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Don’t think twice about a lapsed offer as basis for new sale final judgment

On the 9th of December 2014, Jubi Properties (Pty) Ltd submitted a written offer to purchase (the Offer) a property owned by Boyce. The Offer was irrevocable until 17h00 on 12 December, thereafter it would lapse. However, the offer was not accepted within the stipulated time frame.

The parties met again on 14 December (2014) and negotiated and agreed to change the Offer through a handwritten document referred to as the ‘heads of agreement’. Initially they intended to draft a fresh agreement, however they did not.

At the meeting held on the 14th, they also decided to backdate the agreement to the 12 December 2014. According to Jubi, this was due to the parties’ common concern that if the agreement reflected acceptance on 14 of December Jubi would be accepting a lapsed offer. Hence in order to avoid any confusion, they backdated it.

Some details of the agreement stated

  1. a) The purchaser was identified as ‘Jubi Properties and/or a nominee’;
  2. b) The Offer contained a suspensive condition that Jubi would furnish Boyce with a letter of satisfaction regarding its due diligence inspection within 10 days, failing which the agreement would lapse;
  3. c) A non-refundable deposit of R400 000 was payable within 48 hours after the due diligence acceptance letter.

The due diligence was completed by 24 December (2014). Jubi advised Boyce of the satisfaction of the due diligence requirement and the parties gave effect to the agreement on the basis that it had been rendered unconditional, through the payment of the deposit.

Jubi properties then sought to exercise its right to appoint a nominee and chose a third party company to be the purchaser. It sought to cancel the agreement and to enter into a new deal. Nothing followed from this and Jubi remained the intended transferee.

In March 2016, Boyce’s attorneys advised Jubi that the agreement had lapsed due to nonfulfillment of the suspensive condition, or had been canceled pursuant to Jubi’s alleged repudiation of the agreement. The lapse of the agreement allegedly arose from the failure to comply with the due diligence within ten days after 12 December 2014.

The letter of satisfaction was furnished only on 24 December, the provision was not complied with and the agreement lapsed. The repudiation, Boyce further argued, related to Jubi’s (alleged) statement that it did not have sufficient funds, evidenced by it seeking to avoid the levy of double transfer duty on the transaction.

The critical issue for determination was the date upon which the ten day period for the performance of the due diligence and delivery of the letter of satisfaction commenced. The Offer provided expressly that it would lapse if not accepted by 17h00 on 12 December 2014. The Offer was not accepted hence it lapsed automatically.

The final verdict took into consideration that the fact that the parties chose to utilize the terms of the Offer that had lapsed in establishing their agreement on 14 December 2014, was irrelevant to the fact that the agreement came into existence on the 14th OF December 2014. A term of a contract cannot come into existence or commence operation prior to the establishment of the

Does your property require a gas compliance certificate?

Regulations issued under the Occupational Health and Safety Act, states that an authorized person must issue a gas compliance certificate after installation, modification, or alteration of a gas installation or where there is a change of user or ownership within a property.

According to regulation, 17(3) of the Pressure Equipment Regulations promulgated in terms of the Occupational Health and Safety Act 85 of 1993, that became effective from the 1st of October 2009. It makes it compulsory for a gas compliance certificate to be obtained in the event that a property is sold.

The fact that the gas appliances on your property have been installed before the Act became effective does not mean that you are exempt from getting the gas compliance certificate. It is a requirement that must be met.

When a property is sold, a new certificate must be obtained, regardless of how old or recent the existing one may be. The gas compliance certificate warrants that gas appliance on the property is safe according to standards.

It is recommended that a gas compliance certificate is obtained on the sale of the property. The seller is usually responsible for obtaining such certificate. The requirement of a gas certificate cannot be waived however the responsibility can be shifted from the seller to the purchaser by way of an appropriate clause in the agreement.

The recommended clause for sale agreement states that “ the seller undertakes to, at the seller’s expense obtain, from an accredited person, a Certificate of Conformity confirming that any gas installations on the Property comply with section 17 (3) of Government Notice R73 of 15 July 2009, Government Gazette 32395.

