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Tuesday, 27 September 2011 14:10

The Companies and Intellectual Property Commission (CIPC), previously known as CIPRO, have recently confirmed that more than one million companies and close corporations have lately been either deregistered or are in the process of deregistration due to their failure to submit their annual returns.

The legal consequences of deregistration are severe: companies and close corporations lose their status as legal entities, their assets pass to the State and agreements concluded with them may be negatively affected. For example, should such an entity be the owner of immovable property, it would not be possible for it to sell or pass transfer of this property. 

 The good news is that the new Companies Act (section 82(4) read with Schedule 3, Part 8) provides that application can be made to reinstate the registration of both a company and close corporation if it was deregistered as a result of non-filing of annual returns.  Such a reinstatement will have the effect of reviving the company or close corporation’s rights and obligations.

However, when such an entity is the owner of immovable property, additional requirements are laid down: the written consent of both the Departments of Treasury and Public Works are to be obtained prior to lodging the application.
Since the process of transfer of any property owned or purchased by such entities are effectively stayed until such entity is reregistered, significant delays are to be expected when a deregistered entity is involved.

You would therefore be well advised to verify the status of your Company or Close Corporation with CIPC, as well as that of any entity you intend to transact with prior to entering into a contract for the sale of immovable property.

Published in Property
Wednesday, 05 October 2011 14:05

Did you know that the insolvency of one spouse, even in a marriage out of community of property, can affect the status of the solvent spouse? In terms of Section 21(1) of the Insolvency Act the estate of the solvent spouse will also (initially) fall under the control of the Curator.

The deeds office will register an interdict against the personal details of the solvent spouse to the effect that the Curator will first have to confirm that the solvent spouse is free to deal with his or her own estate. This can be problematic where the solvent spouse wants to sell property or purchase property in cash.

Published in Property
Monday, 10 October 2011 14:02

When dealing with a sales transaction subject to VAT, it is important to obtain insight into the Seller’s VAT compliance background - the reason being that SARS is on a war path to put a stop to attempts by taxpayers to avoid paying VAT and/or transfer duty and personal tax. SARS has implemented measures to check a Seller’s compliance records to determine whether the Seller is guilty of not paying timeously, having outstanding payments or even not filing returns timeously. If any of the mentioned circumstances exist, SARS may require the Seller to take certain steps before issuing the transfer duty exemption, such as:

  • Resolve outstanding obligations; or
  • Provide security for VAT payments of current transaction; or
  • Instruct the transferring attorney to undertake to pay VAT directly to SARS from the proceeds of the sale within 5 days of registration.
Published in Property
Monday, 26 September 2011 07:58

Did you know that in terms of the Sectional Titles Act, where a real right to extend a scheme has been reserved in favour of a developer, such right must be disclosed to the purchaser in the agreement of sale?

Where that real right has not been disclosed in the agreement of sale it is voidable at the instance of the purchaser.

Published in Property
Tuesday, 20 September 2011 13:55

In a Sectional Title Scheme, a unanimous resolution can be passed without convening a meeting. Any such proposal must be sent to all the individual owners calling for all members of the Body Corporate to agree in writing to the suggested proposal. Should all the owners consent in writing, a valid unanimous resolution has been taken.

Published in Property
Thursday, 15 September 2011 13:53

If you have acquired your ex-spouse`s share of a previously jointly owned property after your divorce, be that by Court order or private agreement, you need to submit a written application to the Registrar to endorse on the Title Deed that you alone are entitled to deal with the property.

Once the Title Deed has been endorsed in this way, you will be entitled to deal with the property as if you had taken formal transfer or cession into your name of your former spouse`s share of the property.

Published in News
Monday, 12 September 2011 13:47

If you are considering donating a property to a beneficiary, it may be good advice to heed the saying: ‘Nothing is certain but death and taxes.’ The reason is that a donation of immovable property triggers both transfer duty and donations tax!

Transfer duty will be taxed in the hands of the recipient of the donation, and donations tax at 20% of the value of the donation will be levied against the donor. There is a small rebate in that the first R100 000 of property donated each year by a natural person is exempt from donations tax.

Published in Property
Sunday, 04 September 2011 13:43

Many Title Deeds contain restrictive conditions or personal servitudes (such as usufructs or pre-emptive rights) which have already lapsed. The Deeds Office insists that such lapsed conditions be removed from the Title Deed when the property is dealt with in any way, even when you register a further bond over the property.

Be aware of this added requirement and ask your conveyancer to check your Title Deed for any of these conditions to avoid hold-ups when your transaction is lodged in the Deeds Office.

Published in Property
Thursday, 01 September 2011 13:37

In a more recent case it was held that the absence of any statutory approval for buildings constitutes a latent defect.  The voetstoots clause ordinarily covers a latent defect, meaning that a seller would be protected by the voetstoots clause for unapproved building plans.

It is important for buyers to take note that the smallest failure on their part to properly inspect the property and to ask the correct questions might cost them dearly in the future.

The buyer can only avoid the abovementioned consequence of the voetstoots clause if they can prove that the seller:

  • knew of the latent defect;
  • omitted to disclose and deliberately concealed such fact; and
  • had the intention to defraud (the buyer).

It is thus of the utmost importance for all sellers to properly disclose all known defects, whether latent or patent, to the buyer and/or agent.

Published in Property
Friday, 26 August 2011 13:27

The deeds office notes a caveat against a property as a reminder to itself and interested parties that some other action is required when next the property is dealt with in any way.For example, sometimes a property is re-surveyed and the property details may change as a result. The Surveyor General will then note a caveat against the property so that when next the property is dealt with, the amended details are noted in the title deed and deeds office database.Should the Title Deed thereafter be found, it must immediately be handed to the Registrar of Deeds.

Published in Property
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