July-newsletter-01

EDITOR’S LETTER


Dear Reader

Before you consider purchasing or selling a property, read our article “First time home buyer?” to be prepared for and aware of the legal costs involved to avoid delving into your kids’ trust fund.

However, if you have already purchased the property and was planning on building your wife’s dream house, but realised the intended deck with the perfect view over the lake is no longer possible due to an uneven surface, it’s not over yet – the CPA is here to save the day! Read our article “When Acquiring a Piece of Terra Firma Turns into an Ordeal”, to find out more.

Maybe your wife is already enjoying her afternoon tea on the deck of her dream house. However, you have a different type of problem. The Man vs Tree problem. Your driveway is bumpy and paved by protruding roots of your neighbour’s mighty oak and your swimming pool is constantly covered with leaves. Read our article: “Good trees, bad neighbours” to find out how man conquers tree in the battle of Man vs Tree.

Enjoy the read!
JJR Inc. Team

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WHEN ACQUIRING A PIECE OF TERRA FIRMA TURNS INTO AN ORDEAL.


– Alicea van der Ryst

Visualise yourself the following scenario:

Mister “A” and Miss “B” (hereafter the ‘buyers’) contracted with X COUNTRY ESTATE PROPRIETARY LIMITED (hereafter the ‘seller’) in order to purchase and obtain Erf 1143 Imaginary Land Extension 2. The purchase price of the said Erf was R1 500 000.00. The aim of the buyers to buy the Erf was to enable them to immediately build their dream house on the Erf. This aim was duly communicated to the seller who vowed that the land was perfect for the buyers’ needs. After concluding the contract of sale the buyers started to make arrangements to build said house on the Erf just to find out that the inclination of the land was too steep to immediately commence with their building arrangements and the buyers will incur further costs to remedy the inclination.

This must ultimately be any buyer’s worst nightmare. Not only are you stuck with land you cannot immediately utilise, but your budget has sporadically escalated without prior notice.

Two questions arise:

1. Will the Consumer Protection Act, No 68 of 2008 (hereafter ‘CPA’) apply to the facts of the matter?

2. Did the buyers waive their implied warranty by discharging the seller from any liability in the contract of sale?

Answer to question 1

The selling of the land was during the course and furtherance of X COUNTRY ESTATE PROPRIETARY LIMITED’s business, which therefore makes X COUNTRY ESTATE PROPRIETARY LIMITED a supplier.1

A supplier may not in terms of the CPA2 mislead a consumer to believe material facts about goods (land) which is not true.3 The intention and aim of the buyers were clear from the very start, namely that the main reason for buying their Erf was to immediately build a home. This intention and aim was duly communicated to the seller.4 Therefore, the seller (supplier) did not fulfil his/her obligation towards the buyers (consumers).5

The seller may approach the buyers with an opportunistic ploy, but no matter what the seller alleges it is clear from the CPA that the buyers (consumers) had a reasonable expectation that the stand was suitable to build a home on. This will result in the consequence that the implied warranty contained in Section 56 of the CPA will immediately come into effect to aid the buyers (consumers).6

Answer to question 2

Usually the caveat subscriptor rule applies to contracts, which means you are bound by the contract that you have signed.

In terms of the CPA on the other hand, Section 49(1) clearly states that notice has to be given to a consumer if his/her rights are being restricted or if the supplier is being indemnified for any cause. This notice requirement was of paramount importance in the buyers’ case due to them making it clear they wanted to build a home.

Therefore, the buyers did not waiver their implied warranty.

The crux of the matter?

When you buy a piece of land to build your dream home on do not fear when the CPA is near. Once the seller promotes the land to you as a paradise to build your property on and reality turns grim, it will be regarded as spurious and will you, as a consumer, have remedies to rectify the hoodwink sold to you.

1 A ‘supplier’ in terms of the CPA is defined as a person who markets any goods or services. ‘Market’ furthermore means to promote or supply any goods or services. The question therefore is what constitutes ‘goods’ and will land form part of said ‘goods’? The CPA define ‘goods’ in much detail and amongst other things a legal interest in land or any other immovable property falls within the ambit of said definition. Real estate development or property development is a multifaceted business process, encompassing a variety of activities including the purchase of raw land and the sale of developed land or parcels to others.

2 Section 41(1)(a) of the CPA 68 of 2008 defines misleading as directly or indirectly express or imply a false, misleading or deceptive representation concerning a material fact to a consumer.

3 In terms of Section 41(3)(c)(i) and (ii) will it be regarded as misleading or deceptive representation to falsely state or imply, or fail to correct an apparent misapprehension on the part of the consumer to the effect, that any land or immovable property has characteristics that it does not have or may lawfully be used, or is capable of being used, for a purpose that is in fact unlawful or impracticable.

4 In terms of Section 55(3) if a consumer specifically informs the supplier of the particular purpose for which the consumer wishes to acquire any goods, or the use to which the consumer intends to apply those goods, and the supplier ordinarily offers to supply such goods, or acts in a manner consistent with being knowledgeable about the use of those goods, the consumer has a right to expect that the goods are reasonably suitable for the specific purpose that the consumer has indicated.

5 Section 55(2)(a) goes further and determines that every consumer has a right to receive goods that are reasonably suitable for the purposes for which they are generally intended.

