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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

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.

A MEASURED RESPONSE TO THE STARTLING VIDEO DOING THE ROUNDS ON SOCIAL MEDIA

I recently received a WhatsApp message with a startling video from an organization called IRR, setting out how South Africans could lose their property in 5 easy steps if the proposed law on expropriation was passed, and how this would irrevocably change property rights, our country and our economy. I felt the video was sensationalist and needed a response. Unfortunately to do a proper job required a little longer than a 3 minute 40 second video. But anyway, here goes.

False Proposition 1

If the proposed Expropriation Act becomes law, property rights in South Africa will never be the same again.

This is not true. The proposed Expropriation Act of 2020 is fully in line with our Constitution as it now stands and therefore changes nothing to the underlying position which has prevailed since 1994. It was always on the cards that an Act of this nature would be passed. It is remarkable that it has taken so long to happen.

Steps 1 & 2

The Expropriating Authority must investigate the property and negotiate to acquire the property with the owner.

If no agreement is reached between the Expropriation Authority and the owner, an expropriation notice is issued where the owner is invited to make representations as to why they should keep the property or what amount of compensation should be paid.

Summing up the pre-expropriation process in one or two sentences does not do it justice. The process is clearly laid out in the Bill and follows a transparent and logical path where everyone whose rights are affected are included.

An expropriating authority has to complete a substantial amount of preliminary work, which includes the instruction of a valuer to provide a valuation of the property, before starting the expropriation process.

An affected owner must then receive a “notice of intention to expropriate” which must set out, amongst other important details, the reason why and the purpose for which the property is required, along with the intended date of expropriation. These reasons and purposes must obviously be legitimate and in line with the requirements of the Constitution, i.e., for a public purpose and in the public interest.

The notice must give the affected owner 30 days to raise objections and to make submissions. It also calls upon the affected owner to furnish the details of the amount of compensation which he believes to be just and equitable and the details of the holders of any unregistered rights in the property (so that their rights can also be protected).

Within 20 days after receiving this notice from the owner the Expropriating Authority must reply on the issue of compensation, and if not agreed, the Expropriating Authority must make a counter-offer “furnishing full details and supporting documents in respect thereof”. This is a serious process in which the Expropriating Authority cannot just thumb suck a number or allege that no compensation should be paid.

A further period of 40 days is then given within which the parties can negotiate an agreement.

If no agreement is reached, and if the Expropriating Authority still wishes to proceed with the expropriation, it can then make a unilateral decision to expropriate. This decision to expropriate must be motivated and the reasons must be published with the notice. The amount of compensation must also be explained.

Such a decision to expropriate would be an “administrative act” and as South Africans, we all enjoy constitutional protection against unjust administrative actions.

In terms of section 33 of our Constitution we all have the right to administrative action that is lawful, reasonable, and procedurally fair, and if this is not the case, this administrative action can be taken under review by a court and set aside.

In addition, in terms of section 34 of our Constitution we all have the right to have any dispute that can be resolved by the application of law resolved by a court.

These are fundamental rights which are entrenched in the Constitution and both of these sections are highlighted in the preamble to the new Bill. An expropriated owner can therefore always approach the courts to set aside an unjust expropriation, and in certain circumstances there will be scope to approach the courts to stop the process before any final expropriation takes place.

Step 3

After this process the Expropriation Authority can issue a notice of expropriation which will set out a date on which ownership of the property will pass to the new owner. There is no time period stipulated for this.

This is also correct. One must however note that a fairly long period of time will have passed since the initial notice of intention to expropriate was given. There will also have been many attempts for the parties to reach agreement and for the parties to place their positions on record, substantiated with whatever documentary evidence they might have available.

Furthermore, in this notice the Expropriating Authority must set out their offer of compensation and explain how the amount (if any) was decided upon. All supporting documentation relating to this decision must also be attached.

The process is accordingly transparent. Should an Expropriating Authority be acting in bad faith or unreasonably this should be able to be demonstrated on the basis of the submissions already on record.