The certificate shall be delivered to the Purchaser prior to the date of occupation or within 5 days of demand for delivering. The parties agree that the Certificate of Conformity certifies that any gas installation on the Property complies with safety standard as determined by the relevant legislation and is not to be regarded as a general guarantee covering all aspects of any gas installation on the Property.

The Purchaser shall have no further claims against the seller with regard to any gas installation on the Property.

There is no need to wonder why you might need a gas compliance certificate because the regulation provides that every owner or user of gas reticulation equipment and systems must have a valid gas certificate.

The Occupational and Health Safety and Safety work OHSA does not only aim to ensure health and safety at work areas only but within properties too.

Body Corporate Remedies within a Sectional Title Scheme

Residents living within a sectional title scheme might wonder how their Body Corporate can resolve problems that can arise within a settlement.

For instance, the letting agent has removed the entrance door of the unit, seeing that the tenant has defaulted on his rental payments. This foul and intimidating tactic have become a practice to ensure prompt payment.

They are remedies that are available to the Body Corporate and the defaulting tenant with reference to the conduct of the letting agent. The conduct of the letting agent is defined has spoliation.

According to a property agent, “The common boundary between any section and another section or common property shall be the median line of the dividing floor, wall or ceiling.

Hence half of the entrance door that was removed by the letting agent is common property. The letting agent has not only deprived the tenant of an entrance door but the Body Corporate as well.”

A property attorney comments, “I would recommend that the Body Corporate and the tenant alternatively, the registered owner of the unit to proceed with a spoliation application against the letting agent.

The conduct of the letting agent is unlawful and the remedy of a spoliation application is a reasonable move to take.”

He also added, “The protection from Harassment Act 17 of 2011 (the Act) came into operation 3 years ago in 2013 offers an effective, simple inexpensive civil remedy to victims of harassment. It is an invaluable instrument for the protection of a victim’s rights to privacy and dignity.”

A victim of any harassment can rely on this act as it is broad and includes any conduct that causes mental, psychological or economic harm to a victim. Conduct that includes pursuing or watching a person is included in the act specifically.

A victim can, therefore, approach the magistrate and apply for an interim protection order against the perpetrator. If the court finds that the harassment has truly taken place a court must grant a protection order.

If the perpetrator appears on the return date and opposes the issuing of the protection order. After the hearing, if the court finds that the respondent has engaged or is engaging in harassment a protection order must be issued.

A local property agent noted, “With regards to boundary walls and fences, as a land owner you have the power to use, alter, destroy or sell your property in any way that you please within the state and local authority regulations provided. You do not interfere with your neighbor’s rights.”

According to the property agent, boundaries within your property mark where your rights begin and end. If any dispute occurs, the first recommendation is to check your title deeds of your property. For instance, if a branch of a tree growing next-door overhangs your property.

You can request your neighbor to cut the branches off. If your neighbor refuses your request, you have the rights to cut the hanging tree branches. You can also proceed to recover the expense of removing the branches.

The property attorney comments, “I would like to urge victims within a sectional title scheme to find out their rights and to make use of laws that are relevant to them. Make use of the law. Do not leave a situation to escalate to a point where the damage is irreparable. If you do not know what to do, contact your property manager or agent to help you

Comprehensive approach to property management

With the recent severe flooding conditions that were experienced in some parts of Johannesburg. It’s important to reflect and to look at what could have been done to minimise the damage made to properties.

The magnitude of any consequential damage could have been reduced, for instance if building maintenance checkups were done.

Building structures must be frequently maintained and carefully examined. The following regular checks to your property are essential.

Before the rainy season make sure that you check the roof and replace any loose or damaged tiles, slates, ridge tiles and any other roof claddings or flashings. Repair any signs of cracks and of wear.

Remember to also check the condition of roof skylights for leaks and cracks or breakages. Check and repair all cement fillets and brickwork pointing, including chimneys, coping stones, lintels and ledges.

Check that the roof gutters and down pipes are clean and unobstructed, kept free from leaves and vegetation. These should be cleaned at least once a year, possibly more often.

