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Understanding Delays in the Property Transfer Process in South Africa

Buying or selling a property is usually an exciting journey. However, it’s essential to acknowledge that this process is not without its challenges. In this article, we delve deep into the common reasons for delays in property transfers, shedding light on potential hurdles that may dampen the excitement of moving into your new property.

Common Reasons for Delays

Delays Caused by Incomplete or Inaccurate Deeds of Sale

One of the initial steps in any property transaction is the signing of the Deed of Sale. This document sets the tone for the entire process. Delays can ensue if it is incomplete or inaccurately completed, a responsibility that can fall on the buyer, seller, or real estate agent. This document is pivotal for the subsequent bond application process, and any issues must be resolved before moving forward.

Validity of the Deed of Sale

Ensuring that the Deed of Sale is valid and binding between parties is crucial. If not, a new valid contract must be established, further elongating the process.

Delays Due to Failure to Provide Personal Information or FICA Documents

Another stumbling block can be the failure to provide necessary personal information or FICA (Financial Intelligence Centre Act) documents promptly. Failure to do so can hinder the transaction’s progress, making cooperation from both parties vital.

Delays Related to Signing Bond and Transfer Documents

Timely signing of relevant bond and transfer documents is crucial. Any delays in this regard can have a cascading effect on the entire process, causing further setbacks.

Issues with Original Title Deed

The seller’s provision of the original title deed of the property is essential. However, if this document is lost or damaged, obtaining a duplicate from the Deeds Office can be a time-consuming process, sometimes taking up to three weeks.

Cash Shortfall

A smooth property transfer often hinges on cash flow. Delays can be triggered if buyers are unprepared for additional costs beyond the purchase price. Similarly, sellers may face cash flow issues if the selling price doesn’t cover an outstanding bond.

Transfer Duty Receipt and Bond Cancellation

A Transfer Duty receipt is a prerequisite for conveyancers to initiate the registration process. The buyer must pay the transfer costs to obtain this receipt. On the other hand, sellers must provide at least 90 days’ notice to cancel their existing bond, resulting in a potential three-month delay if this notice is not given.

Role of the Transferring Attorney

The transferring attorney plays a central role in coordinating various aspects of the transaction. This includes notifying mortgagees and initiating the bond cancellation process, which can be delayed due to notice periods.

Obtaining Certificates and Consents

Obtaining certificates, receipts, and consents can be time-consuming. These include rates clearance certificates, transfer duty receipts, and homeowners’ association consent, among others.

Delays Due to Property Inspections

Property inspections by professionals, such as plumbers or electricians, may uncover the need for significant repairs or improvements before certificates are issued, causing delays.

Delays in Deceased Estate Transactions

In transactions involving deceased estates, obtaining the consent of the Master of the High Court is a prerequisite. Delays may occur if certain requirements are not met.

Simultaneous Lodgement at the Deeds Office

To expedite the process, all attorneys involved must simultaneously lodge documents at the Deeds Office. This step requires approval from the mortgagee and consents for bond cancellation.

Deeds Office Time Frames

Time frames at the Deeds Office can vary, and they may also change during the course of a transaction. To stay informed, it’s advisable to consult your conveyancer for up-to-date information.

Understanding the intricacies and potential delays in the property transfer process is essential for a smoother experience. While delays are sometimes inevitable, careful planning, cooperation, and seeking professional guidance from a property law attorney can help navigate these hurdles effectively.

Safeguarding Inherited Assets in the Face of Insolvency

In today’s world, the spectre of insolvency looms over many individuals, especially after the blow that Covid-19 has brought down on South Africans. As such, it’s increasingly important to consider how your hard-earned assets will be protected in the event that your heirs face financial turmoil. 

What if one of your heirs, the intended recipient of your generosity, finds themselves declared insolvent or bankrupt? Can you protect the inheritance you intended for them from being claimed by their creditors?

The Role of Insolvency Clauses

The answer lies in the inclusion of insolvency clauses in your Will. These clauses play a pivotal role in determining the fate of inherited assets when an heir faces financial distress. But it’s important to note that drafting an effective insolvency clause isn’t straightforward; it requires careful consideration and precision.

What the Law Says

In South Africa, the law governing this matter is clear. As stated in “Mars: The Law of Insolvency in South Africa” (Ninth Edition, page 188), a testator cannot prevent an inheritance from forming part of the insolvent estate of their heir by merely stipulating that the bequest remains unenforceable during the period of sequestration.

