 Good morning, everyone, and welcome to our online guest joining us today. I am Michelle Remdin from EPSA Home Loans. Please do let me know if you can hear clearly and give us a thumbs up in the chat. That would be most useful. So as you know, every week, EPSA Home Loans has an opportunity to host webinars with private property. And in this slot, we use the time to chat and educate and empower our public, as well as our stakeholders on property-related matters, banking, and financial literacy. Some of you may recall towards the end of July, we did a slot where we touched on some of the biggest frustrations faced by sellers and property practitioners when it comes to the transfer process, especially the costs associated with the transfer, understanding the guarantees process, as well as cancellations. And we had the opportunity to collaborate with one of our panel attorneys, Co-Fundiawanta from Fundiawanta and Fundiawanta. So joining me today, again, we've invited Co, who will be speaking to us about estate transfers, some of the delays that we currently experiencing in this area, as well as touching on some of the uncommon delays that can affect the registration process. So welcome, Co, and thank you for joining us today. Good morning, Michelle, and thank you once again for giving us the opportunity to have a chat and to have a chat to all the property practitioners out there firstly. Welcome to all of those of you viewing online. It's good seeing you again, as Michelle said. I'm Co, from Fundiawanta and Fundiawanta attorneys, proudly associated with EPSA. Love working with Michelle and the team, and all the team from EPSA. So thank you for this initiative, Michelle. It is always good. And the response the last time has been really good. And the feedback that we've had. So as I've said, private property will put our email addresses and everything at the bottom. If there are questions during this presentation, please feel free to answer in the public comments. And I will answer them very gladly for you. And also, as you go along during the week, I'm always there to answer your questions. So welcome, and thank you to EPSA, Michelle, and private property for once again, for giving us this opportunity. Wonderful, wonderful, Co. Really looking forward and excited to the chat today. So just to set some context, many of you or some of you may have heard of a ransomware attack on the Department of Justice during September this year. And what has actually happened is this has led to a complete shutdown of their systems, which is causing a massive backlog on the state transfers. As you can imagine, this is causing extreme frustration. And a lot of people are becoming upset with the delays caused by this development. Just put yourself in the position of a surviving spouse that's waiting for the proceeds of a sale, or executives that are needing to finalize an estate and purchases wanting to move into their new properties, not forgetting our property practitioners that are awaiting the commissions that are due to them. So I think, Co, maybe if you can perhaps give us an update on the developments here, and what is the way forward, Co? So, Michelle, as we discussed earlier, on the 5th of September of this year, the Department of Justice's all systems were hacked through ransomware. They were hacked, basically. At first, they denied it and said everything was under control. But as the week went on and queries started coming up, we heard about some problems coming through. And I'm sure, viewing now, there's a lot of property practitioners that would have some estate transfers. And where the backlog started coming in, and we were querying what was going on. They then finally admitted, yes, that they were hacked. And then an urgent meeting was held with the chief master. So for the viewers out there, they've got to understand that the master of the court is not just one person. It is a big institution where every high court in every province has a master of the high court's office. And they are responsible for various tasks, what we'll get to just now. But a big meeting was held with all the attorneys' associations, FISA, which is the Judiciary Institution of South Africa, the chief master, and various master's offices. They had that online where it was brought to their attention that there are huge delays in terms of the issuing of letters of executive trust and all of those. And what the way forward was going to be. What was proposed at that meeting was that the master of the high court, at every high court in that sense then, would be allowed to issue all these letters of executive trust amendments of trust and all of those manually. But that was out of hand, flatly rejected by the chief master and also all the other masters of the high court, because they said it would be opening up the whole estate transfer process and also liquidation and distribution accounts to a whole fraud liability in that sense. And that was rejected out of hand. What some of these attorney associations and all of them have said then, on the 6th of October, another meeting was held where the problems were clarified. There was no end in sight to what was being done. Or that the IT department of every of the Department of Justice could say that they were busy working on the issues, not when it would be resolved or when it would be cleared up, this whole backlog. And where the attorneys associations have then said they're going to bring a mandamus application to the high court to force every master's office to issue these letters of executive trust and all of that. If not, they'll bring the application and the high court will then have to decide on what the outcome of that is. No application as of yet has been brought by any association. I mean, these applications, it's also not drafted within a day or two, so I'm sure that everybody in the background is basically collaborating and working on it. But as we stand, the Deputy Minister of Justice, they said that they will follow the advice of the Chief Master. The Chief Master, as I've mentioned earlier on, has clearly indicated that they are not willing to do any of these applications and issuing of letters manually dead end, as we currently stand, which is causing tremendous delays in property transaction and estate. So for those of us, the property practitioners online, we'll discuss it now as we go along, but it is causing frustration for everybody in the show. That is a significant impact on property transfers. I mean, as you