As professional property managers at Fitzanne Estates we advise our clients to make sure that they conduct regular property checkups and making sure that they acquire the appropriate insurance to protect their property. If you are involved in renting or leasing real estate to others, managing rental properties, contracting services for rental properties owners it is very essential to be insured.

Property managers must have insurance that covers their business, their clients, their tenants and all the properties that they manage. A well designed insurance policy must protect you from liability claims and losses that can be caused by, floods, perils, like fire, vandalism or burglary.

Research shows that they are available insurance options for the property sector. The errors and omissions (E&O) Insurance is designed to protect you from claims against invasion of privacy, wrongful eviction, hiring unlicensed contractors etc. This insurance protects the tenant and landlord from a financial loss that is directly related to a mistake make by the property manager.

While the errors and omissions insurance covers services offered by a property manager. General liability insurance is intended for the day to day business practices of any company, regardless of the industry. Both Errors and Omissions coverage and General Liability insurance are set in place for your property management business to cover the day to day business as well as specialized services provided.

A local insurance provider shared some insurance tips for property managers, he said, “you must purchase enough coverage to protect the value of the property and assets. Make sure the policy covers not only physical injury but also libel, slander, discrimination, unlawful and retaliatory eviction, and invasion of privacy suffered by tenants and guests.

Carry liability insurance on all vehicles used for business purposes, including the manager’s car or truck if it’s used on the job. If you’re a real estate investor or private owner renting out your home, you need landlord insurance. Landlord insurance is more than just homeowners insurance.”

A Fitzanne Estates property agent said, ‘’At Fitzanne Estates amongst our property management services that we offer we can help with the revision of the insurance coverage of the Body Corporate/Non Profit and arrangement of valuations where required.

We undertake to obtain competitive quotations in the marketplace to ensure that the most economical premium is obtained. The necessary comprehensive insurance includes political riot insurance and fidelity guarantee insurance. We also handle all insurance claims on behalf of the Body Corporate/Non Profit Company.”


Anxiety levels of some Managing Agents and Trustees shot through the roof when the news broke that the long awaited Sectional Title Schemes Managing Act (“STSM” – 8 of 2011) and Community Scheme Ombud Service Act (“CSOS” – 9 of 2011) will come into operation in October 2016. We asked some of the industry leaders and “antique personnel” over the Gauteng region’s Property Management companies what their thoughts are on the industries latest bombshell. The results were as expected, some welcomed it with open arms and others are still on the fence.

Some of the changes in the STSM Act include;

  • Members of a Body Corporate scheme are now not allowed to represent more than two members (that being him/herself and one other member) at an Annual or Special general meeting by way of proxy. Section 6.(5) of the STSM Act.
  • An Executive Managing Agent can be appointed by way of Special resolution “to perform the functions and exercise the powers that would otherwise be performed and exercised by the Trustees”. rule 28.(1) of Annexure 1.
  • Administrative and reserve funds need to be established and maintained to cover the following costs (As per rule 24.(1)and(2) of Annexure 1);
  • (1) “The administrative fund referred to in section 3(1)(a) of the Act must be used to fund the operating expenses of the body corporate for a particular financial year”.
  • (2) “The reserve fund maintained in terms of section 3(1)(b) of the Act must be used for the implementation of the maintenance, repair and replacement plan of the body corporate referred to in rule 22”.

The STSM and CSOS Act consist of the following:


  • The Sectional Titles Scheme Managing Act 8 of 2011;
  • Annexure 1 – Management Rules;
  • Annexure 2 – Conduct Rules and;
  • Annexure 3 – Forms.




  • The Community Schemes Ombud Service Act 9 of 2011 and;
  • The Community Schemes Ombud Service Act 9 of 2011 levies and fees.


CSOS levies work as follow-


Monthly levy charged by the community schemes Monthly CSOS Levy Payable
Zero to R 500.00 R 0.00
R 600.00 R 2.00
R 700.00 R 4.00
R 800.00 R 6.00
R 900.00 R 8.00
R 1 000.00 R 10.00
R 1 250.00 R 15.00
R 1 500.00 R 20.00
R 1 750.00 R 25.00
R 2 000.00 R 30.00
R 2 250.00 R 35.00
R 2 500.00 and above R 40.00


For more info or Property Training dates please contact our offices: // 012 342 3710 .