To safeguard the inheritance effectively, the testator must create a “gift over” provision in their Will. For instance, the Will can specify that if the heir is declared an unrehabilitated insolvent at the time of the testator’s death, the bequest must be redirected to another person. 

Alternatively, the testator may grant the executors of the estate the discretion to divert the inheritance to a different beneficiary. In such cases, the insolvent heir will have no claim to the inheritance.

The Power of Repudiation

If a testator has not made provision for an heir’s insolvency in their Will, the heir’s only recourse to protect the inheritance is to repudiate it before it vests in their estate. However, this action may have unintended consequences, as it can result in the heir or residue heirs receiving specific assets or money that the testator did not necessarily intend for them to inherit.

The Importance of Inclusion

To ensure that your wishes and intentions are upheld during the administration of your estate, it is of paramount importance to include an insolvency clause in your Will. By doing so, you can proactively protect your assets and inheritance from the reach of creditors in case one of your beneficiaries faces financial hardship.

In conclusion, while insolvency can cast a shadow over even the best-laid estate plans, it’s crucial to remember that you have the power to protect your assets and ensure your intentions are respected. By including a carefully crafted insolvency clause in your Will, you can provide a safety net for your heirs and beneficiaries, shielding their inheritances from the clutches of financial adversity.

Understanding the Legal Aspects of Selling a Home with Defects in South Africa

Buying a new home is an exciting journey, but it can quickly become a nightmare if you discover hidden defects in your property. In South Africa, there are specific legal provisions that govern the sale of homes with defects. In today’s article, we will delve into what the law says about selling a house with defects in South Africa.

Types of Defects

In South African law, defects in a property are categorised into two main types: patent defects and latent defects.

Patent Defects: These are defects that are visible or apparent upon reasonable inspection of the property. Examples include cracks in the walls, leaking roofs, broken windows, or faulty plumbing. Sellers are not required to disclose patent defects, as they should be easily identified by buyers during the inspection process. However, sellers cannot deliberately conceal these defects or misrepresent the property’s condition. If a buyer can prove deliberate concealment, legal action may be taken.

Latent Defects: Latent defects are not visible or apparent upon inspection and can include hidden structural damage, plumbing or electrical issues, or termite damage. Sellers are not obligated to disclose latent defects, but if they are aware of any, they must inform the buyer before finalising the sale. Failure to do so can result in legal consequences.

Protection for Buyers

Buyers are not left entirely unprotected. The Consumer Protection Act (CPA) plays a crucial role in safeguarding their interests. The CPA requires sellers to disclose all known defects in the property, including latent defects. If a seller fails to do so, the buyer has the right to cancel the sale within six months of taking possession of the property.

In cases where a buyer discovers a latent defect after the sale has been finalised and can prove that the seller knew about it and deliberately concealed it, legal recourse against the seller is possible. However, proving deliberate concealment can be challenging, underscoring the importance of obtaining a professional inspection report before purchasing a property.

Seller’s Responsibilities

Sellers must disclose all known defects in the property to the buyer before finalising the sale. Failure to do so can lead to legal action and damage the seller’s reputation. It’s essential for sellers to act in good faith and honesty during the property transaction process.

The “Voetstoots” Clause

The term “voetstoots” refers to a clause that is standard in property transactions in South Africa. It essentially means that when you buy a property, you are accepting it “as is.” While this clause provides some protection for sellers, it does not shield those who deliberately conceal defects. In situations where defects are concealed, the voetstoots clause may not be enforceable.

Taking Action

If you find yourself in a situation where you’ve bought a home with defects, it’s crucial to take the right steps promptly:

1. Check the Defects List: Review your contract for any attached defects list. Conduct a thorough inspection of the property and make a list of undisclosed defects.

2. Obtain an Independent Inspection Report: Hire an independent home inspector to provide a detailed report on the property’s condition.

3. Discuss the Issues: Talk to the seller about the defects and what they intend to do. Seek legal advice before agreeing to any repairs.

4. Consult Legal Advisors: If necessary, consult with your legal advisor to understand your rights and options, whether it involves repairs, contract cancellation, or withholding costs.

