Property Law Update


Issue 21 – 2017

FUTURE RATES IN CLEARANCE CERTIFICATES: NOT PERMITTED SAYS SYSTEMS ACT

Nelson Mandela Bay Municipality v Amber Mountain Investments 3 (Pty) Ltd (576/2016) [2017] ZASCA 36 (29 March 2017)

Local authorities usually include a certain amount of future (estimated) rates when issuing figures payable for a rates clearance certificate to be issued. This is generally assumed to cover the seller’s future rates liability from the date the certificate is issued up to the time of transfer. In this instance, the municipality charged the rates payable for the full financial year. The question addressed here was whether, for purposes of issuing a rates clearance certificate, the seller of immovable property could legally be held liable to pay the full annual rate on the property or only the rates calculated until the property is transferred.

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the twenty-ninth set of notes for your STSMA Reference Guide, Prescribed Management Rule 8 is discussed.

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Prescribed Management Rule 8
(N.B. Print in landscape)

Issue 20 – 2017

CHANGING YOUR MIND ON THE OTHER’S BREACH OF CONTRACT

Primat Construction v Nelson Mandela Bay Metropolitan Municipality (1075/2016) [2017] ZASCA 73 (1 June 2017)

Our law generally holds that if party A repudiates a contract, party B may choose to abide by the contract and enforce A’s performance; or accept the repudiation and cancel the agreement and claim damages from A. Once the choice is made, B cannot turn around and change his mind. However, as was argued in this case, would B be allowed to change tack and cancel the agreement and claim damages if A persisted in the breach by evincing an unequivocal intention not to remedy the breach?

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the twenty-eighth set of notes for your STSMA Reference Guide, Prescribed Management Rule 7 is discussed.

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Prescribed Management Rule 7
(N.B. Print in landscape)

Issue 19 – 2017

LEASE NON-COMPLIANCE: TENANT CANNOT DEMAND LANDLORD TO CANCEL RATHER THAN CLAIM COMPLIANCE

Clemlen Investments No. 10 (Pty) Ltd v Recycle Yourself (Pty) Ltd (1328/2017) [2017] ZAECPEHC 32 (13 June 2017)

In this matter the tenant had a recycling business which meant that it received deliveries of material in large containers. The lease agreement provided that containers may be on the premises only whilst loading was in progress. The tenant contravened and, at times, left the containers on the premises even when no loading was taking place. One of the issues raised by the tenant, when faced with a claim from the landlord for an order that the recycling business comply with the lease agreement, was that the landlord should rather exercise its right to cancel the agreement. What does the law say?

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The Judgment
Summary of the Judgment

STBB’S STSMA REFERENCE GUIDE

In this, the twenty-seventh set of notes for your STSMA Reference Guide, Prescribed Management Rule 6 is discussed.

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Prescribed Management Rule 6
(N.B. Print in landscape)

Issue 18 – 2017

WHEN NON-COMPLIANCE WITH AGREEMENT CANNOT BE HELPED

Tsangarakis N.O. and Another v Kgato Project Management (Pty) Ltd and Another (1021/2017) [2017] ZAFSHC 76 (8 June 2017)

We all know that agreements are binding and that parties must therefore comply with the provisions thereof. In fact, an aggrieved party generally has the right to an order of specific performance if the other party fails to be true to his word. Would a court have a discretion not to grant specific performance in certain instances? This was the question that the Court addressed in this matter where there was a rather ‘wealthy’ purchaser with cash flow problems.

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The Judgment
Summary of the Judgment

STBB’S STSMA REFERENCE GUIDE

In this, the twenty-sixth set of notes for your STSMA Reference Guide, Prescribed Management Rule 5 is discussed.

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Prescribed Management Rule 5
(N.B. Print in landscape)

Issue 17 – 2017

LEARNING AFTER TRANSFER THAT ALL TRUSTEES DID NOT SIGN

Jacobs N.O. and Others v Salut La Vie Estate (Pty) Ltd; In re: Salut La Vie Estate (Pty) Ltd v Jacobs N.O. and Others (1146/2016) [2017] ZANCHC 11
(10 February 2017)

The abstract theory of transfer means, in essence, that where there was consensus between two parties to transfer a property, coupled with registration of transfer in a deeds office, then an underlying defect in the sale agreement does not affect the validity of transfer. Could it then be argued that a transfer based on an agreement in which a trust signed a sale agreement with only two of the three required trustees signing, was unassailable? The question raised here was in the context of an exception to a seller’s claim, but the conclusion is a warning note that trustees must ensure that all signatories are party to an agreement.

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The Judgment
Summary of the Judgment

STBB’S STSMA REFERENCE GUIDE

In this, the twenty-fifth set of notes for your STSMA Reference Guide, Prescribed Management Rule 4 is discussed.