Step 4 & 5

Property owners with means can seek mediation or approach the courts to challenge the validity of the expropriation. Such a dispossessed owner will bear the onus of proof. This will leave people without the means to fight the matter. In addition, if the property owner is unsuccessful, they will have to pay the legal costs of the state.

This is partially correct. Mediation is specifically provided for because this is a cheaper process with less formality, and the purpose is to encourage the parties to reach agreement between themselves. If mediation fails, the parties can approach the courts.

It is true that the onus to prove their case will be on the expropriated owner and that these proceedings can be expensive. There is however no doubt that there will be many human rights and public interest organizations who will assist expropriated owners with these cases until such time as the courts have passed judgments and created precedents which will be able to be applied to other cases. These precedents will give us guidance as to how the courts view these matters, and this will assist parties to reach agreement.

In addition to this, on the issue of costs, the courts always have a discretion, and because of the political sensitivity and importance of these judgments, and provided that the expropriated owner has not acted unreasonably, I would not be surprised to see a court making an order in terms of which each party should pay their own costs, even if the landowner fails.

In Conclusion…

The fairness of the expropriation process depends on the state acting reasonably and honestly, and on the courts upholding our constitutional rights. For this process to turn into a plunder of assets, both of these attributes must be lacking. While there might be a question mark over the motives of certain highly placed politicians, our courts have thus far carried out their civic duty and upheld our constitution admirably.

Throughout the world, countries have laws which entitle the government to take assets from their citizens for the public benefit and South Africa is no different. The current expropriation laws that we have in place date back to 1975 and are long overdue for an update. Having regard to the specific provisions of our Constitution which deal with expropriation, this proposed Act was to be expected.

Finally, if one looks at the sections of the Act which deal with the calculation of compensation, it is clear that expropriation without compensation is intended to take place only in exceptional circumstances. If one needs more evidence of the government’s current policy towards land redistribution you need look no further than the budgeting of R9.3 billion to finalize 1409 Land Restitution claims over the next 3 years. Why would the government be budgeting to pay for land if they intended to pass a law that would entitle them to take it away without paying for it? It is therefore highly unlikely that this piece of legislation will change the nature of our economy or our country.

Deon Welz
Miltons Matsemela Inc.

THE FIRST STEPS TOWARDS COMPLIANCE

During the next few weeks we will be focussing on the implementation of POPI in the businesses of estate agencies. This is to ensure we are all ready for full compliance when the period of grace ends on 30 June 2021.

While we do so we need to keep in mind the intention behind POPI, which is to balance 2 competing interests. These are our individual constitutional rights to privacy (which requires our personal information to be protected); and the needs of our society to have access to and to process (work with) our personal information for legitimate purposes, including the purpose of doing business. While the implementation of the new laws will require some effort from everybody, if we all play by the rules this will be a worthwhile exercise.

In certain circumstances POPI does allow us to access and work with the personal information of people without their consent, but this is the exception. The golden rule is that all businesses need to obtain consent from their customers to use their personal information in the context of their business relationship at the time that the customer’s personal information is collected.

For estate agencies, this could be done by the signature of a stand-alone generic blanket type consent, or, if the client is a seller or a landlord who is signing a written mandate, by the inclusion of such a consent in the mandate. We would also recommend the inclusion of such a consent as a standard clause in your deed of sale/offer to purchase and in your lease.

The generic blanket written consent in the form of a stand-alone document is available on our website. You can access it by clicking this LINK. You are welcome to download it and customise it to make it your own. Please exercise caution if you change the wording, as the document has been drafted to give maximum compliance with the minimum of words.

The standard clauses we suggest including in your mandates, deeds of sale and leases are set out below. You will note we have extended the consent to allow you to discuss matters arising from your mandate with your trusted legal advisors.

CLAUSE TO INSERT IN SALE OR LEASE MANDATE:

I/we hereby give AGENCY NAME consent to process my/our personal information, in accordance with the provisions of the Protection of Personal Information Act, for all purposes related to the carrying out of this mandate. Such consent shall extend to the sharing of my/our personal information with your trusted legal advisors who you may approach for advice or assistance during the provision of your services to me/us.