6 Section 56(1) and (2) determines that in any transaction or agreement pertaining to the supply of goods to a consumer there is an implied provision that the producer or importer, the distributor and the retailer each warrant that the goods comply with the requirements and standards contemplated in Section 55, except to the extent that those goods have been altered contrary to the instructions, or after leaving the control, of the producer or importer, a distributor or the retailer, as the case may be. The remedy available to the consumer is that within six months after the delivery of any goods to a consumer, the consumer may return the goods to the supplier, without penalty and at the supplier’s risk and expense, if the goods fail to satisfy the requirements and standards contemplated in Section 55, the supplier must, at the direction of the consumer, either repair or replace the failed, unsafe or defective goods, or refund to the consumer the price paid by the consumer, for the goods.

FIRST TIME HOME BUYER?


– Nadia Burger

“Before anything else, preparation is the key to success.” ~Alexander Graham Bell

You have taken the first big step; you have decided to buy your very first home. Like everything else in life, proper financial planning and preparation will ensure no unexpected financial surprises. In practice, we often find buyers surprised when handing them statement of accounts for attorney fees payable.

It is important to take note that, when buying a property, there are attorney fees involved. Attorney fees are split into two categories. The buyer is firstly responsible for payment of transfer fees to the transferring attorney. This fee is payable to the attorney to ensure that the transfer of the property is registered in the buyers name.

Most people are dependent on financial institutions to grant them a home loan to purchase a property. This is where the second category of attorney fees becomes applicable. The Bank will instruct a bond registration attorney to register a bond against the property in their favour, as the Bank is lending money to the buyer. The buyer will then be responsible for the bond attorney fee for the registration of a bond over the property.

The bank only grants the purchase price of the property and will not include your bond registration or transfer fee in your available bond amount. The transfer fee is calculated on the purchase price of the property and the bond registration fee is calculated on the amount that you are borrowing from the bank.

For example, should the Purchase Price of a property be R600 000.00 (Six Hundred Thousand Rand), the transfer fee will be calculated on R600 000.00. But, you have saved a small deposit and you have already saved up for transfer and bond registration fees. You therefore, only need to borrow R550 000.00 (Five Hundred and Fifty Thousand Rand) from the bank to buy your dream home. Your bond registration fee will therefore only be calculated on R550 000.00 (Five Hundred and Fifty Thousand Rand) and not on the purchase price of R600 000.00 (Six Hundred Thousand Rand).

*Tip: When going out to view properties, ask your estate agent for a sheet with transfer and bond registration fees. It is calculated on sliding scales.

Click here to see our Cost Sheet.

GOOD TREES, BAD NEIGHBOURS


– Helena van der Nest

It is a landowner’s right (and is a normal incident of landownership) to build and plant trees on his / her property. However, encroaching trees can cause a lot of disputes between neighbours, especially in the following instances:

• leaves falling in the other`s swimming pool or blocking gutters and obstructing sewage systems;

• branches overhanging the other`s fence or dropping fruit into the other`s yard ;

• branches blocking the other`s sunlight (from solar panels or TV reception);

• roots causing damage to the other`s property.

Your right as an owner of land may also be restricted by your neighbour’s rights, which may arise from the following:

Limited real rights and personal rights, which may be created by statutory provisions or by conditions in the original deed of grant of land. Limited real rights may be created by provisions of a will or as a result of a contract of sale, reserving a servitude over the land to the seller. Personal rights allow the holder to exercise some of the normal incidents of landownership (for example building or planting trees) or prohibiting the other landowner from exercising some of the normal incidents of ownership and thereby limiting such ownership;

The rules of neighbour law, which impose common law limitations on landowners such as instances of encroachment, drainage of surface waters, nuisance, and others.

The law of delict. For instance if a landowner has neglected to take reasonable precautions to ensure the safety of others, he / she may be liable for damages to a person injured as a result of the negligence.

How to proceed when your neighbour is ignoring your rights:

• In the case of encroachment by trees, you may request the neighbour to prune their trees. If your neighbour refuses you are entitled to remove the overhanging branches;

• If the trees or root systems are causing damage to your wall / property or there is a risk of it doing that, you may apply for an interdict to compel him / her to remove the trees;

• You may also claim for the damages caused to your property by the encroaching trees or tree root systems;

• If the trees are causing a nuisance you can also apply for an interdict.

One must however keep in mind, that although one may apply for an interdict, it does not necessarily guarantee success. For instance, In the case of Vogel v Crewe and Another1, the Applicant applied for an interdict for the removal of his neighbour’s trees as it was constituting a nuisance because it blocked the gutters and sewage systems and caused problems by shedding leaves in his pool and on surrounding areas. He also argued that the trees and root systems were causing damage to the wall which was constructed by both of them together to separate the two properties.

The court held that the test which must be applied when deciding whether a set of circumstances constitutes a nuisance, is an objective test based on reasonableness, even if the nuisance involves the actual inflicting of damages. The court found that the benefits of conserving the trees had to be weighed against the nuisance caused to the applicant.

The court considered the following facts:

1. The trees were not planted directly against the wall, but were approximately two metres away from the wall;
2. When the wall was erected subsequent to the planting of the trees, it was built within the borderline of the respondents’ property thereby affecting the perceived proximity of the trees;
3. Trees form an essential part of our human environment, not only in terms of giving us aesthetic pleasure but also functionally in the provision of shade and oxygen.

The court ruled that the damages to the wall was not severe and that the parties should rather repair the wall than remove the trees. With regards to the overhanging branches, the court held that the applicant may request the respondents to prune their trees. If the respondents refuse to do so, he is entitled to cut off the overhanging branches, in line with the boundary. There was further not sufficient evidence to show that all the problems complained of had been caused by the overhanging branches. The application was refused with costs.

It is therefore always better to first try and resolve matters amicably with your neighbour. However, if you have a difficult neighbour you always have your Attorney to fight for your rights.

1Vogel v Crewe and Another (2004) 1 ALL SA 587 (T).

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This newsletter is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

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