The obligation to provide access to certain information about your business

A1_BlogThe Promotion of Access to Information Act (PAIA), No 2 of 2000, was enacted in an effort to foster a culture of transparency and accountability in the public and private sector. It gives effect to the constitutional right of access to any information held by the State or any other person and that is required for the exercise or protection of any rights of any person.

This implies that any person whose rights may be affected may request any of the prescribed information as defined in the Act from a public or private body by following the applicable procedures. The public or private body is then legally compelled to provide such information in the prescribed manner.

Section 51 of this Act requires the head of a private body to compile, within six months after the commencement of this section of the Act or within six months after the establishment of the private body, a manual containing certain prescribed information, such as:

  • postal and street address, phone and fax numbers and email address of the private body;
  • the latest notice regarding the categories of records of the private body which are available without a person having to request access in terms of the Act;
  • a description of available records generated by the private body, indicating which records are automatically available and which records are available on request;
  • the request procedure to be followed in terms of the Act, as well as the applicable fees;
  • a statement confirming the head of the public body;
  • other information as prescribed by the Act.

This manual should be updated every time a change in the prescribed information occurs and must be:

  • submitted to the Human Rights Commission;
  • submitted to the controlling body of which the private body is a member (if applicable);
  • published on the private body’s website (if applicable).

A private body is defined as:

  1. a natural person who carries on any trade or business or profession;
  2. a  partnership that carries on any trade or business or profession;
  3. any former or existing juristic person, but excluding a public body.

When a person requests information in terms of this Act, it must be provided if:

  1. the information is requested to exercise or protect a right;
  2. the person follows the correct procedure as prescribed by the Act;
  3. access to that information cannot be denied on any of the grounds of refusal as stated in the Act.

The deadline for the submission and publication of the PAIA Manual for public and private bodies was 31 December 2011. However, for certain private bodies in certain economic sectors, this has been extended until 31 December 2015.  These exceptions are based on:

  • the economic sector in which the private body operates its business;
  • the total number of employees being less than 50;
  • the turnover of the private body being less than a certain amount per economic sector.

This extension does not otherwise impact on the enforcement of this Act, and the rest of the requirements of the Act are currently enforced.

The penalty for non-compliance is two years imprisonment or the possible option of fines.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

Estate agents commission

A2_BlogA problem that frequently occurs in practice and which is not easy to solve is whether an agent was in fact instrumental in bringing about the sale of the property. It could happen that an agent introduces a prospective buyer, that negotiations for the sale do not succeed and that another agent succeeds in concluding the agreement. It is common practice for more than one agent to be instructed to find a purchaser. It could even happen that a seller is held responsible for paying commission to two agents.

An estate agent is not an agent in the strict sense of the word.  His “mandate” is normally to find a suitable purchaser for the seller’s property and not to sell on behalf of the seller. This is, however, not a contract in the usual sense where parties undertake reciprocal obligations. In fact, the agent is not obliged to perform his mandate. An estate agent will only be entitled to commission if he has a mandate from the seller; without the mandate he is not entitled to commission even though he might have been the effective cause of the transaction.

An estate agent will be considered to be the effective cause of the transaction when:

  • he has introduced a willing and financially able buyer to the seller;
  • a binding contract has been concluded between the parties; and
  • the transaction takes place at the stipulated price or at a price acceptable to the seller.

When several estate agents are involved in introducing the buyer to the seller it might be difficult for the court to determine which agent was the effective cause. For instance, when estate agent A introduces the buyer to the seller but the buyer later purchases the property through estate agent B after B has persuaded the seller to drop the price.

Estate agent A may have a sole mandate, but estate agent B introduced a willing and able buyer. The seller could then be liable for both estate agents’ commission. A sole mandate usually stipulates that the agent is entitled to commission if the property is sold during the currency of the agreement, even if another agent introduced the buyer.

In another matter a prospective buyer was introduced and the house was inspected. The price was considered too high. A few months later the purchaser noticed that the house was still in the market. He then bought the property without any intervention from the agent at a slightly lower price than the price he had rejected earlier. The estate agent was held to be entitled to his commission.

How much commission is an estate agent entitled to? The average commission ranges up to 7.5%, however there are no regulations as to how much commission an estate agent should be paid per sale. The commission should be discussed by the parties when negotiating the mandate.

Sole mandates that are given to estate agents are regulated by the Consumer Protection Act. The duration of the agreement may not exceed 24 months.  The seller has the right to cancel the agreement by giving 20 business days’ notice in writing. If the mandate is not terminated by the seller on the expiry date it will automatically continue on a month-to-month basis.

Seller, be wary of these pitfalls when selling your property – they could be very costly.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

Does the service of a notice of joinder interrupt prescription?

A3_BlogIn the recent judgment of Peter Taylor & Associates v Bell Real Estates and Renasa Insurance Company the Supreme Court of Appeal was requested to decide whether the court of first instance was correct in deciding that the service of a notice of joinder interrupted prescription.