CLAUSE TO INSERT IN DEEDS OF SALE:

The Seller/s and the Purchaser/s hereby give their consent to the estate agency/ies involved in the sale, and to the Conveyancing Attorneys who will register the transfer of the property, to process our personal information for all purposes related to this sale, in accordance with the provisions of the Protection of Personal Information Act.

CLAUSE TO INSERT IN LEASES:

The Landlord/s and the Tenant/s hereby give their consent to the estate agency/ies involved in the lease, to process our personal information for all purposes related to this lease, in accordance with the provisions of the Protection of Personal Information Act. Such consent specifically includes the consent to work with and disclose our bank account details to facilitate the payment of the deposit and the monthly rent to the Landlord/s, and for the refund of the deposit to the Tenant/s.

You will note that we have included a specific consent to process information related to the clients’ bank account in the clause suggested for leases. This is in compliance with section 106 of POPI.

We hope that this will assist you with your efforts in complying with the new laws. Our next instalment of POPI compliance will follow in a few days.

Kind regards

Deon Welz
Miltons Matsemela Inc.

When you buy or sell your “Home Sweet Home”, particularly for the first time, the process can seem complicated, the terminology confusing, and the risks of making a costly mistake intimidating. You are after all dealing with quite possibly your most important asset!

To help you navigate the process, as either seller or buyer, here are some common questions, with answers.

1. Where can I get a simple guide to the process?

When you come down to the details it certainly is important to get everything right, but a simple, broad overview to start with will go a long way to de-mystifying the process and to setting you safely onto the right path.

Have a look at the Law Society of South Africa’s “Buying or Selling a House: What You Need to Know”. Download it in any of four languages here.

Simply and clearly written, the guide is full of really important information and advice, both practical and legal – take the time to read it in depth!

Turning now to a few of the other more common questions you will no doubt have…

2. Do I really need legal advice?

Our law reports are full of court disputes that could have been avoided with a simple upfront request for legal advice. The danger of not doing so is that many pitfalls await the unwary and you will be held to anything you agree to. It’s only sensible therefore to take advice early – well before you appoint an agent, start looking for a house, or get involved in submitting offers and negotiating sale agreements.

Not having your “offer to purchase” or “agreement of sale” legally checked is a recipe for disaster. Once you sign on the dotted line you are on the hook for everything in the document. With very limited exceptions our law holds you to your signature and it is no good saying later “But I didn’t read the document, it all looked like the normal standard stuff” or “I had no idea I was agreeing to term x or condition y” – tough, you are bound.

Bottom line – chat to your attorney before you do anything else!

3. Whose name/s should I put the property in?

Should you buy the house in your name or in your spouse’s name? Should you buy jointly? Does it matter what marital regime applies to your marriage? What if you are in a permanent cohabitation arrangement rather than a formal marriage? Or perhaps you are wondering whether you should put the house into the name of a company or family trust.

Your choice now will have far-reaching legal, tax and practical consequences; and with some complex areas of law involved, specialist upfront advice is a no-brainer.

4. What else should I ask my attorney?

Common areas of dispute and litigation include “bond clauses” and “72-hour clauses” in sale agreements, confusion over the need to identify or disclose both visible and invisible defects, disagreements over what is a “fixture” that comes with the house and what isn’t, misunderstandings over neighbours’ rights to build and encroach on views and the like, not checking for building plans and municipal Certificates of Occupancy (you will have a problem if a previous owner built or extended without proper plans), not checking the zoning and title deed restrictions (which could put a damper on any plans you have to extend, go up a storey, build a home office, or the like), servitudes or other rights of use over the property, limited “home business” options and so on.

(Tip: Take lots of “before and after” photos of the house and property with your cell phone – a dated picture is hard to argue with!)

