This is a question that each director of either a small, medium or large firm must take into account when considering competition in the market. Negligence has left a lot of firms in a position that leads to them breaking down, but for a firm to successfully compete in a market one must take the following into account.

 ESTABLISHING DOMINANCE

A definition of a dominant firm appears in section 7 of the Competition Act. The inquiry into whether an entity is a dominant firm includes an identification of the relevant market in which the firm is involved, it’s market share within that market and whether it possesses the relevant market under section 7 depends upon the market share enjoyed by the firm alleged to be dominant.

WHEN IS A FIRM DOMINANT?

Section 7 of the Competition Act states that a firm is dominant in a market if:

  • It has at least 45% of that market
  • It has at least 35%but less than 45% of that market
  • If it has lee than 35% of that market but it has market power

The statutory test for dominance requires an assessment of market share and market power. A firm with a market share of 45% or more cannot escape being conspired dominant per se, however, for those firms with a market share of less than 45%, market share is only one aspect that needs to be considered.

If the firm has a market share of less than 45% but equal to or more than 35%, the onus is on the firm to show that it does not have market power.

If a firm cannot produce evidence to show that it does not enjoy market power, then the firm is dominant.

Likewise, a firm with less than 35% of a market share may be dominant if it has market power. However, in this case, the onus is the complainant in the case or where relevant, the Competition Commission, to show that the firm has market power.

TEST FOR DOMINANCE

A firm can only be determined once the market in which the firm competes is correctly defined. Accordingly, the definition of the relevant market is an important initial step in establishing whether a firm qualifies as dominant. It is quite possible for a big conglomerate firm that participates in various diverse industries not to be dominant in any relevant market.

So, the main question to ask is when does a firm have market power? The Competition Act defines market power as the ability to:

  • Control prices
  • Exclude competition
  • Behave to an appreciable extent independently of competitors, customers, and suppliers.

Market power provides the firm with the ability to set prices above the competitive price level, and in so doing earn a greater profit than it would have under competitive conditions in the market.  

WHAT DOES THE DOMINANCE PROVISION PROHIBIT?

In terms of section 8 of the Act, it is prohibited for a firm to:

1. Charge an excessive price to the detriment of consumers;

2. Refuse to give access to competitors access to an essential facility when it is economically feasible to do so;

3.Engage in an exclusionary act, other than that listed below if the anti-competitive effect outweighs its technological efficiency or whether pro-competitive gain;

4. Engage in any of the following exclusionary acts, unless the firm concerned can show technological efficiency or other pro-competitive gains which outweigh the anticompetitive effect of its act;

  • Requiring or inducing a supplier or customer not to deal with a competitor. This transpired in the case of Comair Ltd v SAA 2008 where SAA induced airline agents to not deal with Nationwide Airlines and Comair who were complainants in selling the tickets but only sell SAA tickets to customers in return for an incentive promised by SAA.
  • Refusing to supply scarce goods to a competitor when supplying those would be economically feasible.
  • Selling goods or services on conditions that the buyer purchases separate goods or services unrelated to the object of a contract or forcing a buyer to accept a condition unrelated to the object of a contract or forcing a buyer to accept a condition unrelated to the object of the contact.
  • Selling good and services below their marginal or average variable cost.
  • Buying up a scarce supply of intermediate goods or resources required by a competitor.

Before one engages in the market it is advisable to look out for such conduct, apply the Act where applicable.

We can help with this!  We have extensive experience with the Competition Commission, having appeared before the commission on behalf of clients and dealt with Competition matters, up to and including, challenging fines, opposing applications brought by the Competition Commission, representing clients before the Competition Tribunal, among others.

Contact: Charmaine Schwenn

                Charmaine@schwenninc.co.za

031 -0030360

WRITTEN BY: PORTIA SAMKELISIWE DLAMINI

13/05/2019


STEP 1 – Sign an offer to purchase a house from the Seller using an Estate Agent (if applicable);

STEP 2 – Bond Application done for the Loan :
Bond application forms part of the “suspensive condition” (conditions that need to happen before the sale). Another common suspensive condition is the sale of an existing document;

STEP 3 – Estate Agent will send Agreement to us for registration of transfer.
The Sale Agreement is a binding contract that forms the basis of the transaction;

STEP 4 – We will contact the parties for FICA documents, deposit from Purchaser (if applicable), request Deed and Discharge from cancellation bank, search at Deeds Office for restrictive conditions, etc. If the Seller has a bond over the property, his/her bank will hold the title deed in safekeeping;

