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

 

What is racism in the workplace?

 

In the news currently is the matter of a teacher that was suspended for posting pictures of children in her class, apparently segregated by race.

Another relevant case has just been decided by our Constitutional Court, where a man was dismissed for referring to a co-employee as a “swart man” – “Black man”.

How do you as an employer or employee regulate this in the workplace? Many refer to co-workers by race – is this racist and derogatory?  It is a real challenge and in this political climate a recipe for disaster.

Think of Adam Catzavelos who posted a “personal” video on the beach and what happened to him and his business. He was fired from a family business and the business has, to our knowledge, not recovered.  The ramifications are huge, especially with social media when things can go viral.

The case of Adam Catzavelos is very clear. His conduct was despicable.  But what of the teacher who posted the pictures – was her suspension valid?  The employee who was dismissed, was his dismissed fairly?

The Constitutional Court held that the CONTEXT of the words or action are what is important in determining whether conduct is racist or defamatory or derogatory.   Was the context intended to be or apparently racist?  Did it belittle the “victim” thereof?  Our history of segregation and apartheid is of great relevance in this.  Ordinary words or actions can be determined to be racist, based on the context and the heightened tensions around racism in South Africa.

The employee who referred to his co-employee as a “swart man” (black man) did so in anger – he allegedly burst into a meeting demanding that the black man’s vehicle be removed from his parking immediately or there would be consequences.

For employers, if such an incident occurs in your workplace, you need to carefully consider our current society tensions and test the context of the incident.

For employees and the general public, be aware of Government efforts to curb racism and hate speech and think carefully. Do not act in anger and measure your words.

If you are an employer – contact us to assist you to put the necessary policies and procedures in place for these situations. We can also assist in sensitising your staff to the actions which could be considered discriminatory or racist.

 

Contact : Charmaine Schwenn

Charmaine@schwenninc.co.za

031-003 0630 / 083 789 7638

PARENTING COORDINATORS – WHO ARE THEY AND WHAT ARE THEIR POWERS?

 

The term Parental Coordination is a form of alternative dispute resolution that is used in high conflict divorce and custody matters that must be headed by either a mental health professional or a family law professional. This type of alternative dispute resolution is usually used either pre or post divorce proceedings.

The appointment of a Parenting Coordinator is done by either:

  1. A court order;
  2. A parenting plan ; or
  3. By way of a settlement agreement between the parties.

The order or agreement will list the powers and authority of the coordinator and this order is thereafter binding on all parties.

It is paramount to remember that the High Court is the upper guardian of children and therefore can make any decision if it is in the best interests of the child or children.

Although a parental coordinator is a ground breaking integral part of the court system there are however limitaions to keep in mind.

The first limitation is that a coordinator cannot be appointed unless there is some sort of agreement in place that provides for a framework that will assist the parties in how to comply with same.

If an order is not complied with then just as any other breach of a court order, an enforcement of the order can be to comit the person to prison for their contempt.

The second limitation is that the orders need to be in the best interests of the children which must include basic frameworks for things such as:

  1. Care and contact of the child;
  2. Guardianship; and
  3. The termination, extension and supervision of parental responsibilities .

Therefore it is important to remember that the coordinator is a facilitator that makes sure that all the provisions of the order are complied with. They do not create the provisions as this would be considered going against the judicial oversight and tresspasses on the courts exclusive jurisdiction which is entrenched in section 173 of the Consitution. This can be seen as the Third limitation.

The fourth and last limitation is that:

  1. The coordinator can only be involved where there is chronic conflict or unwillingness bewteen the parents to come to an agreement;
  2. Mediation between the parties must have been attempted and must have been unsuccessful or was inappropriate- this is usually in cases of domestic violence where restraining orders are involved; and
  3. The coordinator must be a qualified person whose fees are reasonable and fair.

The Courts therefore favour this approach because of the inherent jurisdiction that is enrenched in the Constitution.

It can therefore be said that we should get used to the increasing appointments of parental coordinators.

For any assistance in a divorce and mediation do not hesitate to call us on 031 003 0630 or 083 789 7638 or email us at charmaine@schwenninc.co.za.

WHAT IS FICA and WHY WE NEED IT?

 

FICA stands for The Financial Intelligence Centre Act, which came into effect on 1 July 2003.