can imagine, it's gonna have a massive impact right from the beginning. So anyone that's looking to start up and create a trust or to do a trust amendment, even the issuing of a letter of authority, given the massive backlog and the time delays, this is really gonna impact directly impact on property transfers, Ko. So Michelle, yes, definitely. And we often find that where purchases, especially cash purchases, that have the capital available and are doing a lot of estate planning, going forward for reasons of estate duty, for reasons of capital gains tax, or for reasons of just protecting their assets, they would like to buy assets, whether it's holiday home, a second home or a new home, they would like to buy that into a trust. Now, firstly, the problem is being created that in terms of the trust act, you cannot buy on behalf of a trust to be formed. So firstly, that trust needs to be formed first, going through the old paperwork application process, drafting the trust deed, who the trustees are, who the beneficiaries are, getting all that paperwork to the master of the court, submitting it, and then waiting, as you correctly said, waiting for the letters of authority to be issued. In other words, which trustees are allowed to act on behalf of that trust? Are you once that trust deed has been registered and the letters of authority has been issued by the master of the court? Is that trust, has that trust been created? And can any of those trustees only act then on behalf of that trust? Now, the timelines that have been mentioned and that I've seen is it can take anything between six to 12 months for this process to be resolved. That's a long time. Trust to be registered and also then for the letters of authority to be issued. So any, my advice to any property practitioner out there that is online, that is listening to us now is clarify this position with your purchase where he's looking at buying on behalf of a trust to be formed, inform them of what the process is. And then secondly, what the delay is, you would not want to sign an offer to purchase or now or thought looking for properties knowing fully well that it's gonna be on behalf of a trust to be formed and it's gonna take six to 12 months for that trust to be created. It will cause frustrations with the property practitioner because a deal is happening, but it's not going forward. It's stuck. Your seller in his mind, there's been an expectation created that the property sold but in fact, it has not been. And secondly, that the poor purchase so that there is waiting months and months and months for that trust to be created. So stressful all around. Property practitioners must take note of the delays and then inform all the parties and they can make an informed decision after listening or hearing about all these problems that may arise. Yeah, I think that's spot on point and good advice for property professionals when dealing with estate transfers, especially on what to inform the parties involved so that you can manage the expectations upfront. Yeah, it's shocking to hear that it will take between six and 12 months for this backlog to be sorted and for the systems to start running again and it's going, it really is going to impact all parties involved. So thanks for that advice, Ko. Okay. You know, I think touching on then the topic of estate transfers, maybe just explain to some of us, what is exactly an estate transfer? What does it entail? And then the different processes that one can follow for these estate transfers. Okay, so firstly, as you said, there are various ways in which people can inherit their property. It's either in terms of a will, in other words, the deceased person has left behind a valid will that has been signed and has been witnessed by all people. That is, there's also a lot of formalities that any party has to go through when drafting a will and that us as the attorneys or the executive will have to look whether in fact that will is valid. So if there is a valid will, firstly, obviously that will, with the death notice, with the register of assets, will have to be reported to the master of the high court. They will have to look at whether all these documents are in place. If everything's in place, all those documents are in place, you can imagine there's a lot of formalities and forms that have to be filled in. If it's all been accepted by the master during normal times, the master will then issue a letter of executive ship. Now that executive is appointed in the will where the deceased person would have appointed sometimes at least brother, but I know you guys at AppSuppress do a tremendous job in terms of managing your wills and all of that. So if AppSuppress has been nominated as the executive, you guys will then be issued with a letter of executive ship where a person that works for AppSuppress will then be able to act on behalf of that trust. So we normally say that executive then steps into the shoes of the deceased or deceased person. So he will manage their face of that estate thing on behalf of the deceased estate. Now there's various processes that it has to go through, but once everything has happened and he's been appointed, the master will then issue a letter of executive ship where that person can then act on behalf of that. There are then various processes that they have to also follow if a property is being sold out of the estate. The one issue that we can sit with Michelle is where the deceased person is the purchaser, where the husband and wife might have been married, he's a community of property. They have put an offer in wanting to buy the property. It causes confusion and also in most cases, then the executor would not want to proceed with that estate because the executor's job is to liquidate and distribute all the assets. Not to take on extra debt or anything on behalf of the estate. So in most cases, unfortunately, where the purchaser is deceased for any reason, that property transaction that offered to purchase will in most cases fall flat because the executor would just not want to proceed on it. On the other side is where the deceased has passed away, is a state would obviously that 50% that he was going to sell would fall into the estate and the executor will have to sign on behalf of the estate. So the problem now comes in, when can that executor sign and verify that offered to purchase on behalf of where the seller's part is the deceased estate? Only once that letter of executorship has been issued. So look out for that. And