How to Improve Your Chances of Getting Bond Approval.

Tips for Improving Your Chances of Getting Bond Approval in South Africa

By: Kasper Brits – Brits Law Inc.

Published Monday, 30 January 2024.

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Securing a bond is a critical step in making your dream home a reality. However, navigating the bond approval process can be daunting, especially if you’re unfamiliar with the intricacies of the system. At Brits Law, we specialise in real estate law and conveyancing services, and we understand the importance of securing a bond for our clients. In this article, we’ll discuss several tips to help improve your chances of getting bond approval in South Africa.

1. Maintain a Good Credit Record:

2. One of the first things lenders consider when evaluating your bond application is your credit history. A good credit record demonstrates to lenders that you’re a responsible borrower who is likely to repay the loan on time. To improve your credit record:

  • Pay your bills on time. Many people are unaware of the fact that even making a rental payment late by two days through a real estate agent will result in that agency flagging your late payment on your credit record. The same counts for most other monthly recurring payments that you may make.
  • Keep your credit card balances low.
  • Checking your credit profile too regularly actually influences your credit record negatively.
  • Applying for credit too often influences your credit record negatively.
  • Maintain a balance between assets and liabilities on your monthly expenses and make sure your bank is aware of all your large asset payments.
  • Have at least some sort of monthly account which you pay by debit order. If you have no debt, you will not necessarily have the best credit score. Having a simple cell phone bill that is paid on time will be better than someone who has no rolling debit orders on their bank account in some cases. The banks need to see how you cope with credit and if there is no history of credit, they would not be able to assess your risk to them.

3.Use a Bond Originator: Bond originators act as intermediaries between you and the banks, helping you find the best bond deal for your needs. They have relationships with multiple lenders and can negotiate on your behalf to secure competitive interest rates and favourable terms. Here’s how bond originators can assist you:

  • They streamline the application process, saving you time and effort.
  • They have access to a wide range of bond products, increasing your chances of approval.
  • They provide expert advice and guidance throughout the entire process.

4. Consider Co-Signing with a Spouse: If you’re having trouble qualifying for a bond on your own, consider asking your spouse or partner to co-sign the application with you. Co-signing essentially means that both parties are equally responsible for repaying the loan. Here’s how cosigning can benefit you:

  • Combining both incomes can increase your overall affordability.
  • If one applicant has a stronger credit profile than the other, it can help offset any weaknesses in the application.
  • It demonstrates to lenders that there’s added security in the form of joint responsibility.

5. Save for a Larger Deposit: A larger deposit not only reduces the amount you need to borrow but also demonstrates to lenders that you’re financially disciplined and committed to the purchase. Here’s why a larger deposit can work in your favour:

  • It reduces the lender’s risk, making you a more attractive borrower.
  • It may improve your loan-to-value ratio (LTV), which can result in better interest rates and lower monthly repayments.
  • It gives you more negotiating power when discussing terms with the bank.

6. Seek Pre-Approval Before House-Hunting: Getting pre-approved for a bond gives you a clear understanding of how much you can afford to borrow, which can help you narrow down your property search and make competitive offers. Here are the benefits of seeking pre-approval:

  • It shows sellers that you’re a serious buyer with the financial means to purchase their property.
  • It speeds up the buying process since much of the paperwork has already been completed.
  • It gives you peace of mind knowing that your financing is in place when you find the perfect home.

7. Don’t apply for other finance at another institution while you are waiting for your final bond approval:

  • We see many people make the mistake of applying for car finance after they have applied for a home loan. The inevitable result of this is usually that the bond application will be declined.

In conclusion, securing bond approval in South Africa requires careful planning and preparation. By maintaining a good credit record, using a bond originator, considering co-signing with a spouse, saving for a larger deposit, and seeking pre-approval before house-hunting, you can significantly improve your chances of success. At Brits Law, we’re dedicated to helping our clients navigate the complexities of the real estate market. Contact us today to learn more about our conveyancing services and how we can assist you in achieving your homeownership goals.


Empowering Consumers: Understanding and Exercising Your Rights in South Africa

Empowering Consumers: Understanding and Exercising Your Rights in South Africa

By: Johan Vermeulen – Brits Law Inc.

Published Thursday, 25 January 2024.

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In the vibrant landscape of South Africa’s diverse consumer market, understanding and asserting your rights is crucial for a fair and transparent marketplace. The protection of consumer rights not only ensures a level playing field but also contributes to a healthier, more sustainable economy. Let’s look at some of the key aspects of consumer rights in South Africa, and how they can protect you.

The Consumer Protection Act (CPA)

At the forefront of consumer rights in South Africa is the Consumer Protection Act, signed in 2009. This legislation is designed to empower consumers, promote responsible business practices, and enhance consumer confidence. The CPA provides a consistent and comprehensive legislative and enforcement framework, covering various aspects related to consumer transactions and agreements. These include fair marketing practices, the right to privacy, and protection against unfair marketing and business practices.

Right to Fair and Honest Dealing

One of the most important tools for shielding customers from unsolicited marketing messages is the Consumer Consumers in South Africa have the right to fair and honest dealing in the marketplace. This includes protection against misleading advertising, false product claims, and deceptive practices. Businesses are obligated to provide accurate information about their products and services, allowing consumers to make informed decisions.

Right to Privacy

The protection of personal information is a fundamental consumer right. The CPA outlines strict guidelines for the collection, storage, and use of personal data by businesses. Consumers have the right to know how their information is being used and can opt out of direct marketing communications.

