How to avoid … The 10 Deadly Sins that Estate Agents Make

How to avoid …

The 10 Deadly Sins that Estate Agents Make

Estate Agency Affairs Board Continuing Professional Development

Presented by Tiaan (M C) van der BergEstate Agency Affairs Board

Copyright: M.C. van der Berg Attorneys, Conveyancers & Notaries INC. ©

1. Death (contract is void)

2. Contract can die (voidable)

3. Civil claim

4. Embarassment

5. Bad name in market

6. Cut commission

7. Complaint at EAAB

8. Frustration

9. Waste of time

are personal in nature;

are inherited in your pro forma agreements;

are organized by the parties to the agreement;

are habitual;

exist because you don’t apply your mind;

is the result of the agent doing theconveyancer’s work;

By acquiring the necessary knowledge;

Using a proper pro-forma agreements of sale;

Applying your mind;

Using a conveyancer that you can rely on;

SIN 1:

Understanding the various Matrimonial Property Systems

1) The Marriages Act;

2) The Civil Union Act;

3) The Recognition of Customary MarriagesAct;

4) Muslim / Hindu Marriages;

5) Another Country’s laws (regardless whichone);

1) Matrimonial Property Act

Marriage Act

Civil Union Act

Muslim marriages (under certain conditions)

2) Recognition of Customary Marriages Act

3) Muslim (in certain cases)/ Hindu Marriages

4) Another Country’s laws

• Peter John Smith

• Id 720101 5186 086

• Susan Johnson

• Id 710203 0816 081

1 Estate

• Fredrich Smal

• Id 820203 5160 082

• Susan Smal

• Id 811112 0123 085

Civil Marriage

Property dispensations are regulated bythe Matrimonial Property Act i.e.

In community of property – ByDefault

Out of community or property - ANC

5) Another Country’s laws (regardlesswhich one);

Same sex couples;

Civil Marriages;

Property dispensations are regulated bythe Matrimonial Property Act i.e.

In community of property – ByDefault;

Out of community or property – ANC;

3) The Recognition of Customary Marriages Act;

Partners married i.to. customary law(labola);

Legal position previously – uncertain;

Now regulated by Recognition ofCustomary Marriages Act;

Promulgated on 15 November 2000;

Act incorporates the matrimonialproperty dispensations of theMatrimonial Property Act;

If: Muslim Marriage concluded before 1 May 2014

No Civil marriage Not regarded as married Can contract independently

If: Muslim Marriage concluded after 1 May 2014 (but not a civil marriage)

Not regarded as married Spouses can contract independently

If: Muslim Marriage concluded after 1 May 2014 (and is a civil marriage)

Recognized by Marriage Act

Regulated by Matrimonial Property Act

• Default = In community of property

• ANC = Out of Community of property

Still regarded as not married;

Parties can contract independently;

3) The Recognition of CustomaryMarriages Act;

We don’t know if spouses are in/out ofcommunity;

Regulate legal position to protect spouses;

Who must sign?

Differentiate between

NB! Consent, not necessary a party to agreement per se!

SIN 2:

Representation

Juristic person/ Legal entities

Quasi juristic

person

Natural Person (human beings)

Companies

Closed Corporations

Other- church, club etc.

But 1 problem!

Is duly authorized

If signatory is indeed duly authorized

Agent can’t assume that

Director (Company)

Member (CC)

Employee

Official

∴ Obtain a resolution &

Hold representative contractually liable!

Companies

Company

JJJ (Pty) Ltd

1999/01235/07

Directors- Johannes Koopman- John Buyer- Julius Thenga

= Resolution appoints

Regulated by the Companies Act 71 of 2008

Snapshot Pty Ltd

Registration number 1999/01235/07

Herein represented by Johannes Koopmanduly authorized thereto.

Purchaser One

Name: ABC (Pty) LtdReg. No: 1999/012345/07 herein represented by theundersigned and duly authorized thereto being AlbertKoopman

Purchaser Two

Name: ___________________________________________________________________Id / Reg No: ______________________ herein represented by the undersigned and duly authorized thereto being

Indeed authorized

Duly authorized

Internal compliance

External compliance

Trust Property Control Act

Companies Act

Close Corporations Act

Trust deed

Cooperation Agreement

Constitution

Company: Closed Corporations

a) Before signature of agreement;

b) After signature of agreement(ratification);

a) Only before signature ofagreement’

If resolution is signed aftersignature of contract – contractis void (Adriaanse vs Investec)

SIN 3:

Uncertain aboutTransfer Duty and/or VAT

Always Transfer Duty Act or VAT Act

Transfer Duty Act vs. VAT Act

Never both: Transfer Duty Act and VAT Act

Do you pay VAT on Coke at Spar ?