I think you're touching on something really important and that is the importance of having a valid will in place. And like you said, APSA trust has a phenomenal job in terms of supporting from this aspect, but maybe just touch on the differences between a deceased having a will and not having leaving a will and what are some of the implications there? Very important. To all the viewers make sure that you have a valid will that is up to date. It makes it so much easier. So in that process, as we discussed earlier, Michel, it goes through the process that gets reported to the master. That will is deemed the final wish of that deceased estate and it's pretty not straightforward, but we can manage that because we have to act in terms of the will. The way people that are deceased passed away and they do not leave a will or a valid will behind, that person will be deemed to have passed away into state, which means there's no valid will in place into state. And then we have to go back, look at what the value of the estate is. If the value of the estate is above 250,000 Reins, there's one process that we'll go through now. If it is below 250,000 Reins, the master will appoint somebody from the master's office actually to manage their affairs of that person, which inevitably means you almost take the power away from your heirs. They won't have anything to say because the master will finalize that on behalf of that estate. If the value of the estate is above 250,000 Reins, firstly, we calculated according to style piece, it goes into various how many kids there are and the wife and all of that. It is called inheriting a child's portion where we do calculations and the wife can get a minimum of 250,000 Reins or a child's portion, whichever is the greater. But then the calculation goes in where there might be extramarital children, the mother of the deceased, the wife, how many kids there are, which becomes an extremely complex calculation, leaving maybe children that you did not want to include in the world where they might have been divorced for some other reason, also not in terms of the world where your wishes are not being adhered to. So it's complex, firstly, it's being taken out of your hands and administrators being appointed if it's above 250,000 Reins and they will then have to deal with all these issues and do all these calculations where your wife or your kids might be inheriting much less than what your original intentions were. So on the one side, you have the world, look at that. On the other side, it's called interstate succession, which is complex and can take a long time for that estate to be finalized. And these are all of the information that property practitioners should be aware of and take into consideration when dealing with clients and just be informed in terms of giving them these updates. So thank you so much for that call. I think just moving on from estate transfers, something that we've been picking up recently is another frustrating part of a property transfer is shortfalls on cancellations. So where there's not enough funds to cancel the bond, one would think that you would do all your homework up front and make sure that you have sufficient funds to cancel. But I think now with the TERS payments are no longer available, sellers are under a lot of pressure and can you maybe just speak to us in terms of what are some of the processes with dealing with these matters where there's a shortfall on a cancellation? Michelle, yes, correct. As we've seen now that the last few months because of sellers being under extra bit of pressure, all these government assistance programs that they were having being stopped now, we're finding shortfall matters because people, these payment holidays were also finished that all the banks had. So as we're finding properties that are being sold, we're finding more and more shortfall matters coming through. So as we discussed and I'm not going into that again with our first one that we did, I think you said end of July, was for property practitioners out there to do a proper financial analysis of that seller looking what the shortfall is. And if they're finding that there is a shortfall, it is not the end of the world. It can still be sorted out. But the process firstly is once the offer to purchase comes from the agency to fund the event this, we will contact the bond cancellation attorneys where that seller's bond is currently held. They issue us with cancellation figures. We then see that there's a shortfall. If the property practitioner seller had a good conversation, they would obviously know there's a shortfall. So they would be expecting an amount to come out that there's a shortfall at the end of the day, which then makes it much easier for us. Because firstly, once we have those cancellation figures, we can then speak to the seller requesting him or requesting that he will sign an acknowledgement of debt. But it's not so easy that cancellation attorneys on behalf of if absent bank is the bank where the seller's bond was currently held. We'll have to issue us with what the requirements are of the acknowledgement of debt, what the payments are for the acknowledgement of debt. We then also have to go calculate, we'll chat about that now as well, is the rights that will be in areas. If there are areas, look at what the ladies are in areas. If there's not sufficient or the seller in this case must probably would not have sufficient funds to pay for the rights, which they have to pay for upfront or to pay for the ladies, which they have to pay the areas plus the one month upfront for ladies, for rights and taxes, depending what province could be three months that they have to pay that upfront. If there's not sufficient funds, we then have to go calculate what the full levy areas are, that is issued by the managing agents or the body corporate, and also what the full rights and taxes are that is owed to whichever municipality that property might be in. That money then we have to bridge. So we also have to make provision for bridging that those funds plus the interest that the bridging company will be asking. So all those figures then we have to go back to the cancellation attorneys, give it to them, they will then give that to legal and to credit and it has to go through a process there where people have to sign off on shortfalls, sign off on whatever money to have to be paid to the municipality, to the managing agents or whatever that case may be. Absolutely. Thank goodness. They've been