how best to sort out who gets the house if you should be unlucky enough to part ways down the line.

In closing:

The above is a very simplified summary of the various scenarios one may face in a divorce. Remember, that it will not only be your ex-spouse that will have to be paid. All transactions in the deeds office will carry conveyancing costs and deeds office fees. In addition, you will require a rates clearance certificate, a levy clearance certificate (if the property is part of a housing scheme) and possibly, compliance certificates. The bank that agrees to the substitution of debtor or that grants a new bond will also charge an initiation fee that may be payable in advance. Anyone contemplating taking over ownership of a property, or a share therein, following a divorce would therefore be wise to obtain a quotation for all of this work from a firm of conveyancing attorneys before agreeing to a settlement on this basis.

This article was published recently by LawDotNews and we credit the original author. We have made minor amendments to the text to clarify aspects of the article that we thought were of importance.

30 Mar 2021

ASBESTOS ROOFING – “TO BE, OR NOT TO BE?”

A link to an article published by an on line publication called BIZCOMMUNITY.COM, and which deals with the Asbestos Abatement Regulations, is doing the rounds. The article states, amongst other things, the following: “… but asbestos is now outlawed and building owners have only 14 months to plan removals, including homes…”

This has created quite a stir amongst some estate agents who have asked us whether this now means that all home owners whose properties still have asbestos roofing, will now be required (as a matter of law) to remove this within the next 14 months (being the remaining time allowed for certain of the regulations to be implemented), and whether a new compliance certificate is now heading our way? The answer is a resounding no. Sadly, this article has not summarised the regulations accurately at all.

The regulations are not very clearly drafted and it is therefore hard to tell which buildings exactly the regulations apply to. The regulations are only applicable to “workplaces”, but no regard has been had to the fact that many people now work from home and many others employ domestic workers. This leaves a large question mark over the applicability of the regulations to residential properties that fall into this category. Insofar as laws are intended to be applied so as to impinge as little as possible on our freedoms, our advice would be to treat all property that is primarily residential as exempt from the regulations until there is clarity on the point.

All the regulations state (in a nutshell) is that where you do have asbestos, you need to have it looked at to determine whether it does expose anyone to a health risk – i.e. whether it has reached a stage of deterioration which requires removal, and if so, how to go about this. The bulk of the regulations are immediately applicable but right at the end, it states that regulations 3 and 22 will only come into force 18 months after publication of the regulations – on 9 May 2022.

Regulation 3 is the regulation on which a lot of the other regulations are based as it deals with the employer’s duty to identify any asbestos in the workplace. Only once the asbestos has been identified can many of the other regulations be applied. This gives us a window period expiring on 9 May 2022 to do the real work of implementing the steps required to keep us all safe from the asbestos.

The regulations are quite detailed as to how the asbestos and asbestos composite materials are to be dealt with, and they create a lot more red tape and compliance work. They deal with situations where you know you have asbestos in the workplace and then how to check whether it poses any risk; how often you much check; once you have determined that it is a hazard, how to go about removing it; how to deal with employees who are exposed to asbestos and the packaging and transport of asbestos. They also deal with 3 various types of “asbestos work” and how each one must be dealt with.

While the Regulations do not require us to have a new Certificate of Compliance for asbestos, once an owner has an inventory of any “asbestos in place” at any workplace or premises, this inventory must be provided to the new owner of the premises on transfer of ownership. This will be of special relevance to agents dealing with commercial and industrial property and will require a new clause to be added to the deed of sale along the following lines: The seller has established that the property has asbestos in place as per the inventory attached hereto and marked as Appendix “….”, as is required by section 4(7)(d) of the Asbestos Abatement Regulations published under Government Notice R1196 in GG 43893 of 10 November 2020.

Alternatively, where the Seller does not yet have a certificate: In the event that the property has parts made up of asbestos or asbestos-containing materials, the Seller undertakes to provide the Purchaser with an “inventory of asbestos in place” on registration of transfer, as required by section 4(7)(b) of the Asbestos Abatement Regulations published under Government Notice R1196 in GG 43893 of 10 November 2020.

The bottom line is that property owners with homes which do happen to have asbestos roofing for example, are not under any obligation to now suddenly start replacing their roofing within the next 14 months! At worst, these homeowners may be required to call on a qualified person to come and check on the integrity of the asbestos, if their homes are also used as a workplace. This would in any event be a wise move because if you have an old home (which will be the case if you still have asbestos), you don’t want that asbestos dust to get into the environment, as it presents a serious health hazard for every one of us.

Kindest regards
Robert Krautkramer & Deon Welz
Miltons Matsemela

15 Mar 2021

POPI & DIRECT MARKETING – ALL A PROPERTY PROFESSIONAL NEEDS TO KNOW:

The Protection of Personal Information Act (POPI) deals specifically with the subject of direct marketing, and strict rules are in place to regulate this. This is what you need to know:

1. Direct marketing includes any direct approach to generate business. This approach could be by email or other electronic messaging system, by ordinary mail or in person. It therefore includes all email marketing, SMS’s and WhatsApp’s, newsletters, drops, tele-canvassing and cold calling.

2. The Act deals separately with direct marketing by means of electronic communication, and “other” direct marketing.

3. “Other” (non-electronic) direct marketing is dealt with very briefly and we are all given the right to object to having our personal information used for this type of direct marketing. Once such an objection has been raised, a Property Professional may no longer use the person’s personal information for direct marketing.

4. Direct marketing by means of electronic communication is dealt with in more detail and the rules are a bit more complicated. The default position is that this type of marketing is prohibited, unless it is done in accordance with the rules laid down in the Act.

5. A distinction is drawn between those people who you have already dealt with in the context of your business, whose personal details you collected during your previous dealings with them, let’s call them “existing client contacts”, and people who you are looking to generate new business from, let’s call them “new prospects”.

6. You may continue to include “existing client contacts” in your direct marketing on 2 conditions:

6.1 You only may market products and/or services to them that are similar to those that were provided when you acquired their personal details; and

6.2 The person must be given the option to opt out with each marketing communication sent.

7. For “new prospects” you may only carry out direct marketing to them by electronic means if the person has consented to receive such marketing. If such consent is refused, you may not ask for consent again. In addition, these “new prospects” must be also be given the option to opt out with each marketing message sent.

8. The Act prescribes a form that a “new prospect” needs to sign to give their consent to allow their personal information to be used for direct marketing, and this consent form can be found here. I have also prepared an amended consent form, to make it more user friendly for your business, and this can be found here. Feel free to make the form your own, but be careful not to move too far from the prescribed wording.

9. When sending direct marketing material you must include your details as the sender. You must also give the recipient an address or other contact details where they could send a request to unsubscribe.

10. The bottom line is that you need to give all recipients of digital marketing material the opportunity to “unsubscribe” from your marketing list/database every time that you send marketing material, and if a person does unsubscribe, you need to respect this decision and do the necessary.

Deon Welz
Miltons Matsemela Inc.

Archives: