If, after a property buyer has taken transfer, it turns out that a structure on the property is unlawful for lack of local authority planning permission and approved plans, who must fix the problem? Does the buyer have any claim against the seller? We address those questions in the context of the general rule that building permission is legally required before any construction can begin.

We discuss also why both parties should take steps upfront to avoid any disputes over the issue – why buyers should ask for plans before even making an offer, and why sellers should have them available.

“No person shall without the prior approval in writing of the local authority in question, erect any building in respect of which plans and specifications are to be drawn and submitted in terms of this Act.” (National Building Regulations and Building Standards Act)

Here’s a nightmare scenario for a buyer – you move into your new dream home, and only then find out that your lovely little office/spare bedroom extension has no approved building plans. The municipality says the seller’s building works were unapproved and unlawful – you must demolish the extension.

How can you guard against that happening to you?

Planning permission is legally required before building

Firstly, local authority planning permission is a legal requirement before any building works, renovations or extensions can take place. You will need to check with your local municipality what its particular requirements are, and what “minor” works are exempt from this requirement in your area.

Without municipal permission, you have an unlawful structure on your hands – a recipe for disaster.

The problem for a buyer is that, once the transfer is through and you are the registered owner, it is to you as buyer that the municipality will look to obtain any outstanding building authorities and plans, to pay any penalties for non-compliance, and possibly even to demolish the unlawful structures.

The seller isn’t obliged to supply proof (and plans) to you, unless…

Your risk as buyer is that the seller is only obliged to supply proof of planning permission and approved plans to you if that is specifically required by the sale agreement. Ideally ask for plans before you even put your offer in, otherwise insist on a clear clause in the agreement requiring the seller to produce the plans before transfer. It’s the only way to avoid the risk of having to rectify unlawful structures.

Make sure it is clear that the seller (not you) must get and produce the plans

A 2023 High Court decision addressed a claim by buyers who had at the negotiation stage noticed newly erected buildings in respect of which they were advised that building plans were at the ‘approval stage’ with the municipality. Accordingly, the sale agreement provided that the sale was subject to approval of building plans by the municipality.

What the deed of sale did not specify was who had to get the plan approval – was it the buyer, or the seller?

The Court ultimately declared the seller responsible for obtaining the plans on the basis that by default only a landowner can apply for approval and plans, but that victory for the buyer came only after a hard-fought court battle – avoid all that delay, cost and dispute with an upfront clause clearly putting the obligation on the seller.

When you have the plans, check them against all structures

Plans in hand, check that all the buildings and structures actually on the property tie in with the municipal approvals and plans. It’s not uncommon to find plans are outdated or inaccurate. Sometimes regulations have changed, sometimes owners chance their luck or have just overlooked the need to keep plans updated as renovations and extensions take place. And whilst the municipality may accept “minor” deviations from plans, you should be sure of what is acceptable and what isn’t before you take transfer. First prize here of course is updated “as-built” plans showing the construction as it exists after completion – you’ll probably need them anyway if you do renovations down the line.

Sellers – why should you have the plans ready to offer them to the buyer?

The other side of the coin of course is that as a seller, even though you aren’t legally required to do so, it makes a lot of sense to have on hand copies of all building approvals and plans before you sell –

• As a sales tactic you can now reassure prospective buyers that all structures are lawfully constructed.
• You will avoid delay if the bank granting the buyer a mortgage bond decides it wants copies of plans as part of its approval process. That’s exactly what happened in the High Court case discussed above, delaying transfer substantially.
• You will also be reassuring yourself that all necessary approvals and plans were in fact obtained at the time of construction. If it turns out for example that you or a previous owner inadvertently dropped the ball in that regard, a disaffected buyer will try to pin all the blame on you. You might even be accused of fraudulently concealing a lack of plans – in which event the standard “voetstoots” (“as is”) clause won’t protect you. There’s no risk of any of that if you have the actual plans on hand from the start.
• In any event the “Mandatory Disclosure Form” that you must attach to the sale agreement specifically requires you to certify that the necessary consents, permissions and permits were obtained for any additions/improvements etc. Attaching the actual approvals and plans is the best way to cover you in the event of any dispute down the line.

The recent Constitutional Court decision declaring a section of the Divorce Act unconstitutional has attracted a lot of media attention, but it hasn’t always been made clear who needs to know about it and who doesn’t.