very, very good and very efficient on that. We had issues with them. There can be issues for other reasons that it might take longer at legal with whichever bank it is. My suggestion to the property practitioners out there, speak to your transferring attorney and they will then notify you what the holdup is with the cancellation attorney, which you can go back to explaining to your seller and to your purchaser what the holdup is, what the process is going forward, because we're finding now that it can take anything between two to three to four months on shortfall matters for that to be finalized and signed off. In the meantime, we might have received the cancellation figures, gotten the figures, but those figures, as we all know, it's only valid for 90 days. So if we're waiting on a shortfall matter on the cancellation figures that delays the whole process on that side again, because why? We have to apply for new cancellation figures through the cancellation attorneys and they have to give us in between that the seller might have stopped paying again for the next two or three months so you can see how that whole process is being snowballed and snowballed. Where rates are expiring, levies are expiring, my advice is to the property practitioners, please, if it's a shortfall matter, stay up to date almost twice a week on what is happening. Sometimes the conveyances might not be able to give you an answer, but they're waiting, but at least ask what is being done to try and resolve it and keeping your sellers and your purchases informed during the whole process can be very frustrating. I'm sure, and you're highlighting such an important aspect and that is for the property practitioner to work very closely with the transferring attorney and to make sure that you keep yourself updated, keep the transferring attorney updated so that the process can go as smooth as possible. Koa, I'm just in the interest of time, I just would like you to maybe just touch on the rates issues that you spoke about during the shortfall conversation and then we can wrap it up from there. Thanks Koa. Funny how quickly it goes. I know it does. So many important issues and how much we can still chat about, but a big thing, Michelle, and I think up in Johannesburg that we have found, depending on, I'm sure, property practitioners, whether it's in Durban, Bloomfontaine, sitting with the same properties, what we're finding now is lots of sellers, because of them being under stress, trying to save on electricity and all of that, they've bypassed electricity meters for some reason or tampered with these meters and where it runs slower than what it normally does. When the municipality then issues us with, or informs us that they're not going to issue a rates clearance figures because of meter being tampered with, what happens now is the municipality where the city power, or the city of Johannesburg insists that a new electricity prepaid electricity meter is being installed. That meter now has to run for three months. So this, the opportunity purchase might be signed. We are applying for rates figures, bonds being approved, everything done. Now you can imagine in that purchase or seller's mind, this transaction is proceeding and then everything's fine and up to date. Then we hear from the municipality the rates of the electricity meters have been tampered with. Please have a new one installed and that doesn't happen overnight. Have a new one installed. That meter now has to run for three months to enable the municipality then to get an average consumption figure which they will then use whether that meter has been tampered for one year, two years, that the municipality decides plus the penalty that that seller has to pay. You can see three, four months before we didn't even get rates figures and being able to issue that to the seller to pay and paying that and then obtaining that rates clearance certificate. In the meantime, once again, as I was saying, cancellation figures might have expired, levy figures might have expired, making it extremely frustrating for the purchase. Because in his mind, what was it taking so long? And trying to explain to you that we're waiting for rates figures and it's taking one month, two months, three months, four months to get these figures. The same with the property practitioner they make sure, speak to your seller, look at the meters, nothing's being tampered with because it's going to cause a delay of anything, Michelle, between three and five months now if that meter has been tampered with. Just on the last one or that it's not just electricity meters. We have been finding, especially in finding in the south of Janisburg, people at bypassed water meters or no water meters have been installed for water consumption. The same thing applies as it does to electricity meters. The municipality says they can't pick up a water reading. There's no meter there for them to come take a reading with if they physically go out. What did they say? Installed a new meter, have it run for three months. They will take an average reading and only then can we calculate what you have to pay for your water. So it's not us delaying it. It's not the seller delaying it. Sometimes the seller knows they've bypassed, but the poor purchaser is the one year that is extremely frustrated because his bonds approved in his mind. He can move on, move in any month now, and this is causing huge delays and frustrations with everybody involved during the whole process. Yeah, sure. We can spend an entire day just chatting about this aspect itself. There's so much that goes on in terms of getting proper reads, clearances and the behind the scenes what's happening with the meter tampering, etc. But I think we're going to have to leave it here for now and wrap up the session. Thank you so much once again for joining us on this platform, sharing advice and guidance. The more agents understand some of the issues that can crop up during the transfer process, the better you will be able to manage the process. So please post on the chat any other topics you would like us to discuss. We would gladly collaborate again in the future and answer all of those burning questions that you may have. Thank you so much. Good, Michelle. It was good chatting to you and good seeing you and have a good October month out there to all our proper professionals. And thank you to EPSA once again and private property, Michelle. Thank you. We really appreciate it. Thank you, Koa. Thank you. Keep well. Bye. Bye.