Property Law Update
CHANGE OF USE: A TEST FOR THE SECTIONAL TITLE SCHEMES MANAGEMENT ACT
Mineur v Baydunes Body Corporate and Others (11020/2018)  ZAWCHC 59;  3 All SA 611 (WCC) (24 May 2019)
In this matter, the body corporate of a sectional title scheme tried to legalise the historical renovations (change of use) that various owners had made to their sections. A special resolution was passed at a general meeting, but this was challenged by an owner who claimed that a unanimous resolution was required, even if, as was the case here, the change of use relates only to part of a section. What is the position? The Judgment can be viewed here.
COMMERCIAL LEASE DISPUTE: CUTTING ELECTRICITY AND CHANGING LOCKS
Lau v Real Time Investments 165 CC (50134/2019)  ZAGPPHC 313 (23 July 2019)
When a dispute arose regarding the manner in which the lessor was billing the tenant for electricity, the lessor decided to cut the electricity and later changed the locks to the premises depriving the tenant of access to and possession of the premises. Could he?
FREE REIGN IN TRUSTS?
Ferreira and Another v Van der Merwe N.O and Others (2727/2018)  ZAECPEHC 39 (13 June 2019)
“Trustees of a trust are bound by the four corners of the trust deed and have to give effect thereto. If a trust deed does not make provision for something, as a general rule, it cannot be done.” This statement from the judgment gives a clue regarding the dispute addressed here: can a trustee manipulate provisions of the trust deed to suit changed circumstances, such as a serious fall-out with a beneficiary? The Judgment can be viewed here.
CSOS ACTION: DOES AUTHORITY EQUATE TO LEGAL CAPACITY TO ACT?
The Body Corporate of Duroc Centre v Singh (AR99/18)  ZAKZPHC 29 (13 May 2019)
A valuable lesson in this judgment for trustees, managing agents and property managers. In short, it related to the question whether someone who was appointed as a property manager by a company that owns units in a sectional title scheme has the necessary locus standi (legal capacity to act) to lodge an application at the Community Schemes Ombud. The incumbent was authorised to do so by a resolution passed by the company, but the question remained whether this met the requirements of the legislation giving locus standi to owners and those materially affected by a dispute.
ORAL RIGHT OF ACCESS TO PROPERTY GETS YOU NOWHERE
Roux and Others v Groenewald and Others (40691/2018)  ZAGPPHC 273 (14 June 2019)
This judgment serves as a reminder that the Alienation of Land Act requires that the granting of an interest in land by one person to another must be recorded in a written agreement to be valid. Here X bought a portion of Y’s property, having orally also negotiated for a right of access granting X a right of way over Y’s property to the new portion. This was never recorded in the sale agreement of the property or separately. Was the oral agreement binding?
NHBRC ENROLMENT CERTIFICATE: ISSUING OF AMENDED VERSION WHEN SELLING VALUE DIFFERS FROM ENROLMENT VALUE
Uniqon Wonings (Pty) Ltd v National Home Builders Registration Council (2019/35086)  ZAGPPHC 211 (10 June 2019)
This judgment deals with an acrimonious battle between a developer and the NHBRC, the former seeking the issue of revised enrolment certificates from the NHBRC, as the selling price of units it erected differed from the value declared on enrolment.
SPLITTING HAIRS OVER SPLITTING COMMISSION
Beijers v Harlequin Duck Properties 231 (Pty) Ltd t/a Office Space Online (1216/2017)  ZASCA 89 (31 May 2019)
This judgment deals with a dispute between two commercial brokers regarding payment of commission. In the written appointment of Agent A at the estate agency, it was recorded that Agent A was entitled to commission where she was the effective cause of a transaction. Agent B, a colleague who in some way assisted with the transactions, later argued that as he assisted Agent A, he was entitled to part of her commission because Agent A was not the sole cause of the successful deal. Was such interpretation warranted in the context? Could Agent B rely on a so-called tacit term that such was their arrangement; or, rely on an oral agreement changing the terms of the written appointment where the written appointment contained a non-variation clause?.
