Marital Regimes In South Africa – Part Three

Marital Regimes In South Africa – Part Three

By: Danelle Meintjes – Brits Law Inc.

Published Friday, 29 March 2024.

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COMMENCEMENT VALUES, EXCLUSION OF ASSETS AND THE CALCULATION OF THE ACCRUAL

1. COMMENCEMENT VALUES

In an antenuptial contract the commencement values refer to the assets and liabilities each party brings into the marriage. These values are typically recorded at the beginning of the contract and serve as a baseline for determining what each party owned before the marriage began.

The purpose of including commencement values is to establish a clear understanding of each party’s financial standing at the start of the marriage. is important in the event of dissolution of the marriage, as it helps to distinguish between assets and liabilities acquired before and during the marriage.

The commencement values of each spouse’s respective estate can be R0.00 and you do not have to include a certain value.

2. EXCLUSION OF ASSETS

The parties can choose to exclude certain assets that will not form part of the marital estate and will not be subject to or included in the accrual calculation. This can include assets owned by one party before the marriage, inheritances or gifts received during the marriage, or any other specific assets the couple agrees should remain separate. An asset excluded in the antenuptial contract and any proceeds received on that specific asset will not form part of the accrual calculation.

Excluding assets in an antenuptial contract can help protect individual property rights and clarify financial expectations in the event of dissolution of the marriage. 

Assets to be excluded must be specifically listed in the antenuptial contract and properly described. Assets which are not properly described can cause problems for the executor or the divorce attorney who will be involved at dissolution of the marriage.

3. HOW THE ACCRUAL IS CALCULATED

Herewith a practical example on how the accrual will be calculated on dissolution of the marriage:

The accrual is determined by subtracting the net asset value of one spouse’s estate at the start of the marriage from the net asset value of that spouse’s estate at the end of the marriage. After calculating each spouse’s accrual value, the smaller growth will have a claim against the larger growth for half of the difference between the two accruals.

For example, if spouse A had an asset value of R10 000.00 at the commencement of the marriage and an asset value of R100 000.00 at dissolution of marriage then the accrual to that spouse A’s estate is R90 000.00. (R100 000.00 – R10 000.00)

If spouse B’s commencement value was R20 000.00 and the dissolution value is R200 000.00, it follows that the accrual to spouse B’s estate is R180 000.00. (R200 000.00 – R20 000.00)

The net accrual is calculated by subtracting the smaller accrual from the larger accrual. In the above example: R180 000.00 – R90 000.00 = R90 000.00.

Therefore, spouse A, as the spouse with the smaller accrual, acquires a claim against spouse B’s estate for half of the net accrual being R45 000.00.

Deciding on the best option for you can be challenging and may require extensive discussion between you and your prospective spouse. We would advise that you make an appointment with our notary at Brits Law to have a thorough discussion with regards to your options and to ensure that the antenuptial contract is tailored to your specific needs.


Marital Regimes In South Africa – Part Two

Marital Regimes In South Africa – Part Two

By: Danelle Meintjes – Brits Law Inc.

Published Friday, 22 March 2024.

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In South Africa, an antenuptial contract is a legal agreement entered into by two individuals before the date of marriage that governs the division of their assets and liabilities in the event of divorce or death. There are two main types of antenuptial contracts: with accrual and without accrual.

In this part two of the Marital Regimes in South Africa blog series we will discuss the difference between an antenuptial contract with accrual and without.

1. ANTENUPTIAL CONTRACT WITHOUT ACCRUAL:

In this type of contract, each spouse retains ownership of the assets and debts they had before the marriage, as well as any assets they acquire during the marriage. This means that if the marriage ends, each spouse keeps what they brought into the marriage and what they acquired during the marriage. There is no sharing of assets or liabilities accumulated during the marriage. All assets and all liabilities will remain the property of the spouse that owns the asset or incurred the debt. While an antenuptial contract without the accrual offers maximum protection of assets, it may provide little security for the financially weaker spouse, as neither party can have a claim against the other’s estate upon dissolution of the marriage by way of death or divorce.

An antenuptial contract without accrual can be beneficial for individuals who wish to maintain separate financial identities during the marriage, or who have significant assets they want to protect in the event of divorce or death. It can also provide clarity and certainty about financial matters, which can help prevent disputes and conflicts in the future.