By Bianca du Plooy

Fitzanne Estates






Decision-making within a Sectional Title Scheme



When you become an owner in a Sectional Title scheme, you automatically, enter into relationships and you might be required to be part of the decision-making process.


Some of these decisions will affect what you can do with your property. How you can use and enjoy your home. Buying into a scheme typically involves a trade-off between the type of home we wish we could have and what we can afford. Where we want to live as well as what’s available on the market.

In an ideal world, anyone would buy in a scheme that is well run, financially sound and one that has no major structural defects or maintenance issues. However many prospective purchasers have only the faintest idea what Sectional Title ownership really involves.

As well as the restraints and obligations it imposes. It is after one move in that you wish you had conducted thorough research of what you were buying into.

“The Sectional Titles Act (STA) of 1986 defines the rights and obligations of the various stakeholders who bring a Sectional Title scheme into being, and who manage and live in it.

These rights and obligations are also set out in the Prescribed Management Rules (PMRs) and the Prescribed Conduct Rules, B issued under the Act. Many people do not know the extent to which what can and cannot be done in a Sectional Title scheme.

According to a Sectional Title Agent when you take transfer of a Sectional Title unit, you instantly become a member of the Body Corporate. The Body Corporate consists of all the owners of units in the scheme.

The Body Corporate meets at least once a year as it must transact certain mandatory business that includes adopting a budget and electing Trustees. If necessary special general meetings can be arranged to discuss issues that need to be resolved.

Body Corporate decisions require a majority vote. However some many require higher level of consensus, according to research data, it includes,

Ordinary resolutions.- Decisions that can be made by passing an ordinary resolution with a simple majority include approving the budget, electing or removing Trustees, and imposing specific restrictions or directions on the Trustees.

Special resolutions – A special resolution requires the consent of 75 percent of the owners. Some of the decisions that must be made by a special resolution are amending the conduct rules, suing the developer of the scheme; authorising “non-luxurious” improvements etc.

Unanimous resolutions- A unanimous resolution requires a quorum of 80 percent of the owners and no votes against the resolution (abstentions are counted as votes in favour). Other decisions that require a unanimous resolution include alienating or leasing part or all of the common property and making “luxurious” improvements to the common property.

In order for some resolutions to be made in a general meeting, some decisions require the written consent of owners is a requirement. It is vital that you obtain a copy of the management and conduct rules before you buy into a Sectional Title scheme.

Trustees enforce all the duties and responsibilities of the Body Corporate and they are responsible for the day-to-day management. The Trustees are accountable to the Body Corporate and have the authority to make a number of decisions without reference to the owners unless a resolution restricting their powers has been passed.

Decisions that can be done by the Trustees are appointing a managing agent, approving the consolidation of subdivision of sections, imposing fines for contraventions of the conduct rules etc.

A majority of Trustees are members of the Body Corporate and they volunteer their services and time. If you want to be involved in the management and if you want to safeguard your investment, you might just have to volunteer and become a Trustee.

Do you know how to calculate your levy?

Calculation of levies:


The majority of new owners who buy into Sectional / Full Title Schemes are not informed by the Sales agent what a levy is or how it is calculated.


We at Fitzanne Estates receive numerous queries regarding the above, Let us enlighten you!


Firstly, Levies are being calculated by the participation quota of each unit and used mostly for the repair, upkeep, control, management and administration of the common property.