In summary, South African law provides a framework for dealing with defects in property transactions. While the Voetstoots clause offers some protection to sellers, it does not shield those who intentionally hide defects. Buyers are protected by the Consumer Protection Act, which requires sellers to disclose known defects. To navigate this complex terrain, it’s advisable to seek legal advice and conduct thorough inspections to ensure a smooth property transaction.

What does it mean if the death certificate says “unnatural causes” – specific to reporting the estate

If the death certificate says “unnatural causes”, it means that the person died due to something other than natural causes. This has several implications for reporting the estate of the deceased, especially if the death occurred in South Africa.

One of the most important implications is that the death must be reported to the South African Police Service (SAPS) within 72 hours. The SAPS will then investigate the circumstances and manner of death and collect any evidence from the scene. The SAPS will also arrange for the removal of the body to a state mortuary for a post-mortem examination. A post-mortem examination is “a scientific and objective procedure that involves the systematic examination of the body tissues and organs by a pathologist”. The purpose of the post-mortem examination is to determine the exact cause of death and to provide a medical report that can be used for legal or administrative purposes. The post-mortem examination is required by South African law for all unnatural deaths and cannot be refused by the next of kin. The post-mortem examination may also reveal information that is relevant for reporting and administering the estate of the deceased, such as:

  • The identity of the deceased, if unknown or disputed
  • The date and time of death, if uncertain or disputed
  • The nature and extent of any injuries or diseases that affected the deceased
  • The presence of any substances or toxins in the body that may have contributed to or caused the death
  • The existence of any genetic or hereditary conditions that may affect the heirs or beneficiaries of the deceased

When a person dies, the cause of death is recorded on a death certificate by a medical practitioner or a traditional leader. The cause of death can be classified as natural or unnatural. Natural causes are those that result from disease or old age, while unnatural causes are those that result from external factors such as accidents, violence, poisoning, or suicide, and could also include any of the following:

  • Road traffic collisions involving cars, motorcycles, bicycles, pedestrians, or animals
  • Falls from heights, stairs, ladders, roofs, or windows
  • Drowning in pools, rivers, dams, or oceans
  • Fires or explosions in homes, workplaces, or public places
  • Electrocution by faulty wiring, appliances, or lightning
  • Poisoning by drugs, alcohol, chemicals, or plants
  • Animal attacks by dogs, snakes, bees, or wild animals
  • Natural disasters such as floods, earthquakes, landslides, or storms

If you do not specify that the death certificate says “unnatural causes” when reporting the estate to the Master of the High Court, you may encounter some problems or delays in finalising the estate. For example:

  • You may not have access to the medical report from the post-mortem examination, which may contain vital information for administering the estate
  • You may not be able to obtain a letter of executorship or authority from the Master until the SAPS has completed its investigation and issued a clearance certificate
  • You may not be able to claim any benefits or compensation from insurance policies, pension funds, or other sources that depend on the cause of death
  • You may face legal challenges or disputes from creditors, beneficiaries, or other parties who have an interest in the estate

To avoid these problems or delays, an unnatural death should be reported as soon as possible and all the relevant documents and information must be provided to the Master of the High Court without avail. You should also consult with a professional legal service that specialises in estate administration and planning, such as AED Attorneys.

How can AED Attorneys help you?

Reporting an unnatural death estate can be a complex and stressful process. If you are a new owner of a property that belonged to someone who died due to unnatural causes, you may face some challenges in reporting and administering their estate. You may also encounter some emotional distress and trauma as a result of their death.

AED Attorneys can help you with:

  • Reporting an unnatural death estate to the Master of the High Court and the SAPS
  • Obtaining a letter of executorship or authority from the Master
  • Claiming any benefits or compensation from insurance policies, pension funds, or other sources
  • Dealing with any legal challenges or disputes from creditors, beneficiaries, or other parties
  • Finalising and distributing the estate in accordance with the law and the wishes of the deceased

An unnatural death can complicate your inheritance or ownership of a property. AED Attorneys understands these implications, tax and financial consequences and other considerations. We have experience of the emotional and psychological impact, and offer the legal support that is essential in the event of an unnatural death estate.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

What Are The Benefits Of Leaving Assets To A Trust Fund?

When a person passes away, all their assets are placed into an estate administered by an Executor. These assets can include both moveable and immoveable property. Immoveable property relates to assets such as residential and commercial property. Moveable assets can be money in the bank, cars, furniture, jewellery, etc. The Executor will finalise all the administration needed to process the estate, pay the relevant taxes and Estate Duty and distribute the remaining assets to the beneficiaries.

