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From MF Legal:
In 2011 we dealt with many topics. Two of these topics have since had further developments or have been clarified.
The first of these is the infamous voetstoots clause in the Consumer Protection Act 68 of 2008 (CPA) and the other is with regards to the transfer of immovable property from a company, close corporation or trust to an individual. Here’s an update for our valued clients and agents on those issues that have since changed.
1. Voetstoots clause
In 2011 we dealt with many topics. Two of these topics have since had further developments or have been clarified.
The first of these is the infamous voetstoots clause in the Consumer Protection Act 68 of 2008 (CPA) and the other is with regards to the transfer of immovable property from a company, close corporation or trust to an individual. Here’s an update for our valued clients and agents on those issues that have since changed.
1. Voetstoots clause
One of the issues, which confused many in 2011, was the issue of the voetstoots clause and the Consumer Protection Act 68 of 2008.
There has finally been a recent case on the matter. The case is Banda and Another v Van der Spuy and Another (08/5489) [2011] ZAGPJHC 126 (23 September 2011). This case held that if the seller is unaware of the defect in the property, he cannot be held liable for the defect. This case specifically dealt with a defect only a roof expert could have picked up and therefore the seller could not have been expected to guess that the roof would have a latent defect.
Thus the principal that ‘a seller is protected by the voetstoots clause’ still stands, so long as the seller is not aware of the defect. Sellers will, however, have to disclose every other defect of which they are aware. Unfortunately the case was silent on whether an estate agent could be liable in terms of the CPA. Again we will have to wait for a court to rule on the matter. Until a court confirms this, agents must be willing to take it upon themselves to thoroughly inspect properties and notify purchasers of their findings and not merely take the seller’s word for it, as we do not yet know if agents may be held liable in terms of the voetstoots clause and the CPA.
2. Transfer of property from Company or Close Corporation to an individual
In 2011 we were advised that there would be tax relief for a person if they transferred their property from a company, close corporation or trust into the name of an individual. This deadline was December 31, 2011 but has now been extended until the 31 December 2012. What this means it that those who do such a transfer will still be exempt from paying transfer duty, capital gains tax or secondary tax on companies until the December 31, 2012. Please contact us for more information on this.
There has finally been a recent case on the matter. The case is Banda and Another v Van der Spuy and Another (08/5489) [2011] ZAGPJHC 126 (23 September 2011). This case held that if the seller is unaware of the defect in the property, he cannot be held liable for the defect. This case specifically dealt with a defect only a roof expert could have picked up and therefore the seller could not have been expected to guess that the roof would have a latent defect.
Thus the principal that ‘a seller is protected by the voetstoots clause’ still stands, so long as the seller is not aware of the defect. Sellers will, however, have to disclose every other defect of which they are aware. Unfortunately the case was silent on whether an estate agent could be liable in terms of the CPA. Again we will have to wait for a court to rule on the matter. Until a court confirms this, agents must be willing to take it upon themselves to thoroughly inspect properties and notify purchasers of their findings and not merely take the seller’s word for it, as we do not yet know if agents may be held liable in terms of the voetstoots clause and the CPA.
2. Transfer of property from Company or Close Corporation to an individual
In 2011 we were advised that there would be tax relief for a person if they transferred their property from a company, close corporation or trust into the name of an individual. This deadline was December 31, 2011 but has now been extended until the 31 December 2012. What this means it that those who do such a transfer will still be exempt from paying transfer duty, capital gains tax or secondary tax on companies until the December 31, 2012. Please contact us for more information on this.