The Sectional Title Act 95 of 1986 stipulates in Section 37 (1) (d):


“37. Functions of bodies corporate –


(1). A Body Corporate referred to in section 36 shall perform the functions entrusted to it by or under this Act or the rules, and such functions shall include;


a) to establish for administrative expenses a fund sufficient in the opinion of the Body Corporate for the repair, upkeep, control, management and administration of the common property (including reasonable provision for future maintenance and repairs), for the payment of rates and taxes and other local authority charges for the supply of electric current, gas, water, fuel and sanitary and other services to the building or buildings and land, and any premiums of insurance, and for the discharge of any duty or fulfilment of any other obligation of the Body Corporate;



d) to raise the amounts so determined by levying contributions on the owners in proportion to the quotas of their respective sections;”


Definition of participation quota:


As per The Sectional Titles Act 95 of 1986 –


“participation quota’, in relation to a section or the owner of a section, means the percentage determined in accordance with the provisions of section 32 (1) or (2)* in respect of that section for the purposes referred to in section 32 (3)**, and shown on a sectional plan in accordance with the provisions of section 5 (3) (g)***;”-


* Were Section 32 (1) or (2) stipulates


“32. Participation quotas


(1). Subject to the provisions of section 48, in the case of a scheme for residential purposes only as defined in any applicable operative town planning scheme, statutory plan or conditions subject to which a development was approved in terms of any law, the participation quota of a section shall be a percentage expressed to four decimal places, and arrived at by dividing the floor area, correct to the nearest square metre, of the section by the floor area, correct to the nearest square metre, of all the sections in the building or buildings comprised in the scheme.


(2). Subject to the provisions of section 48, in the case of a scheme other than a scheme referred to in subsection (1), the participation quota of a section shall be a percentage expressed to four decimal places, as determined by the developer: Provided that


a)    where a scheme is partly residential as defined in any applicable operative town planning scheme, statutory plan or conditions subject to which a development was approved in terms of any law, the total of the quotas allocated by the developer to the residential sections shall be divided among them in proportion to a calculation of their quotas made in terms of subsection(1);

b)    where a developer alienates a unit in such a scheme before the sectional title register is opened, the total of the quotas allocated to the respective sections and the participation quota of that unit must be disclosed in the deed of alienation; and

c)    where such disclosure is not made, the deed of alienation shall be voidable at the option of the purchaser and that the provisions of section 25 (15) (b) shall mutatis mutandis apply in respect of any such alienation.”


** Were Section 32 (3) stipulates



“(3). Subject to the provisions of subsection (4) of this section, the quota of a section shall determine


a)    the value of the vote of the owner of the section, in any case where the vote is to be reckoned in value;

b)    the undivided share in the common property of the owner of the section; and subject to the provisions of section 37 (1) (b), the proportion in which the owner of the section shall make contributions for the purposes of section 37 (1) (a), or may in terms of section 47 (1) be held liable for the payment of a judgment debt of the Body Corporate of which he is a member.”




*** Were Section 5 (3) (g) stipulates


“5. Manner of preparing draft sectional plans


(3). A draft sectional plan shall –


a) …

b) …

c) …

d) …

e) …

f)  …

g) have endorsed upon or annexed to it a schedule specifying the quota of each section in

    accordance with section 32 (1) or (2) and the total of the quotas of all sections shown



Formula for calculating levies:


Calculating a PQ (participation quota) –


Total square meters of Scheme ÷ Total square meters of your unit = PQ


e.g.  1162 m2    ÷     95 m2   =  8.1756


Calculating a levy –


  1. Total budgeted amount x PQ of your unit = Answer
  2. (Answer ÷ total PQ of Scheme) ÷ 12 = Monthly Levy


e.g.  R 221 088.00    x    8.1756    =    R 180 7527.05

( R180 7527.05    x    100.0000) ÷ 12    =    R 1506.27

Rounded off to a total of R 1506.00


Property Buyers Experience Setback Due to Recent Hike in interest rate

The January Interest hike pressured the South African Monetary Policy Committee to make a decision to help stimulate growth in the economy. The South African Reserve Bank Governor previously announced that the bank would make an increment of 25 basis points to 7% per year from March 2016.

The CEO of The Pam Golding Property Group, Dr Andrew Golding had pinned his hopes on the repo rate remaining stable. This was after the rand had gained some strength taking some pressure off the monetary policy.

On the global state, the Federal Reserve Bank is not hiking rates assertively as expected; the European Central Bank continues to ease the monetary policy.

A property agent comments –
“The country’s on-going challenging economic pressures and fundamentals are allowing growth in the housing market. Regional and area-specific demand is more dependent on a range of factors including convenient location, lifestyle, infrastructure as well as long term investment potential.