We’ll discuss who is affected and who isn’t after a quick reminder of the three choices of “marital regime” available in South Africa, with an emphasis on answering the questions “What is this ruling all about?” and “What does it mean in practice?” We end off with an important note for couples about to tie the knot.

Media reports of the recent Constitutional Court decision holding a section of the Divorce Act unconstitutional and giving Parliament 24 months to remedy that haven’t always been clear about who needs to be aware of this, and who doesn’t.

Firstly, understand the three “marital regimes” available to you

Legally, marriage amounts to a binding contract, and you have the right to choose between three possible “regimes” –

1. Marriage in community of property: All of your assets and liabilities are merged into one “joint estate” in which each of you has an undivided half share. On divorce or death, the joint estate (including any profit or loss) is split equally between you, regardless of what each of you brought into the marriage or contributed to it thereafter. This is the “default” regime – so you will automatically be married in community of property if you don’t specify otherwise in an ANC (ante-nuptial contract) executed before you marry.
2. Marriage out of community of property without the accrual system: Your own assets and liabilities, both what you bring in and what you acquire during the marriage, remain exclusively yours to do with as you wish. Note here that the “accrual system” (see option 3 below) will apply to you unless your ANC specifically excludes it.
3. Marriage out of community of property with the accrual system: As with the previous option, your own assets and liabilities remain solely yours. On divorce or death however you also share equally in the “accrual” (growth) of your assets (with a few exceptions) during the marriage.

Secondly, what’s the new ruling all about?

If you were married out of community of property (a) without the accrual system (option 2 above) after (b) 1 November 1984, you previously could not ask the court for a “redistribution order” – a reallocation of assets between spouses to ensure a fair split. Your marriage could end (be it through divorce or death) with one of you in a strong financial position and the other in a dire financial position, with a court having no discretion to help the spouse with less or no assets. You could literally be left destitute after possibly decades of marriage, with no redress and no claim against your spouse’s assets.

A 2021 High Court order (now confirmed in a Constitutional Court decision) declared unconstitutional the section of the Divorce Act which led to that unhappy state of affairs, so that you can now ask the court for a redistribution order no matter when you were married.

What does it mean in practice?

• Does this change affect you? The change does not affect you if you were married –

o In community of property (option 1 above), or
o Out of community of property with accrual (option 3 above), or
o Out of community of property without accrual (option 2 above) before 1 November 1984.

The change does affect you if you were married out of community of property without accrual (option 2 above) after 1 November 1984.

• What new rights do you have? You now have the right – previously denied to you – to apply for a fair, court-ordered asset redistribution between spouses.
• Are you automatically entitled to a redistribution of assets? No – you will have to convince the court that “it is equitable and just by reason of the fact that the party in whose favour the order is granted, contributed directly or indirectly to the maintenance or increase of the estate of the other party during the subsistence of the marriage, either by the rendering of services, or the saving of expenses which would otherwise have been incurred, or in any other manner.” In other words, you must prove what contributions you made to the marriage to justify your claim to redistribution.
• Will the court take anything else into account? What about what you agreed to in your ANC? Importantly, the court can take into account “any other factor which should in the opinion of the court be taken into account”. What you agreed to in your ANC is bound to be a consideration, and as the Court here put it: “This is as wide as can be. The fact that the parties concluded an antenuptial contract excluding the accrual regime could be taken into account. The weight this factor should receive would depend on the circumstances.” Bottom line – the court can take anything relevant into account, including what you agreed to at the time of your marriage.

About to marry?

Which all confirms the importance of making the correct legal choices before you marry to avoid uncertainty, heartache and dispute down the line. Take professional advice on which option is best for you!

In your quest for the best buyer and the best price for your house, you may well end up receiving an offer from a foreigner keen to take advantage of our weak Rand, value-for-money property market and attractive lifestyle.

Before accepting an offer, you (and your buyer) need to consider several important questions. What restrictions and regulations apply to a non-resident buying property in South Africa? What happens if the buyer wants to buy in the name of an entity? What happens about signing documents overseas? What are the tax and other practical implications? We address all those questions, and more.

“Oh, I’m an alien, I’m a legal alien” (Sting’s ‘Englishman in New York’)

South Africa is attractive to overseas property buyers with our world-class lifestyle, depreciated Rand, strong property registration and legal systems, and minimal restrictions against non-resident property ownership.

Which is of course great news for property sellers in any area popular with foreign investors. Coastal and other tourist-friendly areas will appeal particularly to buyers wanting a holiday or retirement destination, whilst those buying purely for investment or business reasons will have a wider focus.

As an upfront note, remember that as the seller it is your right to choose the conveyancing attorney. Don’t ever give that right up, and as always sign nothing without first taking specific legal advice.

But can a non-resident buy your house?

Yes – South Africa (unlike many other countries) imposes few restrictions on non-resident property buyers. Only “illegal aliens” (foreigners unlawfully in South Africa) are totally barred from ownership.

There are however some aspects that both you and your prospective buyer should be aware of –

• What laws and requirements apply? South African legal and regulatory requirements apply and non-residents should take local professional advice on anything they aren’t sure of to avoid unnecessary delay and to ensure a smooth sale and transfer process.
• Can the buyer buy in an entity? Certainly, but specific rules and tax considerations apply when an entity like a company or trust is the purchaser – professional advice is essential, and as a seller be aware of possible delays in the transfer process.
• Signing documents: The sale agreement itself can be signed anywhere and is valid so long as it is in writing and physically signed. However, when it comes to the signing of transfer documents for the Deeds Office and bond documents for the bank (if a bond is applied for) the buyer should if possible sign in South Africa. If that isn’t possible, the buyer can either appoint a local trusted representative via a Power of Attorney, or sign documents overseas with proper authentication (normally by a notary public or embassy/consular official, but the requirements vary by country).
• Costs: Overseas buyers should understand what costs are payable by them and should consider in particular big-ticket items like transfer duty (or VAT if applicable). Your conveyancer can help the prospective buyer with a cost estimate to avoid any cash flow issues and delays during the transfer process.
• Mortgage bonds: South African banks offer bond finance to non-residents, generally subject to both their normal criteria relating to affordability and so on, and to a “50/50” limit – the amount of the loan must be matched by an equal cash payment (usually by import of foreign funds). Note that this limit only applies to non-residents, so foreign nationals who are legally resident in the country may, and this varies from bank to bank, qualify for larger bonds of up to 75%, perhaps more in some cases. Compliance with FICA (the Financial Intelligence Centre Act) will require identification of the buyer and proof of residential address.
• Repatriating the money: When the non-resident eventually resells, they can repatriate the imported foreign funds and any proportional profit. It is essential for the buyer to keep all records relating to the original purchase and the “deal receipt” proving import of funds.
• What income and capital gains taxes are payable? If the property is rented out, rentals are subject to local income tax. On resale, CGT (Capital Gains Tax) applies.

When it comes to buying or selling immovable property, there are various legal intricacies that need to be considered to ensure a smooth transaction. One of the most important documents that both buyers and sellers should be aware of is the occupancy certificate.

An occupancy certificate is a legal document that certifies that a building (as defined, this means basically any improvement to an erf which requires building plans) has been constructed according to the approved building plans and complies with all the necessary building regulations and by-laws. This certificate is issued by the local authority or municipality and is required for all improvements, including residential and commercial properties.

It is important to note that an occupancy certificate is required before occupying (or using) any such improvements.

To obtain an occupancy certificate, a building inspector must inspect the “building” (as defined) and confirm that it meets all the necessary requirements. Once the building has been certified, the certificate is issued to the owner of the property.

If there are any changes or alterations made to the building after the certificate has been issued, a new inspection may be required to ensure that the building still complies with the regulations and standards.

The sale of immovable property

Oddly enough, it is not a requirement in law in South Africa, that a seller must be able to produce an occupancy certificate before a property may be transferred. But undertaking improvements and then not obtaining one is an offence.

How they may affect the registration of mortgage bonds

We have noted a marked increase in bonds being approved on condition that an occupancy certificate and approved building plans are obtained.

If the seller does not have an occupancy certificate, then the seller needs to obtain one in order to satisfy the bank’s bond requirements. However, the question that then arises, is who must pay for this? The answer is – the purchaser – because it is after all, a bond condition. To obtain an occupancy certificate can cost thousands of rands. However, if the seller had undertaken in the offer to purchase to provide one, then the seller is of course liable for the costs. This can cause delays in the transaction and may even result in the buyer losing out on the property if they are unable to obtain the certificate within the required timeframe, or at all.

Of course, we all want our loved ones to be looked after when we are gone, and we all know the importance of leaving behind a valid and properly drawn will to ensure that our last wishes are honoured.

But knowledge and action are different things, and our courts must regularly sort out bitter family fights resulting from people not prioritising this vital duty while they can. We illustrate with a discussion around two tragic cases, one involving a father leaving instructions for a new will in a video call but dying of Covid-19 before he could sign it.

“Death is not the end. There remains the litigation over the estate.” (Ambrose Bierce)

It may well be that in the future, we will be able to make a perfectly valid will (“Last Will and Testament”) by way of a video recording or other electronic means, but that day has not yet arrived.

For now, it is essential that your will be properly drawn, not only to clearly reflect your last wishes, but also to comply with all the formalities laid out in our Wills Act.

In summary (ask your lawyer to explain the finer points, they are important), wills must be in writing and signed by you on all pages, in the presence at the same time of two competent witnesses who must sign the end page (preferably all pages, but that’s not a formal requirement). Note that neither witnesses nor their spouses can inherit or be appointed as executor, trustee or guardian.

Video wills – are they valid?

Bearing in mind those required formalities, and the fact that an attempt to rely on a video recording as a will was abandoned in the case discussed below, it would be rash to assume that a “video will” ever be accepted as valid even though the concept has not to date been directly tested in our courts.

Rather observe all the formalities listed above, and think of using a video recording just as an adjunct to your formal will. For example, recording the will-signing process itself could help avoid any future dispute over your written will’s validity, whilst an informal video message to your family explaining to them why you have drawn your will the way you have could provide clarity and comfort to them when the time comes.

Non-compliance with formalities – there are “escape hatches”, but …

There are “escape hatches” in that our Wills Act provides that a document not complying with all formalities can be accepted as a valid will if it was drafted or executed by the deceased and if it was intended to be their will. You can also be authorised to both inherit and act as an executor, even if you or your spouse signed as a witness, if you can prove that there was no fraud or undue influence over the deceased. You can also be taken to have revoked a previous will in various ways.

But as we shall see from the two recent High Court cases discussed below, relying on any of those escape hatches is extremely unwise. At worst, your last wishes won’t be honoured, and at best you will be exposing your loved ones to the risk of prolonged and bitter litigation at the very worst time.

Case 1: A Covid-19 video-call attempt to replace a will fails

• A father had left everything to his children in a 2018 will. But, dying in hospital of Covid-19 in 2021, he made a video call to his farm manager indicating his wish to revoke the will and saying that his final instructions were that everything be left to his farming trust.
• As requested, the farm manager had a will to that effect drawn by attorneys and delivered it to the hospital (he was unable to deliver it personally due to Covid-19 restrictions then in place), but the father died before it could be given to him for confirmation and signature.
• The trust asked the High Court for an order declaring the 2018 will revoked and the 2021 unsigned will accepted as valid (it seems to have abandoned an argument that the video call itself was a will). The disinherited children opposed this application vigorously.
• The Court declined to validate the unsigned 2021 document, pointing out that the Wills Act’s provisions in this regard must be interpreted and applied strictly and narrowly. It’s analysis of the trust’s argument that the “impossibility principle” applied will be of great interest to lawyers, but the practical point of issue to most of us is that although it seems clear that the father wanted to make a whole new will, on the facts of this case only his written and signed 2018 will could be accepted as valid.

Case 2: Brothers at war, and a non-compliant will accepted as valid

• Another tragic case of a dying father trying to change his will, this time to disinherit one son (“JP”) in favour of the other (“SG”).
• The new will did not comply with the Wills Act’s formalities. Three witnesses signed it but not in each other’s presence, whilst the fact that one of the witnesses was SG’s wife formally disqualified him from inheriting or acting as executor.
• JP asked the Court to declare the will invalid so he could inherit under the laws of intestacy, whilst SG asked the Court to accept the will despite the non-compliance, and to allow him to inherit and to act as executor.
• On the particular facts of this case, including undisputed evidence of a major rift between JP and his father (in contrast to an extremely close relationship between SG and the father), the Court exercised its discretion in favour of SG.
• Firstly, it held that the will, despite the failure to comply with formalities, was indeed drawn by the father and intended by him to be his will. It was therefore accepted as valid.
• Secondly, it held that SG could both inherit and act as executor because he had proved a lack of fraud or undue influence over his father.