STEP 5 – Bond attorneys will be instructed once the bond is approved, they will send through their letter with all requirements, a mortgage bond is a special loan which uses the fixed property as a security registered in the Deeds Office;

STEP 6 – Cancellation attorneys will be instructed by the seller’s bond bank, the cancellation attorney will send through the Title Deed and guarantee requirements to us;

STEP 7 – We will apply for rates clearance certificate (takes up to 3 / 4 weeks). A property cannot be transferred if there are outstanding rates;

STEP 8 – Start preparing documents for signature – this takes about a day;

STEP 9 – Contact parties to sign transfer documents such as Power of Attorney, Affidavits, etc. Original FICA to be brought in for verification purposes;

STEP 10 – Proforma account to be paid by purchaser, SARS Transfer Duty application to be done (takes up to 10 days), pro-rata rates/levies homeowner’s fees, etc called for payment. Proforma account is an estimate as to the rates and/or levies will only be known once the figures are received, there could be many additional costs incurred depending on the transaction;

STEP 11 – Once all is in order with Homeowner’s, Rates, Levies, SARS, the matter can be prepped for lodgement;

STEP 12 – Send documents to Stowell & Company for lodgement, always ensure that simultaneous transaction is all done on the same day (bond/cancellation). The lodging attorney is located opposite the Deeds Office and acts on our behalf;

STEP 13 – Matters are lodged together (transfer, bond & cancellation), this takes up to 5-6 days in lodgement stage;

STEP 14 – Examiners at Deeds Office examine each document sent;

STEP 15 – Matter comes “up for prep” or “fees”, we will prep final account in file. This is good news, meaning all the documents were correct and will be registered the next day;

STEP 16 – Matter registered, Seller paid, Estate agent paid, etc. The purchaser becomes the new owner;

STEP 17 – Title Deed sent back to us, send a copy to the client, to send original to bond bank attorneys. The title deed can take up to 2 months to return from Deeds Office.

Are you looking to buy or sell your property?? Contact us today and we will help you!

#schwenninc #newblog #conveyancing #law #attorneys #theconveyancingprocess #callustoday #letushelpyou

Nobody likes to think about the fact that they will one day die. It is a horrible visual but what about those who are left behind? This article will discuss the duties of the executor and how they help those through that process.


During your life you acquire assets for example houses, cars, shares, etc. and you also acquire liabilities such as loans, debts, etc. These assets and liabilities form part of your estate, and when you die this estate needs to be administered, divided and distributed. These processes are all done by one person in control of the estate known as the executor.


The executor’s first step would be to meet the family and gather as much information and missing documents that they don’t have and reconcile the deceased’s will in which the executor in Testate Succession will be nominated.


The second step is that the estate must be reported to the Master of the High Court’s office in which the deceased lived. http://www.justice.gov.za/master/contacts.htm.


The executor must then place a notice to the creditors informing them of the deceased’s death. This notice will be placed in the Government Gazette and the local newspaper in the area the deceased had lived. This gives creditors the opportunity to institute claims within 30 days after the notice was published.


The executor will then close all of the current bank accounts open at the time of the deceased’s death. He/she will then open up a separate account strictly used for the administration of the estate.


The drafting of accounts must be done and advertised in the same manner as the notice to creditors which is then lodged for approval at the Master of the High Court where the death was reported.


After the accounts have been approved by the master, the executor will pay all the creditors and distribute what’s left of the estate to the beneficiaries accordingly.


The Master of the High Court can help the family of the deceased on the process, however, it is usually advisable that a qualified attorney and/or deceased estate paralegal helps the family. One can approach Pro Bono.org where they will be helped for free.


It is not advisable that a family member is left as the executor of an estate of their loved one. This is burdensome especially if it is not your area of expertise. Contact us and we will help you today. Call us on 031 003 0630 or email us at Charmaine@schwenninc.co.za.

#schwenninc #attorneys #law #deceasedestates #dutiesoftheexecutor #newblog

1. It is important to think about the initial costs, do you have enough earnings to qualify for a bond on a property in the first place? Are you able to pay all the necessary transfer costs such as transfer duty, attorney/conveyancer fess?

2. Then consider ownership – firstly be how you intend to register the property, are you doing so in your name or in the name of a trust or company? Consult an attorney and accountant on this point.

3. What will the monthly costs be to you from date of registration? Think of costs such as levies, rates and taxes, and your bond instalment. Also factor in insurance and maintenance costs. You should have a contingency account for amounts not covered by your insurance for maintenance and upkeep of the property.