Are you registered for VAT?

Is Spar registered for VAT?

SIN 4:

Misunderstanding the sources of funds

Deposit

Bank loan

Investment

Subject to transaction

SIN 5:

Not addressing Fittings & Fixtures correctly

Differentiate

Fixtures vs Fittings

Fixtures

Part of property

Sell with property

Seller cannot take with

Fittings

Not part of Property

Seller can take with

FIXTURES FITTINGS

• Garage door motor • Mirror

• Kreepy Krauly • Curtains

• Remotes • Furniture

• Lights • Pot plants

• Bathroom towel rails

• Swimming pool

• Trellis doors

WHAT ABOUT ?

• DSTV - dish • Pelmets

• TV - antenna • Mirrors

• Blinds • Microwave oven

How do we distinguish between Fittingsand Fixtures?

No hard and fast rule;

Guidance by courts;

Intention of person who attached it?

Way of attachment?

Damage if removed?

Does item form a unit with theproperty?

SIN 6:

Suspensive Conditions

Typically two types:

Bond and / or (Sin 6.1)

Subject-to Transaction (Sin 6.2)

When will the suspensive conditions be fulfilled?

When all the suspensive conditions

are met……

In Full &

In time

Copyright: M.C. van der Berg Attorneys, Conveyancers & Notaries INC. ©EAAB 2016 - 10 Deadly Sins

SIN 6.2:

Subject-to Transaction

Copyright: M.C. van der Berg Attorneys, Conveyancers & Notaries INC. ©EAAB 2016 - 10 Deadly Sins

SIN 7:

Lease Agreement“Huur gaat voor koop”

When concluding a sale agreement,determine if the property is currentlyunder a lease agreement;

Obtain a copy of the lease agreement;

Establish the following:

Valid lease agreement?

Period of lease?

Notice period?

Termination date?

Letting agent involved?

Deal with position of tenant;

“Huur gaat voor koop”

Roman-Dutch law

Incorporated in the South African Law

If lease is signed before sale agreement

Purchaser must honour leaseagreement

only applies to lease agreementsshorter than 10 years

Landlord

Tenant

Landlord

Tenant

Purchaser

Landlord

Tenant

Purchaser

Must honour lease

agreement

Seller 1

Initial

The seller confirms that the property is notleased to a tenant on date of signature of thisagreement *.

The seller confirms that the property is leasedto a tenant on date of signature of thisagreement and the situation is accordinglyregulated by Annexure G.

Seller 2

Initial

*Delete which is not applicable. Seller initial.

TENANT OCCUPYING THE PROPERTY

The Seller undertakes not to enter into any leaseagreements for the duration of this sale agreementwithout the prior written consent of the purchaser

High Risk for Purchaser;

“Huur gaat voor koop”;

3 options:

1) Lease agreement is ceded topurchaser;

2) Delay transfer till termination oflease;

3) Expedite termination of lease;

SIN 8:

Disregarding the seriousness of Occupation

These issues must be conditions beforeoccupation!

The occupational rent paid (+ provisionsfor utilities);

Deposits paid – guarantees delivered;

Costs are paid (transfer & bond);

Transfer and bond documentation signed;

Documents that need to be provided(FICA etc.);

The transfer duty receipt is received fromSARS;

SIN 9:

Misinterpreting the ambit of theConsumer Protection Act

Promote and advance the social andeconomic welfare of consumers;

Promoting fair business practices;

Protecting consumers;

Improving consumer awareness andinformation and encouragingresponsible and informed consumerchoice and behaviour;

Promoting consumer confidence andempowerment;

…… etc;

CPA is a blanket Act!

Applicable to all transactions!

While it is limited in its ambit

only applicable to “Transactions”;

Consumer ;

someone who enters

into a transaction

with a supplier

Supplier ;

someone who delivers

a product /service

in the normal course of business

To a consumer

Aim of CPA is to:

Regulate relationship between

suppliers consumers

i.e. Makro / Joe Soap

Aim of CPA is not to:

Regulate relationship between

non-suppliers non-consumers

i.e. Joe Soap / Suzy Snail

SIN 10:

Barking on behalf of the conveyancer

What is your responsibility

The Conveyancers responsibility

Validity of agreement

Addendums

Legal Advice

Disputes

Bond Conditions & Approval

Subject-to Transaction

Occupation

Tenants

COC’s

Gas Certificate

Electric Fence Certificate

Gas Certificate

Electric Compliance

Invasive Vegetation

Beetle Certificate

THANK YOU

How to avoid … The 10 Deadly Sins that Estate Agents Make

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