Property Developers Beware: Deemed Accruals Can Seriously Disrupt Your Cash Flow

Legal
A recent Supreme Court of Appeal (SCA) judgment of Milnerton Estates Limited v Commissioner for the South African Revenue Service (1159/2017) [2018] ZASCA 155 has confirmed that when a property developer enters into an agreement with a buyer to transfer the property, even if the developer only actually gets paid in a subsequent tax year, the income is deemed to have accrued to the developer at that date. The developer must therefore include the full proceeds of the sale in its income tax return for the year the agreement was signed. This has the effect of the property developer paying tax before receiving the proceeds of the sale, putting the developer out of pocket until transfer to the purchaser takes place. A R1.9m tax assessment challenged A property developer in Cape Town entered…
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Victims of Corruption Take Heart – “Big Chief” Gets 15 Years Behind Bars

Legal
We are all of us tired of reading about the rampant corruption in our society, and even if you aren’t one of the many businesses or individuals directly affected, everyone is ultimately a victim. Let’s take heart then from two recent Supreme Court of Appeal (SCA) decisions. Firstly, to set the scene – Minimum sentences for corruption Corruption in terms of the Prevention and Combating of Corrupt Activities Act is an offence which, when more than R500,000 is involved, carries a minimum sentence of 15 years’ imprisonment, even for first offenders, “unless there are substantial and compelling reasons justifying a lesser sentence”. The R500k threshold is reduced to R100k where a “common conspiracy” is at play and to only R10k where a law enforcement officer is involved. Confiscation orders are…
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Beware the Building Deadlines When Buying-to-Build

Legal
The case of Walker and Another v Cilantro Residential Estate Homeowners Association (A3067/16) [2016] ZAGPJHC 299 is yet another warning from our courts to take seriously the building deadlines commonly imposed on buyers of plots in residential estates. Failure to comply with them could expose you to heavy fines, recurring penalties and even the risk of losing your plot altogether. A Home Owners Association (HOA) imposed “double levy” penalties totalling R105k on the owners of a plot when they failed to start development of their house before the deadline. Taken to court, the owners challenged the validity of the penalties on a variety of technical and other grounds, but failed on every count. The end result is they must now pay the penalty levies, late payment penalties, and attorney-and-client legal costs for both the…
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Paternity Leave and Minimum Wages – How Will The New Laws Affect You?

Legal
Employers and employees need to know about four new Acts which will usher in important changes to our labour laws. The summary below is a short one of only those changes likely to affect a significant number of people and businesses, so take advice on your specific circumstances. In a nutshell – Parental leave extended Until now, mothers have been entitled to unpaid leave when welcoming a new child into the world, in the form of 4 consecutive months’ “maternity leave”. Plus they can claim maternity benefits from the UIF if they are contributors. New fathers however have been limited to at most 3 days’ family responsibility leave. That will now be extended to – “Parental leave”: “Parents” (i.e. including fathers and same-sex partners) – 10 consecutive days’ parental leave. “Adoption…
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Firearm Owners: What to Do if Your Licence Has Expired

Legal
Possession of an unlicensed firearm is, for good reason, a serious offence carrying heavy penalties, and law abiding citizens will support the police in their efforts to rid our country of illegally-held firearms. It’s a major problem, with media reports suggesting that only 3m out of a total of 5.3m guns are registered and legally owned. That’s 2.3m illegal firearms out there! Caught up in this are the almost half a million South African gun owners who have always held their firearms legally in terms of valid licences but have, for whatever reason, not renewed them on time. Not only private citizens are involved but also security service providers, and it’s a big issue - the Court in this case estimated that up to 60 million rounds of ammunition are…
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Lending to a Friend or Selling Property on Credit – Must You Register as a Credit Provider?

Legal
It seems logical that the very strong consumer protections in the NCA (National Credit Act) are designed for commercial situations in which credit is advanced by “credit provider” businesses to “credit consumers”. But does the NCA also apply to non-commercial, once-off loans? Like a loan to a friend or relative? And what about property sales? Why should you be worried? If you aren’t in the business of providing credit it seems counter-intuitive that you should have to worry about NCA registration when making a single loan or giving credit on a once-off basis. And in fact until now our various High Courts have been split over the question. But that has all changed with a recent Supreme Court of Appeal (SCA) decision in the matter of Du Bruyn NO and…
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When is a Debtor “Insolvent”? A Case of Arrear Maintenance Illustrates

Legal
If you are owed maintenance you have a variety of enforcement options open to you and should ask your lawyer for advice on which is the best for your particular claim and circumstances. A recent High Court judgment of V v V (7833/2016) [2018] ZAGPPHC 505 confirms that one of the weapons in your legal armoury is the sequestration application. And as the defaulter’s desperate attempt to avoid sequestration in this particular case illustrates, even just the threat of sequestration can be a powerful motivator to settle up, regardless of whether your claim is based on maintenance arrears or on any other form of debt. The reason is that an insolvent has to surrender control of his/her estate to a Trustee, who collects and sells all the insolvent’s assets and divides the proceeds…
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It’s “13th Cheque” Time Again: Must You Pay Annual Bonuses?

Legal
Once again November is upon us, and no doubt employees around the country are starting to dream of all the good things they can do with that “Christmas” bonus coming their way. If you are one of them perhaps you plan to pay off debt or to re-charge the family’s batteries with a special holiday. Or perhaps you just want to reward yourself and your loved ones with a bit of free-spending on a luxury or two to celebrate a special time of year. That’s all well and good, but the hard reality is that every year a percentage of employers decide that they can’t afford a sudden doubling of their staff costs and will call everyone together to say something like “Sorry guys, times are really tough so no…
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Buying Property this Festive Season? Check the Title Deed First!

Legal
If you plan to buy property this Festive Season – perhaps your new dream house, or a holiday home, or an office for your business, or purely as an investment – check the title deed of the property you have your eye on before you sign anything. Why is that so important? Firstly, what exactly is a title deed and why check it? In a nutshell, a “Title Deed” (also called a “Deed of Transfer” – they’re the same thing) is proof of who owns a particular property. It’s issued by the local Deeds Office after a conveyancing attorney has registered transfer to a new owner. The title deed is a mine of crucial information relating to the property, its history, and conditions attaching to it. So check it thoroughly,…
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Can I Have Pets in a Residential Complex?

Legal
Residential complexes and estates are becoming more and more popular for the many advantages they provide. Remember however that – in everyone’s interests – they also come with restrictions on your freedom to use and enjoy your property, and that you bind yourself to whatever Conduct Rules apply in your community scheme. One of those restrictions is likely to be your right to keep a pet, and that’s a topic that can be a source of much conflict and unhappiness. Residents tend to fall into one of three camps – “I really need to have my little dog/cat/parrot/lizard living with me” “I simply cannot handle any more of that parrot-screeching/lapdog-yapping/midnight-cat-yowling – it has to go!” or “Pets – don’t need them myself but hey, fine so long as they don’t…
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