4. A big risk is periods when you have no tenants and are not earning an income, or if you have a tenant that is not paying rental, are you prepared to pay costs while looking for a suitable tenant or ejecting a non-paying tenant?

5. How much rent can you charge? Rental needs to be based on a) The type of property b) The location e.g. is it close to shopping centres? How many people will be living on the property? You will also need to plan ahead for the annual increase of rental which usually ranges between a 5-10% increase per year. This amount needs to be carefully considered and calculated so that it strikes an important balance between profit for you as a land owner as well as fairness and affordability for tenants.

6. You will need a strong rental agreement that protects your rights as a land owner, this should include breach clauses which will give you remedies in the event that the tenant breaches his responsibilities, this should also include the fact that they agree to pay legal costs in the event that a matter ends up in the legal process.

7. Tenant vetting- what you look for in a tenant : • Reliability – this would be especially useful when it comes to payments being made every month, • Conduct and demeanour – this would be one of the top priorities, not only does the tenant’s conduct depict how they will act toward you but it is important to see how they handle stressful and or difficult conversations especially when things go wrong and there is a breakdown in communication. • Responsibility – as a property owner, you want a tenant who will look after your property the best that they can as if it was their own, who will maintain it and keep it neat and tidy • Reference checks are essential, especially from previous landlords.

When seeking a tenant the most important thing is for you as an owner to feel comfortable!

If you have any queries and or advice on buying a rental property and renting out your property don’t hesitate to contact us today on 031 003 0630 or email us on Charmaine@schwenninc.co.za.

This article aims to discuss the necessity of open communication between yourself and your attorney especially when seeking and setting up a payment holiday plan.

Many people will at some point in their lives find themselves being involved in legal disputes. It goes without saying that litigating on a matter can take quite a while, especially if the matter is opposed.

In saying that, an attorney can become costly. The more time an attorney spends on your matter, the higher your legal bill.

Your financial situation can be either a short term or a long term problem. If it is a short term problem the restructuring of payments owing is much easier to do as opposed to a long term problem. It is however, important for you to maintain an open line of communication between yourself and your attorney. An attorney will only then institute legal action against you if you have not honored your commitments and/or if you haven’t advised them fully about your financial circumstances.

Your attorney may ask that you sign a contract for a certain period that limits your liability to pay them, this is known as a payment holiday. This is not to say that you are fully extinguished from ever paying your attorney again, but it is a contract that will stipulate the terms and conditions that will determine:

  1. When the amounts are due;
  2. What amounts are outstanding;
  3. If there is any discount available e.g. the use of a collections tariff as opposed to an attorney’s full hourly rate; and
  4. What interest, if any, will the debtor be liable for?

It is pertinent to note that a payment holiday plan will be based on the merits of a case, usually only used for a long term client and after a full financial assessment has been undertaken.

Be careful not to get a payment holiday plan confused with Pro Bono work. Most pro-bono work is work referred to attorneys by Pro Bono.Org in order to provide free legal assistance to those who cannot afford to pay for an attorney.  http://www.probono.org.za/.

In conclusion, to set up a payment holiday plan with your attorney you must apply your mind to the following:

  1. Be an existing client;
  2. You must notify your attorney immediately of any financial change;
  3. Share your financial history with your attorney;
  4. Negotiate a contract and decide which terms and conditions suit both parties;
  5. Honor your payments ( when the “holiday” is over); and
  6. Always keep the lines of communication with your attorney open.

For any legal assistance or advice kindly contact us on 031 003 0630 or email us on Charmaine@schwenninc.co.za.

Written by Jessica Schwenn.

#schwenninc #yougotschwenned #blogs #paymentholiday

  Residential properties : Securing your security deposit Section 5 of the Rental Housing Act (RHA) allows a landlord to take a deposit from a tenant before the tenant moves into the property. This amount must be stipulated in the lease agreement and is generally an amount that is equal to 1 month rental. The […]

Residential properties : Securing your security deposit

Section 5 of the Rental Housing Act (RHA) allows a landlord to take a deposit from a tenant before the tenant moves into the property. This amount must be stipulated in the lease agreement and is generally an amount that is equal to 1 month rental.

The RHA, requires that the landlord deposits the money into an interest bearing account, with a financial institution. A tenant has the right to receive a statement of interest earned. The tenant is therefore entitled to receive their deposit and all interest earned during the lease period at completion of the lease.  The tenant will have to provide FICA information for the landlord to invest the deposit amount.

As further protection, a tenant should ensure the landlord or managing agent is registered with the Estate Agency Affairs Board.