The relevant sections of the Prescription Act provide as follows:

 

  • Section 15(1) –The running of prescription shall, subject to the provisions of subsection (2), be interrupted by the service on the debtor of any process whereby the creditor claims payment of debt.
  • Section 15(6)- For the purposes of this section, ”process” includes a petition, a notice of motion, a rule nisi, a pleading in reconvention, a third party notice referred to in any rule of court, and any document whereby legal proceedings are commenced.
  • Section 15(5) deals with the situation that is applicable where a person applies to be joined as a defendant in an action and provides as follows that if any person is joined as a defendant on his own application, the process whereby the creditor claims payment of the debt, shall be deemed to have been served on such person on the date of joinder.

In the Peter Taylor matter the Plaintiff was seeking to join a further defendant in terms of Rule 10(3) of the court rules.

The court referred to various matters pointing out the opposing positions held by our courts. The crisp point on which the court relied for prescription to be interrupted was the question of whether the process served can be considered as a step in the enforcement of a claim for payment of a debt. The court held that it would be “stretching the interpretation of the Act a little too far to say that the application constitutes a ‘process’ whereby the creditor claims payment of the debt” and that its service thereof interrupted prescription.

The Court found that it could not be said that the joinder application finally disposed of some elements of the claim and also that cause of action in the joinder applications differed from the cause of action for damages that was initially pleaded.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

How to change your marital status to another form of marriage contract

A4_BlogSection 21(1) of the Matrimonial Property Act No. 88 of 1984 provides that a husband and wife may apply jointly to court for leave to change the matrimonial property system which applies to their marriage.

Requirements

The decision in Lourens et Uxor 1986 (2) SA 291 (C) sets out guidelines that the courts follow with regard to applications in terms of section 21(1) of the Matrimonial Property Act.

In order for the parties to change their matrimonial property system, the Act mentions the following requirements:

  • There must be sound reasons for the proposed change.

According to South African Law, the parties who wish to become married out of community of property must enter into an antenuptial contract prior to the marriage ceremony being concluded. If they fail to do so they are automatically married in community of property.

Of course, many people are unaware of this provision and should be able to satisfy the court that it should change their matrimonial property system if it was their express intention that they intended to be married out of community of property.

  • Sufficient notice of the proposed change must be given to all creditors of the spouses.

The Act requires that notice of the parties’ intention to change their matrimonial property regime must be given to the Registrar of Deeds, must be published in the Government Gazette and two local newspapers at least two weeks prior to the date on which the Application will be heard, and must be given by certified post to all the known creditors of the spouses.

Moreover, the draft Notarial Contract that the parties propose to register must be annexed to their application.

  • The court must be satisfied that no other person will be prejudiced by the proposed change.

The court must be satisfied that the rights of creditors of the parties must be preserved in the proposed contract. The application must therefore contain sufficient information about the parties’ assets and liabilities to enable the court to ascertain whether or not there are sound reasons for the proposed change, and whether or not any particular person will be prejudiced by such change.

Once the court is satisfied that the requirements have been met it may order that the existing matrimonial property system may no longer apply to their marriage, and authorize the parties to enter into a Notarial Contract by which their future matrimonial property system is to be regulated on such conditions as the court may deem fit.

  1. It should also be stated whether or not either of the applicants has been sequestrated in the past and, if so, when, and in what circumstances. The case number of any rehabilitation application must be furnished.
  2. It further needs to be stated whether or not there are any pending legal proceedings in which any creditor is seeking to recover payment of any alleged debt due by the couple or either of them.

Care must be taken to motivate fully the proposed change in the existing matrimonial property system. Applicants must explain why no other person will be prejudiced by the proposed change. In any event, the order sought, and the contract which it is proposed to register, shall contain a provision which preserves the rights of pre-existing creditors.

  • The application must disclose where the parties are domiciled and, if they are not resident there when the application is made, where they are resident. If there has been a recent change in domicile or residence it should be disclosed so that the Court can consider whether the application has been brought in the appropriate forum and/or whether or not additional notice of the application should be given. Ordinarily the application should be brought in the Court in whose area of jurisdiction the parties are domiciled and ordinarily resident.

The negative side

Unfortunately, the application is expensive in that both spouses have to apply to the High Court on notice to the Registrar of Deeds and all known creditors, to be granted leave to sign a Notarial Contract having the effect of a postnuptial contract which, after registration, will regulate the new matrimonial property system.

It would thus be cheapest and best to approach an attorney or notary prior to the marriage ceremony being concluded to draft a proper antenuptial contract regulating the matrimonial property of the parties involved, without any confusion.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

Nwanda Internal news (October)

  • Finder’s Fee Reward
    If you refer a friend and the friend is employed by Nwanda you will receive R5 000 after the employee successfully completes the probation period.
  • Office closure
    We wish to notify our clients that our offices will be closed from 23 December 2013 and will re-open on 6 January 2014.
  • Study Leave
    We wish the best of luck to all our trainee accountants going on study leave in November 2013. Study hard and make us proud!
  • Santa Shoebox
    The Santa Shoebox Project is an inspiring community initiative of the Kidz2Kidz Trust that co-ordinates the donation, collection and distribution of personalized gifts at Christmas time to underprivileged children across South Africa and Namibia.

50 Boxes were contributed by Nwanda staff!

  •  Awesome Rewards
    This Month’s awesome reward goes to: Sifiso: For his great work on SA Council of Professional and Technical Surveyors; Francis Venter: For her unselfish assistance with wrapping most of the Santa Shoe Boxes.