 

FICA was introduced to fight financial crime, such as money laundering, tax evasion, and terrorist financing activities. FICA brings South Africa in line with similar legislation in other countries.

 

FICA is essentially a means to ensure that an institution is required to ”get to know the client”. Financial institutions, like banks or other organizations such as attorneys firms or estate agencies do this by keeping proper records of their clients, requesting particulars and keeping a proper record of where the funds are coming from and where they are going.

 

It is therefore a legal requirement for financial institutions to FICA their clients in order to prevent financial crimes. The Act, places an obligation on the banks/attorneys firms to FICA their clients and it is a criminal offence for them not to do so.

 

The failure to FICA clients can lead to a prision sentence (ranging from 5 to 15 years) and or a fine (ranging from R 1 000 000 to R 10 000 000) depending on the offence, hence the

 

Some offences that are punishable under the Act, include, but not limited to;

 

  • Failure to identify persons involved in a contractual obligation
  • Destroying or tampering with records
  • Failure to advice Centre of a suspicious client/person
  • Failure to report cash transactions
  • Failure to report suspicious or unusual transactionsWe have therefore drafted a list of requirements that should be given or requested to your friendly attorney firm (that would be us) or other institution.For individual:
  1. Copy of client’s ID book;
  2. Utility bill – no older than 3 months and showing clearly the clients’ physical address;
  3. SARS document where clients’ SARS registration number is clearly visible.

 

For Companies and CC’s

 

  1. the registered address of the close corporation or company;
  2. the name under which the close corporation or company conducts business;
  3. the address from which the close corporation or company operates, or if it operates from multiple addresses –
    • the address of the office seeking to establish a business relationship; and
    • the address of its head office;
    • the full names, date of birth and identity number or nationality (as may be applicable), concerning –
    • the manager of the company; and
    • each natural person who purports to be authorised to establish a business relationship or to enter into a transaction with the accountable institution on behalf of the company; and
    • the full names, date of birth, identity or registration number, nationality, address and / or legal form, as may be applicable, concerning the natural or legal person, partnership or trust holding 25%  or more of the voting rights in the company.

 

Documents required for companies

  1. identity document; or if a person cannot produce an identity document, another document bearing a photograph of the person and their names, date of birth and identity number;
  2. a document issued by the South African Revenue Services bearing the person’s name and the relevant number;
  3. a utility bill (no older than 3 months) or copy thereof;
  4. Certificate of Incorporation (form CM1) and Notice of Registered Office and Postal Address (form CM22) – Companies.

Documents required for Closed Corporations

  1. identity document; or if a person cannot produce an identity document, another document bearing a photograph of the person and their names, date of birth and identity number;
  2. a document issued by the South African Revenue Services bearing the person’s name and the relevant number;
  3. a utility bill (no older than 3 months) or copy thereof;
  4. Founding Statement and Certificate of Incorporation (form CK1) and Amended Founding Statement (form CK2) if applicable – Close Corporations.

For Partnerships:

  1. the name of the partnership,
  2. the names, date of birth, identity or registration number, nationality, addresses and / or legal form, as may be applicable, concerning, every partner, including every member of a partnership the person who exercises executive control over the partnership;
  3. each natural person who purports to be authorised to establish a business relationship or to enter into a transaction with the accountable institution on behalf of the partnership.

Documents required for Partnerships

  1. identity document for all partners; or if a person cannot produce an identity document, another document bearing a photograph of the person and their names, date of birth and identity number;
  2. a document issued by the South African Revenue Services bearing the person’s name and the relevant number;
  3. a utility bill (no older than 3 months) or copy thereof;
  4. Partnership agreement.

For all your contract/property needs, contact our offices on 031 003 0630 or charmaine@schwenninc.co.za

Divorce in dictionary

 

When is the right time to get a divorce?

 

As attorneys we often get asked by our clients when the right time is to get a divorce? It’s a difficult question to answer.  We strongly recommend that you get the support and advice to make this decision from a trusted personal advisor, spiritual advisor, family member or friend.

We can help with the “legal” side of the decision – explaining the process to you, explaining the proprietary consequences of the divorce, as well as issues surrounding children and other financial consequences.