We are currently in an upward repo rate cycle. Interest rates are still not near the highs of 2008 and there are not expected to increase significantly. Housing activity in South Africa has slowed. Demand for homes remains strong and the market still retains its resilience.”

This is noted by the market confidence shown by experienced developers, who still bring new stock to the market place areas where uptake is brisk, notwithstanding recent weakness in the rand and the volatility of the stock market.

The property agent noted, ‘’from October 2015 to date, the experience of the top end of the residential property market – as defined by properties greater than R10 million and up to R100 million as there was previously an increase in sales activity by as much as 30 percent in recent months. This market has been brisk in the Western Cape, Boland and Overberg, North Coast of KwaZulu-Natal and the Garden Route.”

The luxury market that was quieter last year as picked up, in the Western Cape Town Metro, with prime properties on the iconic Atlantic Seaboard at top-end prices, with an apartment on the beach in Clifton selling for R29 million for 288sqm which is equivalent to just over R100 000 per sqm.

The increase is due to trends including: a migration of high net worth buyers from north of the country, from Gauteng to the Western Cape, and other coastal areas. The investment market had an overall increase in foreign buyers both from Africa and the rest of the world.

Most African investors purchase property in South Africa because they are seeking either investment properties or personal residences, while some individuals are purchasing luxury seaside residential properties or other ‘lifestyle properties’ as an excellent means to diversifying property portfolios and securing long-term investment assets.

Residential property transactions rates on the rise


The overall value of sales in the South African housing market is steadily increasing, from 2014 to 2015 an 8.3 increase in the value of residential property transactions was recorded.

Despite the gross domestic growth (GDP) not gaining momentum and remaining low. New vehicle sales are plunging while an increase upward interest rate cycle is evident.

About 50% of residential properties are in Gauteng and the Western Cape account for at least two thirds of the total residential market value.

The high value suburbs that experienced a strong capital growth last year include Sandton and Parktown in Johannesburg. La Lucia and Mount Edgecombe in eThekwini in KwaZulu-Natal, Green Point and Rondebosch in Cape Town.

Despite asset buying consumers decreasing, property investing is still a priority for most South Africans. The analytics director of Light stone, a provider of in depth information, valuations and market intelligence in the South African property sector noted this factor while addressing the latest gathering in the Overview of the SA Property Industry conference. The conference took place at Val del Estate outside Paarl in the Western Cape.

Gated Estate vs. Property Tycoon Court Case Results

A property kingpin from Mount Edgecombe housing estate in Durban recently lost his legal contest to overthrow what he refers to as “draconian rules” that involve speed limits, access for domestic workers and contractors.

The property tycoon who is a resident at the estate argued and stated that the roads within the estate were public property governed by the National Road Traffic Act. He said that the general speed limit would be 60km/h, not 40km/h as it is on the estate.

However the judge refused this submission, stating that the rules were private/internal and that there were placed for ensuring a lower speed limit within the gated community, taking into consideration, animals, pedestrians and children.

Rules for domestic workers and contractors similarly were prescribed to ensure, orderly ingress and egress of a number of people that work at the homes in the estate.

The judge noted, “Rules are there to regulate conduct between neighbours and as necessity, must be restrictive to take into account the cumulative rights of the use and enjoyment of the estate by all its residents.”

He added, “Rules might irk one’s individual sense of propriety and fairness because of their restrictive and regimented nature, they cannot be said to be contrary to public policy.”

The judgment embedded the rights for homeowner associations that are on gated estates to enforce laws for that promote good community living.

With regards to property investors challenge in regards to the restriction for the use of accredited contractors approved by the association, the judge said it was not unreasonable to ensure that those doing the work were competent. “I see no reason why there cannot be a list of accredited service providers. The rules do not provide for a closed list and the association says when an owner wishes to use a contractor not already on the list, he can apply and as long as the contractor is suitable, accreditation will be granted.”

A home owners association comment to the matter; “This will clearly set the precedent for any future court cases within South African courts. Home owners associations do have power over residents who think they are on top of the law.”