CPA and Long Term Leases

THE CONSUMER PROTECTION ACT AND LONG TERM LEASES

from MF ATTORNEYS INC

As we get closer to the end of the year we hear estate agents say increasingly that rentals are becoming the preferred choice. Thus, we decided to have a look at what the Consumer Protection Act 68 of 2008, says in this regard.

The Act provides that fixed-term consumer agreements must not exceed a certain maximum period. The current set of draft regulations prescribe this maximum period as a period of 24 months.

Section 14, which deals with expiry and renewal of fixed term agreements, confirms that it applies only to individuals and not juristic persons, i.e. companies or entities. There is currently some uncertainty as to whether an individual landlord who, lets premises to another, in addition to his main business, that is not in the course and scope of business,  falls within the definition of ‘service provider’ or 'supplier’  in order for the Act to apply.  It appears that such transactions do fall under the provisions of the CPA if the activity occurs on a continuous basis, and is not once-off as not to constitute a constant activity.

Debt Counseling versus Sequestration

Our attorneys regularly update us on the latest legal matters.  Here is some information that we believe is valuable and informative.  This table outlines the differences between debt counseling and  sequestration.  Due to the newer legislation around debt counseling, it is currently a far more viable option than sequestration.

Debt Counseling	Sequestration
Regulated by the National Credit Act 34 of 2008	Regulated by the Insolvency Act 24 of 1936
Protection procedure – meant to prevent you from losing your assets whilst paying debt	Procedure that liquidates all your assets to pay the debt
Protects debtor (you)	Protects creditors (the people that you owe)
Creditors cannot harass you for funds once you are under debt counseling	Creditors can and will make claims against your estate once insolvency proceedings are entered
Credit providers receive monthly payment in order to pay off debt	Credit providers receive funds if assets are sold and if sufficient proceeds are accumulated from the sale of assets
Consumer may not incur further debt whilst  under debt counseling unless it is shown to be affordable	Insolvent will we unable to incur debt or obtain credit for a period of 10-15 years after obtaining the court order.
Does not cause an actual black listing on your credit report, merely a flag note	Will cause a blacklisting which will remain on the credit report for a period of 15 years
Cheaper procedure and fees are capped and Regulated by the National Credit Regulator	Costly procedure as it is involves litigation

For further information in this regard, please contact Allison.
These FastFacts are distributed as a matter of courtesy to enlighten all our valued clients of recent and interesting developments in the world of Law by MF ATTORNEYS.

Keep your eyes open...

Earlier this week we published an article aimed at equipping you to make sound and wise decisions when signing an Offer to Purchase.  With such an important contract in hand, you need to ensure that your signature binds you to an agreement that is reasonable and protects both you and the other party.

There are many things to take into account and we encourage you to take your time to read the contract in its entirety before signing it.

To help you know what to look out for – here are some more prudent points:

1. Faults, renovations and defects:  the days of buying ‘voetstoets’ – what you see is what you get – are now in the past (Since the effect of the Consumer Protection Act, April 2011).  If you are buying through an agent or developer, the seller needs to state all and any faults, renovations and defects of the property.  If they agree to fix these, then that needs to be stated in the Offer to Purchase as well as the date by which the jobs should be completed.  Without a deadline, if they are showing intent to fix the problems, you will have a hard time tying them down to a completion date.  If you are able to, taking photographs of the areas in question will help you ascertain if they have been sorted out properly.

Going in with eyes wide open

Contracts can be daunting – especially if you don’t deal with them in your normal course of work.  Signing an Offer to Purchase is a complex agreement that has many facets to protect both the buyer and the seller.  At Rivigan Property Group it’s our job to know these contracts and know how to communicate them to our clients in a way that is clear, honest - and in their best interests.  Many people run into exciting purchases with their eyes wide shut – hoping for the best.  Unfortunately, if you’re not going to read and understand the contract, you may encounter severe problems later on.
 
Before even getting to the point of signing an Offer to Purchase, we strongly advise that your finances and pre-approved bond details are organised and ready.  It is essential that your financial position be as stable as possible, should it change after signing the contract and if it was signed in good faith, it will not be a reasonable and legal consideration to renege on the contract.

Once you get to the point where you have checked out the property, or the developer, and are happy to sign an Offer to Purchase you are well on your way to a smooth and beneficial transaction.  A signed offer constitutes a Deed of Sale; it sets the precedent for all further legalities around the ownership of the property so it’s important to know all the details.

Here are the first five considerations to take note of in your Offer to Purchase:

Semigration - what's the deal?

 Whilst the term ‘semigration’ may be relatively new, the process is centuries old.  It refers to the translocation of people from one region to another region within the same country.  Emigration is one of the buzzwords in most social circles in our country as we struggle to regain ground within the context of economic and political turbulence.

However, for those who have chosen to stay in this beautiful country and tap into the potential that it offers, semigration is a very likely possibility. 

Reasons for relocation may include factors of security and crime, traffic and infrastructure or family and friends, but according to a study done by FNB the primary driver for semigration is work and financial opportunities. 

"Approximately 7% of all sellers sell in order to relocate within South Africa."

This means that most semigration is in the direction of the City of Gold – Johannesburg, the number one in business opportunities.  Despite the allure of the ocean, mountains and lifestyle, Cape Town falls far behind as number two, with KZN following closely behind in third place.

With this reality, you may very well find yourself needing to move to an area that you’ve never been to and have no idea what questions to ask and what to consider.  The Rivigan Property Group is the expert in the Krugersdorp/Ruimsig area and is perfectly situated to help you in finding a home to purchase or rent if you are planning to relocate.

We have a strict code of excellence that we adhere to in every deal and are focused on achieving the best outcome for our clients.  Contact us today for more information.