2. ANTENUPTIAL CONTRACT WITH ACCRUAL:

In a marriage out of community of property with accrual, spouses can share in the growth of their estates on dissolution of the marriage, while also protecting their assets from each other’s creditors during the marriage.

The term “accrual” refers to an increase or accumulation over time. In the context of the accrual system in antenuptial contracts, the underlying principle is that each spouse retains the value of the assets they brought into the marriage. Then, they share the growth or accumulation of assets that occurred during the marriage, reflecting what they have built together.

If you decide to marry out of community of property with the accrual there are further considerations that must be discussed with the notary assisting you. Firstly, you will need to determine your commencement values and secondly, you will need to decide if any assets need to be excluded.

Part three of this blog series will cover commencement values, assets to be excluded and the calculation of the accrual in more detail.

Deciding on the best option for you can be challenging and may require extensive discussion between you and your prospective spouse. We would advise that you make an appointment with our notary at Brits Law to have a thorough discussion with regards to your options and to ensure that the contract is tailored to your specific needs.


Marital Regimes In South Africa – Part One

Marital Regimes In South Africa – Part One

By: Danelle Meintjes – Brits Law Inc.

Published Friday, 15 March 2024.

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Getting married? Then you must face a very important question:  to antenuptial contract or not to antenuptial contract?

When you are getting married it is important to decide if you would like to be married in community of property or out of community of property. If you do not sign an antenuptial contract before the date of your marriage you will automatically be married in community of property. 

Herewith a short discussion to differentiate between married in community of property and married out of community of property: 

1. MARRIED IN COMMUNITY OF PROPERTY:

Marriage in community of property means that there is one joint estate that belongs to yourself and your spouse. The joint estate includes all assets and debts that any of the spouses acquired prior to the marriage as well as all assets and debts acquired during the marriage. This means that you and your spouse share everything equally. You and your spouse will jointly be held liable for all debts incurred. If one spouse is declared as insolvent, the other spouse will automatically also be insolvent. This means that the creditors of the original insolvent person are entitled to, not only attach the assets of the insolvent person but the whole of the joint estate is subject to the insolvency. 

Neither party has full contractual capacity. This means that you cannot enter into any contracts without obtaining the written consent of your spouse. This includes finance for vehicles or properties, opening of bank accounts, opening of accounts at clothing stores etc.

MARRIED OUT OF COMMUNITY OF PROPERTY

If the parties sign an antenuptial contract, duly drafted and attested by a notary public, they will be regarded as married out of community of property. In this marital regime both parties retain their own estate. You will be regarded as a separate financial entity from your spouse.

You do not share the assets or debts as with a married in community of property regime. This is an advantage as each spouse can protect their assets from creditors. Each spouse will have full contractual capacity and you do not need the consent of your spouse to conclude any contracts.

Selecting the appropriate marriage regime is a critical decision for couples, impacting their financial security and legal rights during the marriage and in the event of divorce or death. 

In the second part of this blog series, we will delve into the two types of Antenuptial Contracts available: one with the accrual and one without.

Deciding on the best option for you can be challenging and may require extensive discussion between you and your prospective spouse. We would advise that you make an appointment with our notary at Brits Law to have a thorough discussion with regards to your options and to ensure that the contract is tailored to your specific needs.


Understanding Property Transaction Fees: What Purchasers and Sellers Need to Know

Understanding Property Transaction Fees: What Purchasers and Sellers Need to Know

By: Kasper Brits – Brits Law Inc.

Published Tuesday, 05 March 2024.

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Buying or selling a property involves more than just the purchase price or the proceeds you receive from a sale. There are various fees and costs associated with the transaction that both purchasers and sellers need to be aware of to avoid any surprises. Here is a breakdown of the fees payable when buying or selling a property in South Africa:

Seller’s Responsibilities:

1. Bond Cancellation: If the property has an existing bond, the seller is responsible for paying off the outstanding amount. This includes any early settlement penalties that may apply.

2. Bond Cancellation Attorney’s Fees: The seller is also responsible for the fees charged by the bond cancellation attorney for cancelling the existing bond registered over the property.

3. Property Practitioner’s Commission: If the property was sold with the assistance of a property practitioner, the seller is liable to pay the property practitioner’s commission. This is typically a percentage of the sale price and is negotiable.