HOME BUILDER BUILDING HOME TO RENT MUST ALSO REGISTER WITH NHBRC
National Home Builders’ Registration Council & Another v Xantha Properties 18 (Pty) Ltd (780/2018, 784/2018)  ZASCA 96 (21 June 2019)
According to the Housing Consumers Protection Measures Act 95 of 1998, all new homes must be enrolled with the NHBRC 15 days prior to construction and an enrollment fee must be paid. Home enrolment insures consumers against poor building practices and permits the NHBRC to conduct building inspections at key stages of construction. The question that was disputed in this matter was whether this requirement applied where the builder intended to lease the buildings and not sell them, effectively then being required to insure with the NHBRC against itself.
ACCESS TO ELECTRONIC COMMUNICATIONS NETWORKS UNDER YOUR PROPERTY
Dennegeur Estate Home Owners Association and Another v Telkom SA SOC Ltd and Another (366/2018)  ZASCA 37 (29 March 2019)
If Telkom was the incumbent network service provider in respect of a development managed by a homeowners association, could it argue that it could prohibit other service providers from deploying alternative facilities, such as a fibre-optic cabling network, in the existing infrastructure in the estate, or must the newcomer dig additional trenches and lay new ducts to do so? The Supreme Court of Appeal held in this matter that Telkom did not possess the vacant space in the ducts and sleeves which was subsequently occupied by Vodacom and that Vodacom’s installation of fibre-optic cabling in the existing ducts was therefore not an act of spoliation.
MUST A HOME BUILDER THAT IS A TRUST REGISTER WITH THE NHBRC?
National Home Builders Registration Council v Adendorf and Others (406/2018)  ZASCA 20 (26 March 2019)
There has been a handful of judgments dealing with the requirement imposed on home builders to register with the National Home Builders Council. In this matter, the Court was asked to decide whether or not a Trust fell within the relevant definitions that determined that no ‘person’ shall carry on the business of a home builder unless that person was registered as a home builder with the Council. The Supreme Court of Appeal dealt thriftly with the arguments of the Trust that it was not a ‘person’ for purposes of this legislation.
CANCELLING INSTALMENT SALES: DUE DATES OF PAYMENTS CRITICAL
Amardien and Others v Registrar of Deeds and Others (CCT212/17)  ZACC 47; 2019 (2) BCLR 193 (CC) (28 November 2018)
The Alienation of Land Act prohibits the seller in an instalment sale to receive consideration in respect of a sale until such time as the agreement is recorded against the title deed concerned. In this case, which made it all the way up to the Constitutional Court, a seller had attempted to cancel numerous instalment sales on the basis of purchasers being in default. The seller, for having received some payments before the agreements were recorded against the title deeds, was in contravention of section 26 of the ALA. Because of this, the purchasers argued their obligations only became due and payable once the agreements were recorded, and because the NCA notices issued to them failed to inform them of the amount(s) due and the exact date of the recordal, they were unable to ascertain when the debt became due and were therefore unable to make payment as required.
SPEED LIMITATIONS IN HOMEOWNERS’ ESTATES: IT’S A CONTRACT AND ENFORCEABLE
Mount Edgecombe Country Club Estate Management Association II (RF) NPC v Singh and Others (323/2018)  ZASCA 30 (28 March 2019)
The thorny issue whether a homeowners’ association may validly impose speed restrictions in respect of roads in the estate has finally been laid to rest, the Supreme Court of Appeal finding that an association may indeed do so. And, where the rules of the association lay down a penalty for contravention, owners who contractually bound themselves to the rules when purchasing in the estate are liable. The reasoning and context is contained in the summary.
AGENCY CONVERTING FROM CC TO COMPANY: EXISTING FFC STILL VALID?
Tria Real Estate (Pty) Ltd v Labuschagne and Another (5583/2018)  ZAFSHC 198 (6 December 2018)
Where an estate agency converted form a close corporation to a company, are the Fidelity Fund Certificates issued to the close corporation and its members sufficient and compliant with the requirements of the Act for the purposes of the operation of the (new) company and its directors? The judgment answers this question and illustrates the outcome of a dispute between an estate agency and an ex-intern employee regarding restraint of trade and the validity of the agreement they had entered into.
SELLING A PROPERTY IN CONTRAVENTION OF SECTION 10 OF THE HOUSING ACT
Tapala and Another v Tlebetla and Others (89400/16)  ZAGPPHC 46 (22 February 2019)
In a complex set of facts where there was fraud and the sale of a property to two different purchasers, issues arose regarding the correct interpretation of section 10 of the Housing Act. This section of the Act finds application in the sphere of sustainable housing developments and it has a prohibition against the sale of a property within a period of 8 years if it was not first offered to the relevant provincial housing authority. The question the court had to determine here was what happens where a sale and transfer occurred in contravention of these principles.
