Did you know that the insolvency of one spouse, even in a marriage out of community of property, can affect the status of the solvent spouse? In terms of Section 21(1) of the Insolvency Act the estate of the solvent spouse will also (initially) fall under the control of the Curator.

The deeds office will register an interdict against the personal details of the solvent spouse to the effect that the Curator will first have to confirm that the solvent spouse is free to deal with his or her own estate. This can be problematic where the solvent spouse wants to sell property or purchase property in cash.

When dealing with a sales transaction subject to VAT, it is important to obtain insight into the Seller’s VAT compliance background - the reason being that SARS is on a war path to put a stop to attempts by taxpayers to avoid paying VAT and/or transfer duty and personal tax. SARS has implemented measures to check a Seller’s compliance records to determine whether the Seller is guilty of not paying timeously, having outstanding payments or even not filing returns timeously. If any of the mentioned circumstances exist, SARS may require the Seller to take certain steps before issuing the transfer duty exemption, such as:

• Resolve outstanding obligations; or
• Provide security for VAT payments of current transaction; or
• Instruct the transferring attorney to undertake to pay VAT directly to SARS from the proceeds of the sale within 5 days of registration.

If you have acquired your ex-spouse`s share of a previously jointly owned property after your divorce, be that by Court order or private agreement, you need to submit a written application to the Registrar to endorse on the Title Deed that you alone are entitled to deal with the property.

Once the Title Deed has been endorsed in this way, you will be entitled to deal with the property as if you had taken formal transfer or cession into your name of your former spouse`s share of the property.

Transfer Duty July 2011

In nominal terms, May 2011 data were better than in April 2011, but the property market is still suffering from lack of mortgage finance from banks.

In real terms, the trend is virtually sideways.

The annual percentage change is nudging the zero line, implying that real levels are the same as a year ago.

WATER CERTIFICATES: A NEW TRANSFER REQUIREMENT

A new by-law published by the City of Cape Town (section 14 of 2010) now requires the Seller in a property sale transaction to submit a water certificate to the City before transfer of a property in order to obtain rates clearance.  The date of implementation is still uncertain.

This “water certificate” is similar to the electrical and gas certificates already required and basically requires an accredited plumber to certify that:

• the water installation conforms to the National Building Regulations
• there are no defects
• the water meter registered
• there is no discharge of storm water into the sewerage system

This however does not mean that the Seller is obliged to carry the costs of having such certificate issued and is a matter that can be negotiated between the Seller and the Purchaser.

It remains to be seen what impact this new requirement will have on the transfer process, but the general feeling in the conveyancing world is that it will not be a positive one. The definition of the term “water installation” and its required conformity to the National Building Regulations will no doubt create countless problems for Sellers trying to sell their property, this biggest being a financial burden when it comes to costs.

It is therefore strongly advise that any potential Seller takes this new requirement very seriously and consult with their attorney before entering into any potential sale agreements.