What we can say for sure, is that the process is always a “difficult” one, which inevitably gets worse before it gets better. For this reason, you need to ensure that you are resolved, and certain that you wish to take this decision.  We will do all we can to ensure the smooth running of your matter and also that we assist with the constructive resolution of the matter.  We try not “break things” more than they are already broken.   This is not to say that we shy away from a fight, if there is one to be had – on the contrary, we will advise you which fights are worth the fight and we will make sure that your interests are protected in this respect.  However, we believe that our jobs as attorneys are to help you keep the end goal in mind – and to help you get there as quickly and painlessly as possible.

If this is how you wish your matter to be handled and you are sure that you want a divorce, give us a call.

 

Charmaine Schwenn

charmaine@schwenninc.co.za

031-003 0630

GOOD NEWS FOR SINGLE PARENTS:

It was common practice that both parents of children had to submit their income and expenditure to the schools which their children attend.

This was most predominantly used when parents were applying for any exemptions for their children’s school fees.

This was the practice even if the parents were divorced or separated. This posed a lot of stress on the primary care giver of the child when paying for all the child/children’s educational needs in spite of their poor financial disposition.

The stress caused on the parents and children involved has and still is an epidemic that is widely felt especially by single headed households. It has especially become evident that these unneccesary and aviodable stresses filter down to these children.

It has been agreed that something needed to be done in order to give children their inherent right to education as enshrined in the Constitution and The Childrens Act, irrespective of their upbringing and the circumstances.

New law on school fee exemptions:

A new court ruling has ajudicated on this point in an effort to relieve the stress on the single headed households that are looking for the best education for their children.

As aforementioned, it was the status quo for both parents to submit their income and expenditure so that the exemption could be appropriately calculated, which was often at times very embarrassing for all parties envolved as parents would have to show that they were “too poor” to pay the required school fee prices.

The school governing bodies will now be given new and improved criteria in which to follow when they are deciding on which parents should be given such exemptions. This is to give regard to the childs right to good education instead of punishing the child due to the parents inability to pay their fees.

The law previously stated that both parents of a child, whether married or not were jointly and severally liable for their childs school fees. The Supreme Court of Appeal however has ruled that single parents applying for exemptions will be assessed on based on their own individual financial means.

How can one apply and what is the process of obtaining an exemption?:

The parent(s) would be required to contact the school and fill out the necessary paper work. This would include having  to agree to sumbit to a credit check which will confirm  employment details.

The court ruled that parents will not need to disclose their entire financial position to the schools when applying. This saves parents from feelingembarassed when making the application to the school. .

The School’s Governing Body and the principal of the school will then review the application and then decide whether or not to grant an exemption.

 

It is of importance to note that although South Africa is making great strides to protect the rights of children, it also sympathizes with parents taking into account the current prevailing economic times, the scarcity of jobs and unemployment as well as the ever increasing burden of single parent households.

For any advice and or assistance on school fee affairs, maintenance and other children related issues feel free to contact us on 031 003 0630 or charmaine@schwenninc.co.za.

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Family Handprint

 

 

How do I calculate maintenance for my child?

 

Every parent is responsible for the maintenance needs of their children. These needs are however, the REASONABLE needs of the child.

One calculates the child’s share to the common household as one part per child and two parts per adult.

To put it in simple terms we use the following formula:

 

 

Parents gross income                                                                              Childs Needs

______________________                           X                                __________________

Total gross income of both parents                                                                   1

 

= the parents contribution toward maintenance.

 

One parent can apply to the Maintenance Court for a change in the order once there is a change in income of either of the parents.

This process is free and highly recommended, especially after a costly divorce where one parent wants to vary the court order made due to change of circumstance.

The Maintenance Court is a faster and cheaper option as opposed to the costly and lengthy wait for a High Court order variation. It also has jurisdiction in the following areas:

 

  1. Setting aside an existing maintenance order;
  2. Make a new maintenance order;
  3. Decreasing a current order;
  4. Amending a current order, or
  5. Changing an existing order.

It is to be noted that Grandparents and other family members can, as a substitute, also be ordered to pay maintenance for the child if one of the parents cannot.

The reasonable needs of the child are calculated by looking at:

  1. The child’s previous lifestyle;
  2. The child’s parents income;
  3. The child’s parents financial abilities to pay maintenance; and
  4. The child’s health and specific educational needs.

It therefore goes without saying that every child’s needs have to be decided upon on a case by case basis.

If you need any assistance or legal advice contact us at Charmaine@schwenninc.co.za or call us on 0310030630.