Property Law Update


Issue 03 – 2018

OSTRICH “ATTACKS” VISITOR ON PROPERTY: WHO IS LIABLE?

Van der Westhuizen v Burger (204/2017) [2017] ZASCA 178 (1 December 2017)

Does a property owner become liable for injuries sustained by a visitor who ran from an ostrich on the property which he thought was attacking him? Yes, this is entirely possible, but the facts of the incident must support a finding both of causation and liability, as the present matter illustrates.

The Judgment
Summary of the Judgment

STBB’s STSMA REFERENCE GUIDE

In this, the forty-sixth set of notes for your STSMA Reference Guide, Prescribed Management Rule 25 is discussed.

Prescribed Management Rule 25
(N.B. Print in landscape)

Issue 02 – 2018

MUST A RIGHT OF FIRST REFUSAL (PRE-EMPTIVE RIGHT) IN RESPECT OF LAND REALLY BE IN WRITING?

Mokone v Tassos Properties CC and Another (CCT113/16, CCT291/16) [2017] ZACC 25; 2017 (10) BCLR 1261 (CC); 2017 (5) SA 456 (CC) (24 July 2017)

Yes and no. For long, and because of sound policy considerations, our law ruled that pre-emptive rights relating to the sale of immovable property must be in writing in order to be valid and binding. For example, a 12-month lease agreement contains a right of pre-emption in favour of a tenant. One further oral renewal of the lease follows and thereafter the landlord and tenant make a one-line entry on the ‘old’ lease mentioning it is extended for a further period. During this further period, the landlord sells the property subject to the lease. The lease expires and the tenant refuses to vacate, quoting the pre-emptive right that existed in the old lease. One of the findings in this matter was that the granting of a pre-emptive right is not an ‘alienation’ and therefore needs not comply with the “in writing and signed” requirements of the Alienation of Land Act, rendering the provision in the ‘old’ lease still valid. This is a dramatic change to the previous position. This despite, transparency and considerations relating to the accuracy of recall if the provisions of an agreement is not reduced to paper, still call for such agreements to be in writing.

The Judgment
Summary of the Judgment

STBB’s STSMA REFERENCE GUIDE

In this, the forty-fifth set of notes for your STSMA Reference Guide, Prescribed Management Rule 24 is discussed

Prescribed Management Rule 24
(N.B. Print in landscape)

Issue 01 – 2018

IS A HARD-HITTING CONTRACTUAL TERM CONSTITUTIONALLY UNFAIR AND HENCE UNENFORCEABLE?

Mohamed’s Leisure Holdings (Pty) Ltd v Southern Sun Hotel Interests (Pty) Ltd (183/17) [2017] ZASCA 176 (1 December 2017)

X had regularly, for 35 years, maintained rental payments under a lease. However, due to oversight on X’s bank’s side, rental was paid late on two occasions, a few months apart. The lease agreement allowed for immediate cancellation of the lease on breach, as the parties did not include a clause providing that an opportunity to rectify the breach must be given to the defaulting party. The landlord cancelled and the tenant disputed its right to evict it in the circumstances and called on considerations of ubuntu to be read into the agreement. The Supreme Court of Appeal found in favour of the landlord and the judgment gives a valuable insight into all the interests that must be balanced in such an enquiry.

The Judgment
Summary of the Judgment

STBB’s STSMA REFERENCE GUIDE

In this, the forty-fourth set of notes for your STSMA Reference Guide, Prescribed Management Rule 23 is discussed.

Prescribed Management Rule 23
(N.B. Print in landscape)

Issue 35 – 2017

ROAD RULES IN HOMEOWNERS’ ASSOCIATIONS: NEWS!

Singh and Another v Mount Edgecombe Country Club Estate Management Association Two (RF) (NPC) and Others (AR575/2016) [2017] ZAKZPHC 48 (17 November 2017)

To make provision for its residents, be it the elderly, those enjoying the availability of golf carts or the owners generally, many homeowners’ associations have rules regarding the use of roads within the estate. Owners are bound to the rules by virtue of conditions in the sale agreement in terms of which they purchased their homes. But roads commonly used by the public are ‘public roads’ and regulated by the provisions of the National Road Traffic Act, with the Minister as authority to make rules regarding use thereof and exceptions. Does this trump the homeowners’ association’s rules?

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The Judgment
Summary of the Judgment

LEASE INVALIDATED BY ABSENCE OF APPROVED BUILDING PLANS AND OCCUPATION CERTIFICATE?

Wierda Road West Properties (Pty) Ltd v SizweNtsalubaGobodo Inc (1156/2016) [2017] ZASCA 170 (1 December 2017)

It is generally appreciated that when you build or renovate, it is a requirement to obtain building plan approval from the local authority first. So too, when a new building is erected, it is necessary to obtain an occupancy certificate which confirms, amongst other things, that it was erected in compliance with building legislation. The question in the appeal in this matter was whether the absence of these pre-requisites in respect of leased premises rendered the lease agreement invalid, thereby absolving the tenant from the obligation to pay rental.

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The Judgment
Summary of the Judgment

Issue 34 – 2017

SALE AGREEMENT ‘STANDARD’ WARRANTY: APPLICABLE TO PERSON SIGNING O.B.O. A TRUST?