A landlord is entitled to deduct any expenses incurred from repairing any damage which may have occurred during the term of the lease from the deposit and interest.  This is normally provided for in the written lease agreement.

The tenant has the right to see all repair receipts to ensure the expenses are for genuine repairs that have been undertaken by the landlord. This does NOT include costs for general maintenance of the property which is for the landlord’s expense.

The Importance of a walkthrough inspection

A tenant should always do a pre lease inspection, noting any defects or faults prior to moving in and this should be reduced to writing and sent to the landlord or his agent as soon as possible, or within the time stipulated in the lease. A good idea would be to take photos as this would substantiate any claims of faults and will supplement any “snag lists’.

Some landlords often agree to fix faults at a later stage and this should be viewed with some suspicion as often the faults are not fixed and the landlords then blame the tenants for any damage. A tenant is not responsible for wear and tear and should not be forced to repaint the walls (unless the tenant has caused excessive wear and tear).

Exit inspection

A tenant must always insist on having an exit inspection and this should be done when the lease comes to an end. The tenant should ensure that the original snag list is presented and any additional evidence (photographic or otherwise) as well as any additional faults that have occurred during the lease period. A tenant who is intent on getting their full deposit and interest should view this inspection with a critical eye (by ensuring the property is cleaned, the walls washed and any holes patched up).

Rental Housing Act, Amendments

This Act sets out the following criteria for both the landlord and tenant:

  • Setting out the rights and obligations of the parties in a coherent manner;
  • Requiring the lease to be in writing;
  • The contents of a lease must include the following;
    • Names and addresses of all the parties to the agreement;
    • A description of the property;
    • The amount of the rental;
    • Reasonable escalation;
    • Frequency of payment;
    • The amount of the deposit;
    • The lease period and the notice period.

Failure to repay the security deposit and interest, for no legitimate reason, by the landlord is a criminal offence in terms of Section S 16 (aB) (RHA) and is punishable with a penalty or imprisonment not exceeding two years or both.

To ensure your lease agreement is complaint with all the necessary rights and obligations of both the landlord and tenant, contact us on 031 – 003 0630 or charmaine@schwenninc.co.za. #rentals #durbanlawyer #schwennlegacy #leaseagreements #newblogpost

Article written by – Barry Todd

 

CREDITORS, DON’T DISREGARD BUSINESS RESCUE SO SOON AS A WAY TO RETRIEVE YOUR MONIES.

It can be said that there has been an increase in business rescue processes in South Africa.

“Business rescue, as defined by the Companies Act 2008, aims to facilitate the rehabilitation of a company that is financially distressed by providing for the temporary supervision of the company and management of its affairs, business, and property by a business rescue practitioner”.
https://m.fin24.com/Entrepreneurs/Resources/Business-rescue-explained-20150119.

One of the main purposes of business rescue is to ensure that creditors be paid out what is owed to them – albeit less than the full amount of their claim.

Although many get disheartened by the decrease in the payback of the capital amount, the proceedings are almost identical but less extreme to that of liquidation proceedings.

“Liquidation is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent meaning it cannot pay its obligations when they come due”.
https://www.investopedia.com/terms/l/liquidation.asp.

From a glance of the Companies Act, it suggests that although a business rescue plan may discharge a portion of the debt owed to concurrent creditors, it would be the same amount that one would get during the liquidation proceedings in any event. Therefore either way although you may retrieve less than the capital amount they theoretically do the same/similar jobs at the end of the day.

Section (1)(b)(iii) of the Companies Act states that a business rescue plan contemplates an outcome that would indeed be a better result for shareholders than it would have been during immediate liquidation.

However, just like many areas of law in South Africa, there has not been a real consensus by the courts whether the above can be stated as true.

In Oakdene Square Properties v Farm Bothasfontein, the Supreme Court of Appeal decided that it was not intended for the Act to promote an informal type of proceedings as a way of avoiding the consequences of liquidation.

If you are a creditor or a business owner looking for advice on business rescue and/or your options on the best returns possible for your money contact our offices on 031 003 0630 or email Charmaine@schwenninc.co.za.

 

Written by: Jessica Schwenn.

Our latest blog explains what should, both the buyer and seller take into account before buying or selling a property. Our blog explains various terms in a contract of sale and who is responsible for the various costs involved, these include agents commission and legal fees.

WHAT REQUIREMENTS SHOULD A PURCHASER TAKE INTO CONSIDERATION BEFORE BUYING A PROPERTY?

