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SECTIONAL TITLE LEVIES : PAY THEM, OR ELSE!
If you own property in a sectional title scheme, not keeping your levy payments to the Body Corporate up to date could cost you a lot more than you think.
Until the latest amendment to the Sectional Titles Act came into force last year, all members could be held personally liable for the debts of the Body Corporate. Now however the Act protects you from attack by Body Corporate creditors provided that you were fully paid up on your levies prior to judgment being given against the Body Corporate. The protection may not be watertight because you must be paid up "in respect of the same debt" (which might open up a bit of a grey area in some instances), but it is much better than no protection at all. So every day that you are in arrear with your levies is another day of unnecessary risk for you.
Protect your investment: -
- Check on the financial health of the scheme before buying in to it
- Make sure that the Body Corporate is properly managed and controlled at all times
- Pay your levies - every time, on time
- If ever a creditor attacks the Body Corporate, insist on professional assistance being brought in immediately; and take advice on your own possible exposure if the amount involved is significant.
TOW, TOW, TOW YOUR BOAT...................
................ merrily, merrily, merrily etc. But only if you have a driver's licence coded "EB". You need an EB code to tow a trailer, caravan etc with a GVM over 750kg. If you had a code 08 under the old licence system, your replacement "credit card" licence should automatically be EB. Otherwise you need to take a test with the precise vehicle combination that you intend to use the licence for; so if you take the test in just a car, you will have a code "B" licence, and are limited to driving a car of less than 3500kg GVM, and towing a trailer of no more than 750kg. Check that you have the right licence - you will not be popular with the family if you are pulled over in the middle of nowhere and forced to leave the trusty trailer/caravan/speedboat by the side of the road.
P.S. From 1 January 2006, all trailers and caravans (new and old) must have yellow reflective tape along at least 80% of the sides and rear, fitted at least 250mm above the ground but not higher than 1.5m.
WHEN THE EARLY BIRD LOSES THE WORM
Pyramid investment schemes have been around for a long time. Conventional wisdom is that it's OK to "invest" provided you get in near the beginning, because the early bird investors take the loot whilst the latecomers take the losses. That has indeed often been the practical outcome, but a recent Supreme Court decision puts even the "early birds" at substantial risk if the scheme is subsequently liquidated.
A liquidator has powers to recover any monies paid out by a liquidated scheme during the six-month period prior to liquidation, unless the recipient can prove that the disposition was made "in the ordinary course of business" and without intention to prefer one creditor above another. The Court dismissed a constitutional challenge to this provision - it is valid. You aren't safe even after six months, although the onus of proof then shifts to the liquidator.
The result - if you invest in a "too good to be true" scheme, even in the early days, make sure that you can afford the risk of losing it all - because you probably will.
STOPPED AT A SPEED TRAP - WHAT TO DO
If you are stopped at a speed trap, request sight of all of the following for whatever speed measuring device is in use: -
- A valid calibration certificate
- The type approval certificate to SABS 1795 (this is applicable to equipment acquired after 30 April 1998)
- The operator's certificate
These must always be available for inspection at the site of the trap, and you are also entitled to have sight of the speed measured.
For good advice on why not to speed in the first place, have a look at the Arrive Alive speeding page at www.arrivealive.co.za/pages.asp?mc=speeding&nc=accidentsspeed
A DEBTOR'S HOME IS (NO LONGER) HIS CASTLE
Lending money on the security of a mortgage bond over residential property has just become a lot safer.
Your chances of recovering a debt are greatly increased if you hold some form of security, and a mortgage bond over immovable property has always been regarded, for good reason, as one of the best forms of security.
However, confidence in the value of such bonds as security was severely shaken by several High Court decisions last year. The decisions followed a Constitutional Court ruling that disallowed execution against a house on the basis of the Constitution's section 26, which enshrines a right of access to adequate housing. As a result it became difficult to have any residential property declared executable; in practice, creditors who thought they had good security were often left with unenforceable judgments.
Now however the Supreme Court has held in a test case that residential houses of defaulting bondholders may indeed be attached and sold, without necessarily falling foul of the Constitution. The debtor still has an opportunity to show that execution will infringe a right to adequate housing - indeed the Summons must advise the debtor of this right, so there is no guarantee that your bond will in the end result be enforceable. But it is clear from the judgment that debtors will not find it easy to convince courts to refuse execution, particularly when they elected to bond their houses as security.
ROYALTIES - BEWARE THE TAXES
If you are involved in any franchise or similar operation, or thinking of setting up or buying into one, be careful how you structure the payment provisions of your agreement. Recently the Cape Tax Court held that royalty payments (in this case, fees in terms of a trademark licence agreement for the use of trademarks and related rights) are capital in nature, and therefore not tax deductible. The result - if you pay royalties under a trademark licence, franchise or trading agreement - is likely to be that you are effectively going to have to bear an additional 29% on the cost of your royalties in the future. Moreover if you successfully claimed deductions in the past, SARS may well now recover these from you.
Some experts are suggesting that the problem does not arise where a franchisee has a diversity of business lines, or where payments are classified as management fees; but in any case the structure of your agreement could be crucial.
WEBSITE OF THE MONTH
Whatever you want to know, about anything, a good starting point is an encyclopaedia.
Wikipedia at www.wikipedia.org is a free "online open-content collaborative encyclopedia, that is, a voluntary association of individuals and groups who are developing a common resource of human knowledge."
The site contains immense resources of information on every conceivable subject, supplemented by specialised sections such as:
- The Wikimedia Commons with free content images, sound and other multimedia files.
- Wikibooks, a collection of free textbooks, manuals, and other texts
- Wikinews, a free content news source "where citizen journalists can independently report the news on a wide variety of current events"
- Wiktionary dictionary and thesaurus
- Wikiquote's collection of quotations
- Wikisource - the free library
- Wikispecies, a directory of species
The encyclopaedia's accuracy is said to be high, indeed comparable with other, subscription-based alternatives. But read the site disclaimer, which warns that content has not necessarily "been reviewed by professionals with the expertise required to provide you with complete, accurate or reliable information".
Note: Copyright in this publication and its contents vests in LawDotNews(law.news)
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