4. Levy Clearance Figures: If the property is part of a sectional title scheme, the seller needs to pay levy clearance figures as received by the body corporate or managing agents.. This figure represents any outstanding levies owed by the seller as well as provision for 2 – 3 month’s levies in advance. The transferring attorneys will do a pro rata calculation on the date of registration and the purchaser will be liable for the pro rata amount from the date of registration.

5. Homeowners Association Clearance Figures: If the property is in a residential estate or complex with a homeowner’s association, the seller needs to pay clearance figures to the association. These figures will also include any outstanding amounts owed as well as provision for 2 – 3 months in advance. The purchaser will also be liable for the pro rata amount from the date of registration.

6. Municipal Clearance Figures: The seller is also liable to pay the municipal clearance figures from the local authority. Once payment of the figures is made the transferring attorneys will receive a clearance certificate, indicating that all municipal rates and taxes are up to date.

7. Compliance Certificates: The seller needs to provide certain compliance certificates to the purchaser, including an electrical compliance certificate (COC), a gas certificate (if applicable), and an electric fence compliance certificate (if applicable). These certificates ensure that the property meets certain safety standards.

Purchaser’s Responsibilities:

1. Transferring Attorney’s Fees: The purchaser is responsible for paying the transferring attorney’s fees. These fees cover the transfer of ownership of the property from the seller to the purchaser.

2. Deeds Office Fees: The purchaser needs to pay fees to the Deeds Office for the registration of the property in their name.

3. Transfer Duty: Transfer duty is a tax payable by the purchaser to the South African Revenue Service (SARS) and is calculated on the value of the purchase price of the property. However, certain properties may be exempt from transfer duty, such as properties valued below a certain threshold or if VAT is payable.

4. Bond Registration Attorney’s Fees: If the purchaser is obtaining a bond to purchase the property, they are responsible for paying the bond registration attorney’s fees.

5. Pro Rata Levy Clearance Figures: The purchaser needs to pay a portion of the levy clearance figures paid by the seller, calculated on a pro rata basis from the date of registration.

6. Pro Rata Homeowners Association Clearance Figures: Similar to the levies, the purchaser needs to pay a portion of the homeowners association clearance figures paid by the seller.

7. Initiation Fee to the Bank: If the purchaser is obtaining a bond, they may be required to pay an initiation fee to the bank. This fee covers the administrative costs of setting up the bond.

8. Occupational Rent: if the purchaser wishes to occupy the property before the date of registration, the purchaser is liable to pay occupational rent to the seller.

It’s essential for both purchasers and sellers to factor in these fees and costs when budgeting for a property transaction this will help navigate these complexities and ensure a smooth property transfer.


What to do if I can’t afford conveyancing?

What to do If I can’t afford conveyancing?

By: Mieke Le Roux – Brits Law Inc.

Published Tuesday, 26 September 2023.

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Buying or selling a property is an exciting and significant milestone in life, but it often comes with various associated costs, including conveyancing fees. However, for some individuals, these fees can be a substantial financial burden. If you find yourself in a situation where you can’t afford conveyancing fees, don’t despair. There are several options and strategies you can consider navigating this challenge.

Negotiate fees
Start by contacting conveyancers or attorneys in your area and inquire about their fees. Some may be willing to negotiate or offer flexible payment plans. Explain your financial situation honestly, and see if they can tailor their services to your budget.

Compare quotes
Don’t settle for the first conveyancer you find. Shop around and compare quotes from multiple professionals. This can help you find an option that meets your specific needs.

Government Assistance
Depending on your location and circumstances, there might be government programs or grants available to assist with conveyancing costs, especially for first-time buyers. Research what’s available in your area and check if you qualify.

Seek Legal Aid
In some cases, you may be eligible for legal aid, which provides free or low-cost legal services to individuals with limited financial means. A good idea can be to check with Legal Aid South Africa to see if they can help you with conveyancing.

Delay the Transaction
If your financial situation is extremely tight, you may want to consider postponing your property transaction until you can better afford the conveyancing fees. Rushing into a deal when you’re not financially prepared can lead to greater financial stress down the road.