Different outcomes but a clear principle – failure to comply with all formalities risks your last wishes not being implemented and exposes your loved ones to dispute and litigation.

All of us are likely at some stage of our lives to have to address the challenges of a family member suffering from dementia. What can you do to help and protect them when they lose the mental capacity to handle their own legal and financial affairs?
After sinking the myth of the “power of attorney is forever” option, we set out three legal alternatives available to you, with notes on when they are available and the merits of each. Understanding these options will go a long way to helping you (and your family) navigate this difficult journey.

“Dementia is the plague of our time, the disease of the century” (Unattributed)

Dementia is a widespread medical condition that affects people of all ages but particularly the elderly and includes conditions like Alzheimer’s. One of the most significant challenges of dementia is the loss of mental capacity, making it difficult for individuals to make crucial decisions, including those related to their legal affairs, finances and care. This can be particularly problematic when family members are unprepared or unaware of the practical and legal implications.

Beware the Power of Attorney myth

One common misconception is that a signed Power of Attorney (PoA) can authorise a family member to take control of the individual’s financial affairs in perpetuity. In fact, a PoA is only valid as long as the person who granted it maintains “legal capacity”, in other words an understanding of its implications. If and when dementia kicks in, the PoA automatically becomes invalid.

Enduring Powers of Attorney, which continue even after someone loses legal capacity, are valid in some countries but are unfortunately not yet recognised in South Africa.

So, what are your legal alternatives for dealing with dementia?

You will typically have three legal options available –

1. Curatorship: This involves appointing a curator bonis through a High Court order to manage the financial affairs of the person with dementia (a curator ad personam may in rare cases also be needed to manage the person’s personal affairs). This process can be complex and expensive, but in some cases, it may be the only viable option available.
2. Administration: Similar to curatorship but less complex, less expensive, and quicker, this involves an application to the Master of the High Court for the appointment of an Administrator.It is only available when your family member is a “mentally ill person or person with severe or profound intellectual disability”, which excludes cases of purely physical frailty or disability, and suggests that in cases of mild dementia or mild cognitive impairment only curatorship is an option – but take legal advice on your specific circumstances. An extra element of cost and delay applies in larger estates, in that the Master must commission an investigation into any application where the assets involved are over R200,000 and the annual income is over R24,000 p.a.
3. Special Trust: An alternative option is to consider a trust or special trust, which can be established if your family member suffers from an early onset of dementia but is still lucid and has legal capacity. All trusts have advantages in that they allow individuals the freedom to choose upfront who the trustees will be and what powers and duties they will have, whilst special trusts come with significant tax benefits over ordinary trusts. Individualised professional advice is essential here.

Understanding the available legal avenues can help you navigate this difficult journey, and with proper planning, personalised legal advice and early action, you can ensure that your family member’s legal and financial well-being is protected at all times.

An access bond allows you to pay any extra funds that you have, into your home loan account. Bear in mind that your monthly bond repayment consists of amongst other things, the capital amount that you borrowed, and an interest component. If you then pay in more than you actually need to, this is credited to the capital amount. This means that the interest will be slightly less, the next month. You will also have access to this additional amount because you have paid it in advance.

An access bond offers a tax-free savings opportunity by allowing you to effectively save money and at the same time, save interest on the loan!

This facility is either included in your home loan when your finance application is approved, or you can apply at your bank once your bond has been registered.

There are two different ways to set up your access bond:

The first is the default facility where your monthly instalment (capital and interest) stays the same each month, regardless of any extra amounts you pay in, and your home loan term will then decrease according to the extra funds you pay.

The second and alternative option is for the debit order amount to be adjusted, to take into account the reduced capital owing, which determines the amount of interest that is payable. If you want to pay off the bond sooner, the first option is then the better one.