  1. The buyer must contact their bank to find out whether or not they qualify for a home loan and if so, what amount they quality for.
  2. The buyer should make sure that they can afford the monthly loan repayments and other costs like, rates and taxes, water and electricity, insurance premiums etc. The buyer should also ensure that if the interest rate is increased they are able to afford those increases.
  3. The buyer must find out about any once off costs, for example, legal costs, transfer duty or value added tax, loan administration, initiation and registration fees. Please click here to see the current tariff fees- https://www.schwenninc.co.za
  4. The buyer should also consider their future needs, for example, whether the property that they intend to buy is close to their work or to shopping centers, schools and hospitals as this could determine the future selling price or value of one of their biggest asset purchases.
  5. The buyer should examine the property they intend to buy thoroughly for any defects or potential defects, for example, cracks in the walls, damage to the roof, faulty plumbing and so on. The defects may be taken into consideration when negotiating the purchase price of the property. Our advice would be to consider the use of  company that would be able to assess the property and advise of any potential defects.
  6. The buyer should request from the person selling the property (seller) to provide them with the following documents: copies of the title deed and diagram; any existing lease agreements; approved building plans; any other relevant information (such as zoning, town planning or municipal requirements).These documents can be used or taken into consideration when negotiating the purchase price of the property.
  7. After examining the property and perusing the documentation, the buyer should decide whether or not they are interested in buying the property. If the buyer is interested in buying the sellers property, they will need to make an offer to the seller or through the appointed estate agent.
  8. When the terms and conditions of an offer to purchase are being negotiated, the buyer will be asked for the date that they intend to move into the property. If no date is set, the seller has the right to remain in the property until the property has been registered into the buyers name and the seller has received the agreed purchase price.
  9. After the buyer and seller have reached an agreement on the terms and conditions  of the sale, the offer to purchase must be reduced to writing in terms of the Alienation of Land Act and signed by both the buyer and seller.
  10. Any change to the sale agreement must be done in writing and signed by both the buyer and the seller. This is by way of an addendum.

WHAT REQUIREMENTS SHOULD A SELLER TAKE INTO ACCOUNT BEFORE LISTING OR SELLING THEIR PROPERTY?

 

  1. A seller can sell their property privately or through a registered estate agent.
  2. The seller may appoint one or more registered estate agents to list their property. The estate agent must be registered by the Estate Agency Affairs Board and hold a fidelity fund certificate.
  3. The estate agent and the seller will enter into a agreement which is called a mandate, in terms of which the estate agent will be entitled to receive a commission for selling the sellers property. The estate agent must explain the terms and conditions of the mandate to the seller.
  4. When the sellers property is on show, the property should be kept neat and clean so that it is attractive to potential buyers on the day of the showing.
  5. Estate agencies have their own standard sale agreements that can be used for the purpose of buying or selling of a property.
  6. If the seller decides to sell their private property, they should rather approach an attorney or US to draw up a sale agreement.
  7. The seller is obligated to inform the buyer of all defects or potential defects relating to the property, even if they are selling the property voetstoots.
  8. Upon receipt of the buyers written offer to purchase the property, the seller must read through the offer carefully, cross-out anything that they don’t agree with, cross-out any open spaces on the offer where they have crossed-out or added something and return the offer back to the buyer for their consideration.
  9. If there was nothing to be crossed-out or added, the seller may accept or reject the buyers offer.

 

WHAT TERMS AND CONDITIONS MUST APPEAR IN A SALE AGREEMENT?

  1. The terms and conditions that the seller and the buyer MUST agree on are: a) Identity of the seller and the buyer: by including their full names, identity numbers, addresses and marital statuses. b)description of the property being sold by the seller: by including the deeds offices description, size, and/or street address of the property being sold. c)Purchase price of the property payable by the buyer: by including how the property is going to be paid by the buyer, for example, in obtaining a loan, and whether or not a deposit is payable. If a deposit is payable, the  must be held in an interest bearing trust account by the conveyancers purchase price is R250 000.00 or less a cooling off period of five working days will apply.
  2. The term that the seller and the buyer MAY also agree on are for example: a) The details of the conveyance, usually the seller has the right to choose, b) Who will be responsible for which costs relating to eg cancellation costs, c) the date of  the buyer will take, d) voetstoots meaning it  is sold “as is”,  Which estate agents will be involved in sale and who pays the commission, f)the seller must provide the buyer with electrical compliance certificates and gas certificates, g) are any suspensive conditions buyer will have to get a loan in a certain period of time, h)what remedies there are if one party was to conditions.

For any information regarding the buying or selling of a property kindly contact us on 031 003 0630 or email Charmaine@schwenninc.co.za.

WRITTEN BY : BARRY TODD