Alternative Financing Options
Investigate potential loans or financing options that can cover your conveyancing fees. Be sure to understand the terms, interest rates, and repayment schedules before committing to any financial arrangement. You can even contact Pro Bono legal organisations to see if they can assist you.

Remember that purchasing or selling a property is a significant investment, so taking the time to address your financial concerns is an essential step towards a successful transaction.

At Brits Law, we offer comprehensive conveyancing services at recommended rates. Transferring property without hassle is what we do.


REI VINDICATIO VERSUS SPOLIATION

REI VINDICATIO VERSUS SPOLIATION

By: Nico van Deventer – Brits Law Inc.

Published Wednesday, 21 June 2023, 11:24 AM SAST

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When would one need to seek a Spoliation Application or Rei Vindicatio Application in the South African Courts?

When a person finds themselves in situations such as:    

Being unlawfully locked out of your rented residence, unlawful disconnection of your electricity or water;

Unlawfully losing the possession of your movable property which you are the lawful owner through the unlawful conduct of another or third party, for example, loss of your vehicle, loss of access to money in your accounts, loss of access to services or control of mail or server data;

Unlawfully losing the possession of your immovable property which you are the lawful owner through the unlawful conduct of another or third party, for example, loss of access to your estate, residential or commercial property;

In cases such as the above, there are legal common law remedies available which are known as Spoliation and Rei Vindicatio. We shall explain in more detail below and in which cases each remedy is to be used.

SPOLIATION

The definition of maxim spoliatus ante omnia restituendus est hereinafter known as (“mandament van spolie or Spoliation”) in our law is a common law remedy. “An action will thus lies, at the suit of anyone who has been deprived of possession, against anyone who has been guilty of that act of dispossession, even though he or she may in fact be the true owner. The court will not consider a plea of ownership until the spoliation has been set aside with all its consequences and the position reduced to the status quo before the spoliation.”

Examples of situations arising from the common law remedy of Mandament van spolie or Spoliation are situations wherein a landowner unlawfully takes the law into their own hands, no one is permitted to dispossess another forcibly or wrongfully by taking the law into their own hands.

Examples could be as follows: by disconnecting a tenants electricity or water or changing the locks which provide the tenant access to the property, all in an attempt to force payment for outstanding rental amounts on the rented immovable property.

A spoliation application can be applied for to Court by the tenant and the tenant may merely prove that the tenant’s possession of the leased property was unduly interfered with or disturbed, by proving 2 (two) requirements such as that they were in the peaceful and undisturbed possession, and, which they conceded to, and; that they were unlawfully deprived of such possession.

The effect of a spoliation order is that possession or services must be restored back to the former status thereby forcing the landowner to re-instate the water and electricity supply back to the tenant, however, this is not always the case nor should the remedy be presumed to be a sure. Each matter shall always be determinable based on the merits of it’s own case.

The entire process of spoliation is usually dealt with on an urgent basis and as such normally completed within a few days.

In the case of Blendrite (Pty) Ltd and Another v Moonisami and Another (Case no 227/2020) [2021] ZASCA 77 (10 June 2021). “The Supreme Court of Appeal traced the origins of spoliatory relief. The mandament van spolie requires only the factual proof of prior possession and the unlawful deprivation of possession, in other words without agreement or recourse to law. It is aimed at preventing self-help”

REI VINDICATIO

Rei Vindicatio is also aimed at the recovery of lost possession, but this remedy must not be confused with Spoliation.

Rei vindicatio is a legal action that allows the rightful owner of a property to reclaim possession of that property from someone who is unlawfully possessing or detaining it. The claimant (plaintiff) must prove that they have the right of ownership over the specific property in question, and that the defendant is wrongfully possessing it. Rei vindicatio is typically used when there is a dispute regarding ownership rights, and the plaintiff seeks to regain possession of the property rather than seeking compensation for damages.

In the case of an immovable property whereby the rightful owner wants to return the possession of the property to himself, the Rei Vindicatio takes the form of an eviction application

There are more defences that can be raised against a rei vindicatio application and generally the applications are much more detailed and time consuming than that of a spoliation application.

In closing, the above has highlighted the differences between a Spoliation remedy and Rei Vindicatio remedy. 

As mentioned above, each case should be assessed based on its own merits and its not always a clean cut case to use one of the above remedies. Contact our offices for legal assistance in your personal matter if it relates to the above.


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