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Buying On Auction? Understand The Conditions!
Set-Off, Swings And Roundabouts
Double Bunk Danger!
Rogue Employees And Pension Funds
Customary Law Marriages: More Protection For Women
Government Applications - Demand A Decision, And Don't Take It Lying Down
Important Tax Changes Coming Soon
January Website: Foxy Thinking For 2009
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| JANUARY 2009 |
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BUYING ON AUCTION? UNDERSTAND THE CONDITIONS!
With the current wave of distressed property auctions, you may find yourself looking for a bargain at an auction. Follow these guidelines - - Firstly, have a clear idea of your limit before you start bidding, and stick to it!
- Then pay close attention to the terms and conditions of the auction - you will be bound by them if you are the highest bidder, and it is essential that you understand exactly what your rights and obligations are. For example, you must have your finances in order before the auction - if you need a bond, have it pre-approved. If you don't, and if the bank then declines your bond application, you stand to lose your deposit, and risk claims for damages and commission.
- If the sale is subject to a "confirmation period" by the Seller (usually 7 days), and if you hear nothing from the auctioneers within that period, don't just assume that your offer was rejected and rush off to buy another house. Auction conditions often override the normal rule that an offer to purchase only becomes a binding sale when acceptance is communicated to the offeror. Thus the Supreme Court of Appeal recently upheld an auction sale where the Seller signed the agreement within the confirmation period, but the Buyer only heard of the acceptance weeks later.
Don't take a chance - seek advice if there is anything you don't fully understand!
SET-OFF, SWINGS AND ROUNDABOUTS
In this time of increased levels of business failure, you need to keep a closer eye than ever on your debtors.
When you and a debtor have reciprocal debts (i.e. the debtor owes you money for something, and you in turn owe the debtor another amount of money for something else), the temptation is to think to yourself: "Well, I'm not worried about Bloggs & Co being liquidated, because I owe them more money than they owe me. If they fail, I come out on top".
Of course it doesn't work like that. In the absence of a valid set-off (where one debt is set-off against the other to reduce or extinguish it), the liquidator will recover from you in full, whilst you must stand in line for a concurrent dividend. Since concurrent dividends are rarely awarded (statistically, you will be lucky to get even 5 cents in the Rand), you effectively lose out on both the swings and the roundabouts.
Before you give in to this unhappy scenario - in fact at the first warning sign that your debtor may be in financial distress - take legal advice because, subject to certain requirements and exceptions, set-off may yet come to your rescue.
But note that it must take place before liquidation, not after - in a recent case for example, one of the reciprocal debts was due at date of liquidation but not payable until after, and the Supreme Court of Appeal concluded that set-off could therefore not apply.
DOUBLE BUNK DANGER!
A tragic case recently before the High Court illustrates the very real dangers of allowing children to sleep in the top bunk of double bunk beds without a safety rail adequate enough to prevent them from falling out.
A grade three pupil on a school excursion had apparently been sleeping in a top bunk bed and had fallen out, sustaining traumatic brain injury and ongoing epilepsy. The "small planks" installed on the bunks were held to have been inadequate, and both the school that organised the outing, and the owners of the bungalows accommodating the excursion, were found to have been negligent and liable for damages.
A warning also to anyone in the position of the school relying on an indemnity form - in this case the form signed by the child's parent was held to be ineffective as a result of its exclusionary wording - have all such forms checked before use.
ROGUE EMPLOYEES AND PENSION FUNDS
How do you recover your losses from a dishonest employee who has robbed you blind but has no attachable assets?
Have a look at what's in the employee's pension or provident fund - although in South Africa such funds enjoy very strong protection from creditors, there are exceptions - including employers in respect of "any damage caused to the employer by reason of any theft, dishonesty, fraud or misconduct by the member".
And it isn't necessary to prove your entitlement immediately - a new Supreme Court of Appeal judgment means that pension funds have a discretion to "withhold payment of a member's pension benefits pending the determination or acknowledgement of such member's liability".
But don't delay - there are restrictions, and processes to be followed, so take immediate advice on how to do it quickly, and correctly.
CUSTOMARY LAW MARRIAGES: MORE PROTECTION FOR WOMEN
The Constitutional Court has held that all monogamous customary law marriages are in community of property - not, as was previously the case, only marriages entered into after 15 November 2000 (which default to 'in community' unless otherwise agreed). That will give women in such marriages much greater rights to a share of marital assets.
The Court also struck down as "discriminatory and unfair" provisions in KwaZulu-Natal laws that the husband has ownership and full control of all family property.
GOVERNMENT APPLICATIONS - DEMAND A DECISION, AND DON'T TAKE IT LYING DOWN
We are fortunate in having many dedicated and capable government officials, but if you end up dealing with one of the exceptions - don't take it lying down. If for example you make an application to any government department or agency and then can't get a decision out of it, you may well be entitled to a court order forcing the department to (a) make a decision and (b) communicate it to you.
In a recent case, the High Court strongly criticised the South African Social Security Agency for not advising social security grant applicants as to the outcome of their applications, and awarded costs against the Agency on a punitive scale.
Once you know the decision, you are entitled to demand reasons for it, and to challenge it in court (but act quickly - time limits apply).
IMPORTANT TAX CHANGES COMING SOON
SARS has announced that legislation bringing in several significant changes in the tax laws should be promulgated shortly. If it is, we will look at some of the more important changes in the February issue.
JANUARY WEBSITE: FOXY THINKING FOR 2009
Surviving and thriving in 2009 means adapting to the economic crunch - not just getting through the storm, but also actively seeking out and taking advantage of the many opportunities it offers.
Start off with a bit of crystal ball gazing - scenario planning is far from an exact science, but have a look at where we might be headed with Clem Sunter's "The World and South Africa in the 2010s" on his Mind of a Fox website at http://www.mindofafox.com/the2010s.php.
For an updated scenario discussion see Clem's article "Sun setting on prosperity?" on the News24 site at http://www.news24.com/News24/Columnists/Guest_Column/0,,2-1630-1647_2443030,00.html - and if you need persuading to abandon your "hedgehog" ways in favour of "foxy thinking", read his interview with Moneyweb at http://www.moneyweb.co.za/mw/view/mw/en/page215462?oid=234318&sn=Detail.
Enjoy Your January!
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
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