What Is Estate Duty?

Estate Duty is a tax levied on the assets of a South African resident or on South African assets of a non-resident if the estate is valued above R3,500,00. Section 4 of the Estate Duty Act, 1995 specifies the various deductions that are allowed to determine the net value of the estate.

What Deductions Are Allowed Under The Estate Duty Act?

A tax exemption of R3.5 million is allowed on the entire estate before Estate Duties are calculated. Estate Duty is then payable on the remaining value of the estate at a rate of 20% on the first R30 million and 25% on the balance of the value over R30 million. If the estate’s value is under R3.5 million, SARS must still be notified of the deceased’s death.

What Happens to Assets Accrued After A Person’s Death?

Any income accrued up until the date of a person’s death is taxable. After their death, the Deceased Estate is formed. Any assets are held here until the liquidation and distribution have been finalised as per Section 35(12) of the Administration of Estates Act. Income that accrues after the date of death but before any assets being distributed to the beneficiaries is dealt with slightly differently under Section 25 of the Income Tax Act.

When Must Estate Duty Be Paid?

Estate Duty must be paid within 12 months of the date of death or 30 days from the assessment date – if the assessment has been issued within 12 months of the date of death. Late payments currently attract an interest of 6% per annum.

Who Is Liable To Pay Estate Duty?

As the estate administrator, the Executor is usually liable to pay the relevant Estate Duties. However, in some cases, estate duties may be payable by the beneficiary. This is particularly relevant when a policy is paid out to a beneficiary.

Who Can Establish A Trust Fund?

All South African citizens over the age of 18 may establish a trust. However, they need to be fully aware of its impacts and potential challenges. Many people feel that trusts are only for the wealthy, but there are still a number of benefits from property owners placing their immovable assets into a trust for their family:

  • As part of a trust, the property is not subject to inheritance tax as it no longer makes up part of the deceased’s estate.
  • A trust does not require an Executor, who may charge up to 3.5% of the estate’s value for their services.
  • A trust will provide for remaining dependants and minors.
  • The trustees administer the trust’s assets until the minor dependants come of age, or according to the trust deed’s specifications on the termination of the trust.

However, trusts are not without complications, and serious consideration of high tax rates, trustees and several other issues will have to be considered and thoroughly discussed with an attorney before setting up one. When a property is transferred into a trust, it is important to be aware of the fact that this property is now out of the owner’s control. Here are some thoughts to consider:

  • Many issues surrounding the setting up of a trust occur when the relationship between the founder of the trust and the trustee/s disintegrates. This can happen in the case of a relationship breakdown, so it is crucial to choose the trustee/s very carefully.
  • There are costs involved when initially setting up a trust.
  • If the beneficiaries need to use the trust to secure finance, it is worth noting that banks rate trusts as a higher risk than an individual.
  • Any future changes to legislation involving trusts are always possible and may limit the benefits they currently provide.
  • Any rebate an individual may have falls away when the asset is in the trust. For example, capital gains rebate on a primary residence.

Through AED Attorneys, proper estate planning helps to legally ensure that assets provide for family and loved ones, rather than the taxman. Here are some recommendations from AED Attorneys, but are by no means exhaustive:

  1. Set up an Inter Vivos Trust

This is a living trust, created whilst an individual is still alive. It allows the trust owner to access their assets, which may be property, investments or cash while they are still alive. On their passing, the designated beneficiaries of the trust are granted access to the remaining assets and the trust is managed by a successor trustee.

  • Invest in a Retirement Annuity (RA)

RA’s are attractive from both an investment and estate planning perspective. The contributions are tax-deductible; they enjoy a tax-free grow on their value and are excluded from the deceased’s estate.

  • Buy Life Insurance

Life insurance can effectively fund any taxes due on the estate after death.

  • Leave R3.5m To The Trust

As mentioned earlier, estates worth less than R3.5m will not attract estate duty. Also, any amounts left to a spouse are free of estate duty and capital gains tax until the spouse sells the asset. Therefore, leaving R3.5m to the trust allows children to benefit from the estate duty exemption of both parents. Recent changes to the law have reduced this need, but leaving money to a trust should still be considered for growth assets.

While it is worth being informed about estate planning, it can get quite complicated. AED Attorneys helps clients set up Wills and Trusts to make provision for dependants and minimise estate duties legally.