Other “homework” items to ask about – what paperwork you will need (do you know where your title deed is?), how long your particular transfer is likely to take (and a linked question “what date of occupation should we agree on?”), to whom deposits and any occupational rental must be paid (and who gets paid the interest earned on monies held in trust), what compliance certificates you need, how to find the best bond rates, whether you might qualify for a FLISP (Finance Linked Individual Subsidy Program) subsidy, how to cancel and open municipal service accounts, the rights of any occupiers (not just tenants, also “unlawful occupiers”), and so on – you will have your own list.

5. What about planning my finances?

Ask your lawyer for a breakdown of who will pay what and when. Think deposits, bond and transfer costs, transfer duty, agent’s commission, bond settlement balances and so on. Cash flow forecasting, and a clear understanding of the timelines involved, are critical here to avoid unpleasant surprises down the line.

As a buyer, factor into your “affordability budget” not only bond repayments and your projected regular monthly costs (rates, services, insurance premiums, security costs etc) but also an emergency fund to cover any unexpected costs that may crop up.

On the subject of finances, cyber-fraud is a growing issue when it comes to electronic communications and payments so agree with your lawyer on measures to ensure that neither of you falls victim. Fraudulent “here are my new bank account details” emails are flavour of the month, but the scams are constantly evolving.

6. Should I buy-to-let in the current market?

Buying-to-let can be an excellent investment channel, and for a whole host of reasons this time of pandemic and disruption has opened up an abundance of opportunities to prospective landlords. Just don’t rush in blind – choose the right property in the right area, go into the process with your eyes fully open, and in particular beware the common pitfall of failing to minimise your risk of having to fight a difficult, destructive or non-paying tenant. Residential property occupiers enjoy strong protections against eviction even in normal times, and these protections are even stronger for the duration of the National State of Disaster.

It is essential also to understand the impact of the Rental Housing Act on the landlord/tenant relationship – do you know for example the specific requirements around rental deposits and joint property inspections? “Ignorance of the law” is no excuse, and non-compliance could cost you dearly.

7. Who appoints the conveyancer and why do I need one?

In a nutshell, you need to appoint a specialist lawyer (a “conveyancer”) to pass transfer of ownership from the seller to the buyer in the Deeds Office. That’s because only on registration of the transfer does the buyer become the legal owner of the property.

As a seller, insist on choosing the conveyancer – pick a firm you can trust to act with professionalism, integrity and speed.

8. What about buying into a complex?

Owing a house and living in a community scheme come with substantial benefits, just understand exactly what you are letting yourself in for both on a practical level and in regard to the various rules and regulations you will be agreeing to.

Our courts regularly have to sort out bitter (and unnecessary) disputes around owners desperately – and almost always unsuccessfully – trying to get out of complying with body corporate and Home Owners Association rules. Common areas of complaint are home businesses, pet ownership and control, vehicle parking, noise, nuisance objections and the like.

9. What records and paperwork should I keep?

One thing is certain – the document you don’t keep on file is the one you will be desperately searching for in 10 or 20 years’ time! So when in doubt about a particular item keep it, but at the very least have a file (backed up electronically) with –

• Your title deed (also called a “deed of transfer”) from the conveyancer. If your property is bonded the bank will keep the original in which event keep a copy plus a note as to which bank has the original. If you lose your title deed you can get a copy but there are delays and costs attached which you really want to avoid when you come to sell again down the line.
• The full signed agreement of sale and annexures,
• The conveyancer’s final statement of account and associated invoices,
• All bank loan and bond documents,
• Your municipal Certificate of Occupancy if you undertook any building work (construction, renovations, extensions etc),
• A running list with supporting documents of all tax-relevant expenses. For example, keep a running Capital Gains Tax schedule with –
  • A list of expenses relevant to the house’s “base cost” (purchase price, transfer costs and legal fees, bond costs, agent’s commission, costs related to the sale or purchase like advertising, architect’s fees etc) and
  • Ongoing capital expenses i.e. improvements and renovations (but not repairs or maintenance).
• “Before and after” photos of the house and property,
• Ask your lawyer if there is anything else you should keep relevant to your particular property and transfer.

This article was published recently by LawDotNews. We credit the original author.