It is important to note however that if you do build up a credit in your home loan (being the access facility we are discussing), then, once you do decide to access this credit and you draw money from the home loan account, then the interest repayment will of course increase again because now your home loan will be more than it was the previous month. But, that said, this is a far cheaper way of “borrowing” money than a short-term loan, where the interest rates are far higher than with a home loan.

The advantages of the access bond facility are therefore unlimited deposits, convenience, you save interest on your home loan, all at no additional fees. All of this whilst at the same time, your home appreciates in value.

Your tenants stop paying rental, but stubbornly refuse to vacate whilst you must keep on shelling out for bond instalments, rates, repairs and municipal services. The temptation grows – cut off their electricity and water, stop them freeloading off you, get them out so you can re-let to better tenants.

A recent High Court decision demonstrates once again why taking the law into your own hands like that is playing with fire. We’ll end with a note on why your lease should always be in writing, clear and comprehensive.

“A fundamental principle in issue here is that nobody may take the law into their own hands. In order to preserve order and peace in society the court will summarily grant an order for restoration of the status quo where such deprivation has occurred, and it will do so without going into the merits of the dispute.” (Excerpt from judgment below)

Many a landlord is tempted to go the “self-help” route when non-paying tenants refuse to pay up and also refuse to leave. Holding costs mount with not a cent in rental income to show for it, the landlord gets desperate and locks are changed, access codes blocked, electricity and water cut off.

But what if, instead of meekly packing up and vacating, the tenant rushes off to court? As we shall see from our discussion of a recent High Court decision below, now the landlord has a real problem, regardless of whether or not the tenant has lost its legal right of occupation.

You cannot take the law into your own hands

• A tenant under a verbal lease dating back some 27 years, and in terms of which the rental included payment for water and electricity, stopped paying rental in January 2021.
• The landlord, citing both failure to pay rental and allegations of unlawful sub-letting and overcrowding, gave the tenant notice of eviction. The tenant refused to vacate, and had her attorney warn the landlord against evicting or cutting services without a court order.
• When the landlord nevertheless went ahead and cut the electricity and water supplies, claiming this to be a lawful attempt to reduce its losses since the (unpaid) rental included the supply of electricity and water, the tenant asked the High Court to (among other things) grant it a “spoliation order” (an order giving possession back to someone deprived of it without due legal process) restoring services immediately to the premises.
• The case didn’t go well for the landlord, and it is now back to square one after eighteen months of no rental income, with the added costs of two sets of legal bills to pay. Landlords, said the Court, must pursue the remedies at their disposal to enforce payment of rental in accordance with the law. “Landlords are not entitled to take the law into their own hands.”
• A vitally important factor to bear in mind here is that at this stage of proceedings a court will not enquire into whether or not the tenant has a legal right to be in possession: “Irrespective of the lawfulness or otherwise of the occupation, a landlord may not disconnect water and electricity without the intervention of a court.” (Emphasis supplied).
• Relevant to the Court’s decision was the fact that on the facts of this case, supply of services was not a “personal right” between the parties but part of the tenant’s possession of the property: “To my mind, the supply of electricity and water is not merely contractual, but an incident of the possession of the property.” That can be a fine distinction, so specific legal advice is essential if you are a landlord (or a tenant) embroiled in a dispute of this nature.
• The end result – the landlord was ordered to restore electricity and water immediately to the tenant and must pay the tenant’s legal costs.

Lessons for landlords

1. You are playing with fire if you take matters into your own hands when dealing with problematic tenants. No matter how intransigent they may be and no matter how unlawful their occupation, the only safe route is to follow the appropriate legal channels with specific legal advice and assistance –a. All a tenant needs to prove to get a spoliation order against you (with costs) is that they were in “peaceful and undisturbed” possession, and that you unlawfully deprived them of that possession. Nothing more.

   b. And that’s by no means your only risk – you could also be charged criminally in terms of the Rental Housing Act, which provides that anyone who “unlawfully locks out a tenant or shuts off the utilities to the rental housing property” faces a fine and/or two years’ imprisonment.

2. Secondly, it is clear that one of the landlord’s practical problems in this matter was the fact that (amazingly after 27 years) it had no written lease in place. That made it difficult to prove the terms of the lease, the parties’ rights and duties, duration, grounds for termination, and notice periods. Although a verbal lease is valid in law (for now anyway; change is in the wind on that one), a properly drawn written lease is vital to protect your rights!