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Prescribed Management Rule 4
(N.B. Print in landscape)

Issue 16 – 2017

AGREEING TO ENTER INTO A SALE AGREEMENT LATER

Abigak 1 General Trading & Investment CC v Gani and Another; Gani and Another v Balkin and Others (1184/16; 6620/16) [2017] ZAGPJHC 126
(5 May 2017)

It happens from time to time that persons agree ‘in principle’ to enter into a formal agreement about a specific matter. In this judgment, the court grappled with just such a scenario relating to the sale of land. The question was whether an oral agreement to the effect that a seller will enter into a written sale agreement of land with the buyer can trump a subsequent sale and transfer of the property to a third party.

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The Judgment
Summary of the Judgment

STBB’S STSMA REFERENCE GUIDE

In this, the twenty-fourth set of notes for your STSMA Reference Guide, Prescribed Management Rule 3 is discussed.

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Prescribed Management Rule 3
(N.B. Print in landscape)

Issue 15 – 2017

FARM WORKER RESIDENCE BASIC RENOVATIONS: OWNER’S CONSENT REQUIRED?

Daniels v Scribante and Another (CCT50/16) [2017] ZACC 13 (11 May 2017)

Dispossession of land was central to apartheid. To address this injustice partly, section 25(6) of the Constitution provides that a person or community whose tenure of land is legally insecure as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to tenure which is legally secure or to comparable redress. The Extension of Security of Tenure Act is the law that gives effect to this right and its provisions must be interpreted against this history. As such, although the Act does not provide specifically that an occupier of agricultural land may make renovations to his home to make it habitable – without the land owner’s consent – the law must be interpreted to provide for this, the Constitutional Court found in this landmark judgment.

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The Judgment
Summary of the Judgment

STBB’S STSMA REFERENCE GUIDE

In this, the twenty-third set of notes for your STSMA Reference Guide, Prescribed Management Rules 1 and 2 are discussed.

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Prescribed Management Rules 1 and 2
(N.B. Print in landscape)

Issue 14 – 2017

BANK’S LETTER ENOUGH FOR BOND CLAUSE FULFILMENT OR MUST QUOTATION BE PROVIDED?

Phepeng and Another v Estate Late Ame Combrinck and Others (792/2017) [2017] ZAFSHC 54 (23 March 2017)

Clauses making a transaction subject to a buyer’s successful loan application are common features in sale agreements of land. The wording in these clauses often rings similar, requiring a letter of offer, a quotation and a pre-agreement to be provided as proof that the loan has been obtained. This matter dealt with an agreement that required such documentation to be obtained by the purchaser, with no obligation that these had to be provided to the seller or his agent. As such, communication by the purchaser to the seller, accompanied by the bank’s letter confirming that it approved the loan application was regarded as adequate to fulfill the suspensive condition. The seller’s argument that the sale had lapsed as no quotation and a pre-agreement were provided was rejected.

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The Judgment
Summary of the Judgment

STBB’s STSMA REFERENCE GUIDE

In this, the twenty-second set of notes for your STSMA Reference Guide, regulation 6 of the Act is discussed.

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Regulation 6 (Notifications)
(N.B. Print in landscape)

Issue 13 – 2017

PAYMENT OF FUTURE RATES FOR CLEARANCE CERTIFICATES NOT ALLOWED IN TERMS OF SYSTEMS ACT

Nelson Mandela Bay Municipality v Amber Mountain Investments 3 (Pty) Ltd (576/2016) [2017] ZASCA 36 (29 March 2017)

The question addressed in this judgment was whether, for purposes of issuing a rates clearance certificate, the seller of immovable property can be held liable to pay the full annual rate on the property or only the rates calculated until the property is transferred.

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The Judgment
Summary of the Judgment

STBB’S STSMA REFERENCE GUIDE

In this, the twenty-first set of notes for your STSMA Reference Guide, regulation 5 of the Act is discussed.

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Regulation 5 (Notifications)
(N.B. Print in landscape)

Issue 12 – 2017

BUY-BACK CLAUSES THROWN A CURVE BALL

Bondev Midrand (Pty) Ltd v Madzhie and Others (63297/15) [2016] ZAGPPHC 1097
(19 December 2016)

Sale agreements in new developments often include clauses entitling the developer to claim re-transfer of the land sold, against payment of the initial purchase price, if the purchaser does not erect a dwelling in a specified time. The clause is intended to ensure completion of the development within a certain timeframe to support and boost buyers’ investment in the development and to avoid the security risks and disturbances associated with continued building works. Generally our courts enforce these clauses, but the Gauteng division has now raised objections to enforcing such a provision which it deems is contrary to public policy, amongst other things.

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the twentieth set of notes for your STSMA Reference Guide, regulation 4 of the Act is discussed.

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Regulation 4 (Powers of a provisional curator ad litem and curator ad litem)
(N.B. Print in landscape)