Goldex 16 (Pty) Ltd v Capper NO and Others (24218/2013) [2017] ZAGPJHC 305 (18 October 2017)

The facts of this matter make for a textbook example of things that can go awry when the basic requirements of dealing with a trust as a party to a transaction are not adhered to. The sale agreement was void as the trust’s representative signed it without first obtaining the written authority to do so from the other trustee. The seller then sought to hold the trustee, in his personal capacity, bound to the agreement by relying on the ‘usual’ warranties clause contained in agreements pertaining to natural persons signing on behalf of entities (i.e. that the signatory warrants that he is “authorised to enter into the agreement on behalf of the trust, that all conditions had been complied with by the trust in order to make the agreement binding,” and so forth). Could he do so?

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the forty-third set of notes for your STSMA Reference Guide, Prescribed Management Rule 22 is discussed.

read more
Prescribed Management Rule 22
(N.B. Print in landscape)

Issue 33 – 2017

LAND EXPROPRIATION: DETERMINING VALUE OF THE LAND FOR COMPENSATION

Uys N.O and Another v Msiza and Others (1222/2016) [2017] ZASCA 130 (29 September 2017)

Should the future development potential of land to be expropriated be accounted for in the calculation of the market value of the property when determining the compensation to be awarded to the successful land claimant? The current owner in this matter thought so.

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the forty-second set of notes for your STSMA Reference Guide, Prescribed Management Rule 21 is discussed.

read more
Prescribed Management Rule 21
(N.B. Print in landscape)

Issue 32 – 2017

UNPAID RENTAL – WHEN A TENANT CANNOT CLAIM SET OFF

Tudor Hotel Brasserie and Bar (Pty) Ltd v Hencetrade 15 (Pty) Ltd (793/2016) [2017] ZASCA 111 (20 September 2017)

This matter addresses issues surrounding set-off of rental where a tenant argues that it did not receive vacant occupation of the entire leased premises. The lease agreement obliged the lessee to make payment of the rental ‘on or before the first day of each month’ and ‘without any deductions or set off whatsoever’, but the tenant argued that due to the principle of reciprocity, it was entitled to set-off nonetheless. The Western Cape High Court found in favour of the landlord and the present matter deals with the appeal to the SCA.

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the forty-first set of notes for your STSMA Reference Guide, Prescribed Management Rule 20 is discussed.

read more
Prescribed Management Rule 20
(N.B. Print in landscape)

Issue 31 – 2017

PRE-EMPTIVE RIGHTS: ‘IN WRITING’ NO LONGER A REQUIREMENT?

Mokone v Tassos Properties CC and Another (CCT113/16, CCT291/16) [2017] ZACC 25; 2017 (10) BCLR 1261 (CC); 2017 (5) SA 456 (CC) (24 July 2017)

It has for long been a rule of our law that pre-emptive rights relating to the sale of immovable property must be in writing in order to be valid and binding. In finding in this matter that the granting of a pre-emptive right is not an ‘alienation’ and therefore needs not comply with the “in writing and signed” requirements of the Alienation of Land Act, new considerations sprout. Property owners should be wary of making verbal representations with regard to pre-emptive rights in respect of immovable property to avoid a scenario such as in the present matter where a subsequent transfer of a property to a third party is attacked, 18 months later, because of an oral lease granted to a previous tenant.

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the fortieth set of notes for your STSMA Reference Guide, Prescribed Management Rule 19 is discussed.

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PPrescribed Management Rule 19
(N.B. Print in landscape)

Issue 30 – 2017

TITLE DEED CONDITIONS OBLIGING AN OWNER TO BUILD

Bondev Midrand (Pty) Limited v Puling and Another, Bondev Midrand (Pty) Limited v Ramokgopa (802/2016, 803/2016) [2017] ZASCA 141 (2 October 2017)

Developers often insert a provision in a purchaser’s title deed obliging him to build a home on the vacant erf within a certain time. There are various sound reasons for doing so, amongst others, to bolster purchasers’ investment in the development and limit the security risks sometimes associated with continuous building activities in a development. Failure to do so, gives the developer the right to repurchase the vacant stand, usually at the initial sale price. Is this a personal right on the side of the developer meaning that it prescribed if not exercised within 3 years after an owner has failed to erect a home?

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the thirty-ninth set of notes for your STSMA Reference Guide, Prescribed Management Rule 18 is discussed.

read more
Prescribed Management Rule 18
(N.B. Print in landscape)

Issue 29 – 2017

VALID CANCELLATION REQUIRES MORE THAN STATING THAT ANOTHER IS IN BREACH

Smith and Another v Patsalosavis and Another (85341/2014) [2017] ZAGPJHC 230(11 August 2017)

Procedural ‘formalities’ often crystallize from lessons learnt in everyday transacting. For the cancellation of agreements, unless stipulated otherwise, formalities dictate that the defaulting party must be given clear details of the alleged breach, be afforded a timeframe in which to rectify it, and must be advised of the other party’s right to elect, on a failure to rectify the breach, whether to keep the defaulting party to the agreement or to cancel it (and claim damages). This must be followed with a formal cancellation, if the breach is not addressed. This supports an understanding of the “why” and “how to” when things go wrong. Non-compliance with these rules is problematic, as this judgment shows.

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The Judgment
Summary of the Judgment

 

STBB’S STSMA REFERENCE GUIDE

In this, the thirty-eighth set of notes for your STSMA Reference Guide, Prescribed Management Rule 17 is discussed.

read more
Prescribed Management Rule 17
(N.B. Print in landscape)