BUILDING OBJECTIONABLE, UNSIGHTLY OR DISFIGURING OF AREA? APPLY LEGITIMATE EXPECTATION TEST
Trustees of the Simcha Trust v Da Cruz and Others; City of Cape Town v Da Cruz and Others (CCT125/18; CCT128/18)  ZACC 8 (19 February 2019)
This Constitutional Court judgment provides clear guidelines as to the proper import and interpretation of section 7(1) of the Building Standards Act which finds application when a local authority is asked to approve building plans. The Court confirmed that the ‘legitimate expectation’ test must be applied by the decision-makers, who must, amongst other things, objectively determine whether the proposed building will probably, or in fact, be so disfiguring of the area, objectionable or unsightly that it would exceed the legitimate expectations of a hypothetical owner of a neighbouring property. The judgment illustrates the practical application hereof.
IS AN ARBITRATION CLAUSE IN AN (ALLEGED) VOID AGREEMENT ENFORCEABLE?
Seabeach Property Investment No 28 v Nunn (18310/18)  ZAWCHC 9 (22 February 2019)
If you conclude a contract for the sale of a property and include an arbitration clause to deal with disputes, will that clause still stand if the validity of the sale agreement is disputed because of a material misunderstanding relating to the nature of exclusive use areas that were included in the sale? This question was addressed in the judgment under discussion. Ultimately, the answer depends on the intention of the parties when they contracted, as it appears from the wording used in the agreement.
LEASE WORDING: AGREEING TO AGREE TO RENEW ON NEW TERMS: ENFORCEABLE?
Violetshelf Investments (Pty) Ltd v Chetty (24858/18)  ZAGPJHC 1 (28 January 2019)
This judgment deals with the scenario where a tenant is granted an option to renew a lease “provided that the parties agree in writing to the rental, conditions and provisions” of the new lease. Such a provision, if a court were to enforce it, would be to coerce a landlord to conclude an agreement with a tenant with whom it perhaps no longer wants to have as a tenant. In our law it is unenforceable, unless a way out is provided for. The judgement illustrates how.
EXPROPRIATION BY LOCAL AUTHORITY: DECISION-MAKER MUST BE APPRISED OF ALL FACTS
Kohler Bricks (Pty) Ltd v City of Cape Town and Another (21362/2017)  ZAWCHC 6 (15 February 2019)
When there is real urgency to secure continued access to a landfill for solid waste disposal, a municipality can contemplate issuing expropriation notices to ensure it can address waste generated daily in its jurisdiction. The matter in consideration dealt with a scenario where the City approved an expropriation notice after it seemed that they had reached a deadlock in negotiating access to the landfill. However, as a last resort, between the initial commencement of the paperwork to effect expropriation and submitting it to the mayor’s office for sign-off, the land-owner granted an extension to the City. This was not communicated to the decision-maker and the notice was issued. Was this fair administrative action as required by PAJA?
ONCE-OFF LENDERS NEED TO REGISTER WITH CREDIT REGULATOR
Du Bruyn NO and Others v Karsten (929/2017)  ZASCA 143; 2019 (1) SA 403 (SCA) (28 September 2018)
For a while now in our law, there was some uncertainty whether or not a person who makes a once-off arm’s length loan to another really needs to register with the Credit Regulator in order to ensure that the law treats the agreement as valid and binding. In this matter, the Supreme Court of Appeal held that this was indeed the condition stated in the National Credit Act. Despite the apparent reasonableness of not requiring such registration in such instance, the Court stated that it was bound to give effect to the clear and unambiguous wording of the Act.
TAKE CARE HOW YOU WORD YOUR WILL AND TRUST DOCUMENT WHEN MAKING PROVISION FOR DESCENDANTS
Harvey NO and Others v Crawford NO and Others (1016/2017)  ZASCA 147 (17 October 2018)
This judgment deals with a stinging issue: where a trust donor made provision that his children’s descendants or’ issue’ would inherit, would this include the adopted children of his daughter who never had her own children? At the time the Trust deed was executed (1953), the Wills Act required that such will or trust deed should clearly convey an intention to include them, otherwise they would be excluded. The applicable legislative provisions have changed over time, but our law still upholds the principle of freedom of testation.