Property Law Update
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.
SUSPENSIVE CONDITION FULLFILLED? ESTATE AGENCY SUCCESSFULLY CLAIMS COMMISSION
PG Sharedealing (Pty) Ltd v First Realty Randburg (Pty) Ltd t/a Chas Everitt International Property Group (A5058/2017)  ZAGPJHC 645 (3 December 2018)
This judgment dealt, amongst other things, with the question whether an estate agent exercised a discretion afforded to it to extend a bond due date. The seller argued the wording of the bond clause in the Offer to Purchase did not constitute an ‘automatic extension’, or failing that and furthermore, that the estate agency was not entitled to commission due to alleged non-compliance with the Estate Agency Affairs Act’s Fidelity Fund Certificate requirements. This is how things unfolded…
POWERS OF ADJUDICATORS OF THE COMMUNITY SCHEMES OMBUD
Evergreen Property Investments (Pty) Ltd v Messerschmidt (A409/2017)  ZAGPPHC 786 (10 October 2018)
The Office of the Community Schemes Ombud is empowered to address a wide range of disputes arising in communal living schemes. On this understanding, the claimant (and holder of a life right in a retirement scheme) challenged the developer of the scheme (as owner of the land) before the Ombud. He argued that the benefit of a rebate granted by the municipality to owners of retirement schemes, which the relevant policy stated had to be “passed on” to holders of life rights, meant that he had the right to claim the rebate amount from the developer if the levies were not adjusted to reflect the rebate. The Act however limits which orders an adjudicator may grant in respect of financial issues, and the Court concluded that in granting an order in favour of the claimant, the adjudicator acted beyond the powers granted in the legislation. The judgment highlights how important it is to understand the extent of the powers and functions of the Ombud’s office and its adjudicators, before referring a dispute to that office.
THE HOUSE IS MINE, SAYS THE DIVORCE ORDER. NOT SO, ARGUES EX-SPOUSE’S CREDITOR: WHEN IS THE SPOUSE’S TITLE UNASSAILABLE?
Fischer v Ubomi Ushishi Trading and Others (1085/2017)  ZASCA 154 (19 November 2018)
An interesting conundrum arose in this matter. X and Y’s marriage in community of property was dissolved pursuant to divorce proceedings. The settlement agreement that was made an order of court provided that Y would acquire X’s half share in the property. Subsequently a creditor of X obtained judgment against X and sought an order allowing execution against X’s half share, as the deeds office records still reflected X and Y as joint owners. Could Y’s objection that she became owner of X’s half share when the divorce order was handed down succeed?
NO FLATS IF ACCESS ROAD LESS THAN 9M WIDE: DO NEARBY LANDOWNERS HAVE STANDING TO ENFORCE SUCH GENERAL PROVISIONS?
Tavakoli and Another v Bantry Hills (Pty) Ltd (1251/2017)  ZASCA 159 (28 November 2018)
Litigation following on building plan approval often involves interpretation of municipal planning laws that bind the general public in the relevant municipality’s jurisdiction, or certain groups within the municipality’s jurisdiction. The distinction can become a crucial issue. This judgment is a case in point and dealt with a provision forming part of City of Cape Town’s general Planning By-Law which precludes the construction of apartment blocks in some instances where access roads are less than 9m wide. Did the claimants, as owners of properties 80m away, have the necessary standing to dispute compliance with the provision?
INCOME TAX QUESTIONS WHEN DEVELOPER SELLS PROPERTY IN ONE TAX YEAR AND REGISTERS TRANSFER IN THE NEXT
Milnerton Estates Limited v Commissioner for the South African Revenue Service (1159/2017)  ZASCA 155 (20 November 2018)
From an income tax point of view, where a developer sold erven in a new development in terms of agreements concluded in one tax year (and during which the suspensive conditions were fulfilled), but transfer registering only in the next tax year, in which year did the purchase price accrue to the developer? The Court here confirmed that in the circumstances of this matter, it would be deemed to be in the year that the sale agreements were concluded.
CONSEQUENCES OF FRAUDULENT NON-DISCLOSURE IN A SALE AGREEMENT
Rossouw v Hanekom (741/2017)  ZASCA 134 (28 September 2018)
This matter deals with an instance where a seller had fraudulently failed to disclose a defective roof and sewerage system and that he had not obtained municipal approval for alterations to the home. The purchaser was successful in a delictual claim for damages, based on the seller’s fraudulent misrepresentation and fraudulent non-disclosure, the fraudulent actions trumping the voetstoots clause in the sale agreement.
LENDERS: IF IT IS A “CREDIT TRANSACTION”, REGISTER OR THE LOAN IS VOID
Du Bruyn NO and Others v Karsten (929/2017)  ZASCA 143 (28 September 2018)
For some time now there has been confusion whether it is necessary for a lender, in a once-off loan, to register with the National Credit Regulator where the loan reached a certain threshold. The Supreme Court of Appeal confirmed now that although it would be reasonable and sensible to interpret the National Credit Act as being inapplicable to once-off transactions where the role players are not participants in the credit market, the current wording did not support this. The Court suggested that the legislature should address this aspect.
STBB’s STSMA REFERENCE GUIDE
In this, the sixtieth set of notes for your STSMA Reference Guide, Prescribed Conduct Rule 8 is discussed.
Prescribed Conduct Rule 8
(N.B. Print in landscape)