AED Attorneys understands that every situation is unique. Although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable, for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

Surviving Spouses – What You Should Know About Tax and Estate Duties

When the definition of a “spouse” was introduced into the Income Tax Act No. 58 of 1962, the Estate Duty Act, and the Transfer Duty Act in 2001, it brought specific tax implications for spouses.

How does South African law define a spouse?

In terms of the definition of a “spouse” under South African law, it refers to a person who;

is the partner of another person in a marriage or customary union recognised by the laws of South Africa;

people in a partnership recognised as a marriage by any religion; and 

people of the same sex or in a heterosexual union which has satisfied the SARS Commissioner about its permanency.

What taxes become due when a spouse dies?

Spouses enjoy a certain amount of leniency from SARS when it comes to donations between them and property transfer duties. Should their marriage break-up or one of the spouses die, the remaining spouse will not be liable for transfer duty on any property they jointly owned.

Also, Section 4q of the Estate Duty Act (Act 45 of 1955) stipulates that the value of all property bequeathed to the surviving spouse, either in respect of a Will or by intestate succession, is deductible from the gross estate of the deceased.

What Capital Gains Tax must a spouse pay?

When one spouse passes away, estate duty is not payable on any asset left to the remaining spouse. Neither is Capital Gains Tax payable on an asset’s disposal from one spouse to another. This is because the spouse who is the recipient is considered to have acquired the asset at a base cost equal to that of the deceased spouse.

What happens if the surviving spouse has not been provided for in the Will?

In instances where the surviving spouse has not been sufficiently provided for, they are entitled to claim from the deceased estate in terms of the Maintenance of Surviving Spouses Act 27 (1990).

What happens to the surviving partner if the couple was not legally married?

However, it is important to realise that the above exemptions only apply to partners who fall under the legal definition of a spouse. The decision as to whether the remaining unmarried partner will receive any pension fund benefits (if applicable) leaves them at the mercy of the retirement fund trustees. As per the Pension Funds Act, trustees must identify the deceased member’s dependants so that the funds may be fairly distributed.

Increasingly, many people choose to rather co-habit instead of formalising their union in a legal marriage under South Africa’s laws. Although there may be clear indications that partners can be considered as spouses in terms of the legal definition, the administration will prove challenging under the Fiscal Acts when one partner dies.

Examples of this would be such as when two people have been living together for many years yet have no intention of marrying each other, and one of them dies. There is usually strong evidence to prove that they were spouses by the legal definition under these circumstances. If established, they may be entitled to some of the financial benefits when their co-habiting partner passes away.

Therefore, it would be advisable for partners living together to record a Co-habitation Agreement to avoid any disputes arising in the event of a break-up or a death. In addition, both parties should also draw up their own Will wherein it states what each partner is to inherit from the other upon one of them dying.

How to prove a Life Partnership when one co-habiting partner dies

If no Co-habitation Agreement exists when one partner passes away, then the onus will be on the surviving partner to qualify as a spouse in the eyes of the SARS Commissioner. Three affidavits will be required from different parties confirming that the relationship existed for some time. Besides the three affidavits, the following may also prove useful as supporting documentation to establish the life partnership:

  • Co-habitation Agreement
  • Legal Will
  • Proof of joint ownership of fixed property or other assets
  • Proof of medical aid with the partner registered as a dependant
  • Any policies mentioning the partner as a beneficiary
  • Joint bank account

What is the impact of the Intestate Succession Act, 1987 (Act 81 of 1987)

If a partner or spouse dies without a Will, the estate falls under the law of intestacy, which means that the Executor  [AD1] will divide the estate, according to a set formula, among any surviving children[AD2]  and spouse first. If there are no children, then the estate will be given to the legal spouse, and if there is no spouse, then it falls to the deceased’s parents[AD3] . In this case, the surviving partner will not be able to inherit as a spouse, unless he or she was married to the deceased.

Failure to leave a Will behind may leave the surviving spouse or partner in a predicament, should the parents or children seek to take possession of the deceased’s assets.

AED Attorneys provides professional advice and assistance with the drawing up of Wills or Co-habitation Agreements which will help prevent most disputes should a spouse or partner pass away.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable, for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.


 [AD2] and spouse

 [AD3] add:  In this case a person that only lived with a partner will not be able to inherit as a spouse.