Right to Safe and Quality Goods

Consumers are entitled to products that are safe, of good quality, and fit for their intended purpose. If a product fails to meet these standards, consumers have the right to return or exchange it within a reasonable time. Manufacturers and suppliers are also held accountable for any defects or hazards associated with their products.

Right to Fair and Responsible Marketing

Businesses are required to engage in fair and responsible marketing practices. This includes avoiding false or misleading representations and refraining from unfair business practices. Consumers have the right to accurate information, and businesses should not exploit vulnerable individuals or use coercive tactics. This can also include unwanted sms’s, telephone calls, letters or ‘spam’ email.

Right to Fair and Reasonable Terms & Conditions

The CPA protects consumers from unfair contract terms. Standard form contracts must be transparent, written in plain language, and not contain terms that unreasonably favor the supplier. Any financial obligations must be clearly outlined and itemized. Consumers have the right to challenge unfair contract terms and seek redress.

Recourse and Remedies

In the event of a breach of consumer rights, individuals have various recourse options. This may include seeking a refund, replacement, or repair of a defective product. The National Consumer Commission (NCC), as well as the National Consumer Tribunal(NCT) play a crucial role in enforcing consumer protection laws, and consumers can lodge complaints with these regulatory bodies.

Understanding and exercising consumer rights in South Africa is essential for fostering a robust and equitable marketplace. The Consumer Protection Act serves as a powerful tool to empower consumers and hold businesses accountable. By being informed and assertive, consumers play a vital role in shaping a fair and responsible economy that benefits everyone. Remember, your rights as a consumer are not just privileges; they are the foundation of a balanced and ethical marketplace.


THE INCREASING LIABILITY ON BUSINESSES SHOULD THEIR EMAILS BE COMPROMISED

THE INCREASING LIABILITY ON BUSINESSES SHOULD THEIR EMAILS BE COMPROMISED

By: Kasper Brits–  Brits Law Inc.

Published Wednesday, 27 June 2023, 19:04 PM 

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Cybercrime is on the rise and the global result thereof is that there is an increase in the duty of care a business needs to maintain when communicating via email with its clients. Very little case law existed in this field until recently when a surge of reported matters have been dealt with on appeal in court.

During January 2023 in the case of Hartog v Daly, the court determined that an attorney was responsible for the funds he inadvertently paid into the wrong bank account. A fraudster gained unauthorized access to an email exchange between the attorney and his client, and subsequently sent the attorney an email posing as the client, providing instructions to transfer the funds into the fraudster’s account. Since the email appeared to originate from his client, he mistakenly transferred the funds to the fraudsters account, believing it to be his client’s. In this matter the attorney challenged the bank but ultimately failed in this attempt as it was established that the bank had followed the proper procedure to open the bank account to which the moneys have been paid. This case set a precedent that if a person does not do proper due diligence before making payment, the other parties right to claim the outstanding amount from that person lasts, notwithstanding the fact that the money had been stolen by a fraudster.

Few businesses maintain the appropriate security measures when sending out emails, particularly when large amounts of money are being discussed and requested.

ATTORNEYS LIABLE

Furthermore, in January 2023, a significant legal case known as Hawarden v ENS Inc unfolded in the Johannesburg High Court, where one of the nation’s largest law firms was entrusted with the role of conveyancers. Regrettably, due to a breach in their email security, the firm became liable for reimbursing a property purchaser a substantial sum of R5.5 million. This situation arose when the compromised emails led the purchaser to mistakenly making a payment into a fraudulent bank account which was changed on the firms pdf document. The court mentioned that there are numerous security measures which may have prevented a compromise in their emails such as:

  • Implementing DMARC and SPF on their systems,
  • Encrypting documents and using OTP’s to transfer sensitive information such as banking and payment information,
  • Listing the firms bank account as a public recipient at the bank rather than using account numbers,
  • Informing clients of the risks involved with making large payments and to follow a secure procedure
  • Accurately confirming bank details telephonically.

The above case was published via email by the legal practice council to each firm in the country and resulted in a panicked attempt by some to address their liability. Numerous law firms responded by adding a disclaimer on their email signatures stating that their clients must call to confirm banking details before making payment. In our opinion the disclaimer alone will not be sufficient to rise to the standards as set in the above case.

At this stage the latest standard in duty of care which is set in the ENS matter only relates to legal practitioners, however, time will tell if this obligation toward security will spread to other businesses. The same precedents have already been set in the financial service industry as well and the international trend points to businesses being liable toward their clients when their business or even their clients emails have been compromised. Our courts tend to follow the trend of international law and internationally, the law is in line with the precedents as set in both of the above new court matters so any new matters or appeals  in these matters will likely not bring a significant change.

 

BEWARE THE CYBERCRIMINAL

Our firm has seen an influx of clients who need assistance in recovering their money from illusive cybercriminals. These individuals can be very hard to track down and as such any negligent and compromised business is held responsible instead.

We already mentioned a few possible security measures which may be implemented /  followed. In addition thereto:

  • Everyone needs to be weary of the risks involved with business email compromise.
  • Adequate insurance to cover any losses due to cybercrime should be kept by certain businesses.
  • Make sure you partner up with a trustworthy business that has adequate security measures in place before going on large financial transactions through / with them.

In our opinion as well as that of top internet security professionals your business can never be 100% protected from email compromises. Even the famous Hillary Clinton and Joe Biden’s emails have been compromised and leaked after a successful cyberattack / hacking attempt on their emails. These individuals have some of the latest technology and procedures to ward against this threat and still failed against an ever evolving enemy.

We expect the year ahead to surely provide more caselaw and developments in this field as numerous similar cases are being appealed and brought to court.

If you have suffered damages due to business email compromise from your service provider, get in contact with one of our legal practitioners for assistance.


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