 Welcome, everybody. Welcome, Liesl, to another great session and some legal questions and answers today. I will play out and put all the questions to Liesl and she will, with all her knowledge and experience, answer the questions to the base of her ability. Just for all of you out there that don't know myself and Liesl, I'm co-fundamenter from Fundamenter and Fundamenter Incorporated. We have offices in Johannesburg and Cape Town and we work very closely with Liesl and her firm, Hrevensteins. She'll tell you a bit about them. Why? We're brother and sister, so we enjoy working together Liesl. It's good seeing you again, even though you're in Port Elizabeth and I with you. Thank you, Cor. It's always my absolute pleasure and privilege to do something with you. We are so privileged to be able to enjoy the same things and to share this passion, especially for the property industry. So thank you for hosting it. You're always the base host, always can be trusted behind the scenes. Yes, I'm Liesl Hrevenstein from Hrevensteins Incorporated. We are a large conveyancing firm. We have, we service every sphere of the law, but I focus on conveyancing myself. We've got offices in Johannesburg, Cape Town, Port Elizabeth, and we've been around for 62 years this year. So it really is a privilege and an honour for me to be with you all. So I'm going to let you fire away with the questions, Cor. I think it's very nice when we have a Q&A session because it's questions that are asked by by state agents and property professionals. So one always wonders whether you're adding value and whether the topics that you cover are relevant to your audience. So it is wonderful answering your questions. So we've got some good questions here. Liesl, let's start with the first one. Something that's popped up quite a bit lately regarding capital gains tax. Can you clarify capital gains tax in respect of non-residents and that two million red claws in respect of non-residents having to declare something? I'm sure they're talking about withholding tax days. So if you can just elaborate and answer that question for us there, please. So two things are addressed in that question. The first being capital gains tax. But the person who's asking the question really has this alarm bell called withholding tax has sounded. So let's deal with the capital gains tax first. Remember, you buy capital gains tax in South Africa if you are disposing of an asset that is situated in the country. Whether you are a South African citizen, whether you are a South African resident or a non-resident does really matter. That disposal triggers capital gains tax regardless of whether you are in fact a registered taxpayer in South Africa or not. So it goes without saying that if you are a non-resident who sells property in South Africa, you cannot claim that two million grand primary residence exclusion because you are not ordinarily resident in the country, which means it can never be your primary residence that you are selling. So most definitely the seller there will face capital gains tax liability. But in addition to that, SAAS of course want to ensure that if you are liable for capital gains tax and you are not a South African resident, they don't want to go to the trouble of finding you wherever you are in the world. So they introduced what is called withholding tax, which means that if you are a non-resident and you sell property in South Africa and you sell that for more than two million grand, you have to have a certain percentage of your net proceeds retained withheld. For natural persons that percentage is seven and a half percent. So if you are non-resident, you sell property with a selling price in excess of two million grand, seven point five percent of your proceeds must be withheld until such time as you can prove that there is no capital gains tax liability. So that is our source will ensure that a certain portion of your proceeds can be withheld until such time as you can prove that there is no liability on that individual to pay capital gains tax. If you can just answer the result quickly just a second, but whose responsibility is that to withhold the tax that that foreigner has to pay. So estate agents will be interested to know that you fall squarely within the ambit of one of those responsible authorities, but generally speaking obviously the onus is on the conveyancer. So the conveyancer must immediately realize that when a non-resident sells for more than two million grand that they will be withholding tax. If the tax is not withheld and there is a responsibility on the seller or the non-resident to pay withholding tax or to pay capital gains tax, source will come looking for the conveyancer. So you suggest it's imperative that estate agents inform the sellers if they're non-residents of this withholding tax. Absolutely, because source might just choose to rather go after the estate agent, which they are able to do in terms of legislation. Okay, next question. I have a seller who is married according to the laws of Taiwan or any other country in the world. She is the sole registered owner of the fixed property. She lives in Ketang, but her husband lives in Taiwan. What do I need to tell her regarding the signature of these transfer documents? So it also addresses quite a couple of issues. This question, first and foremost, it is wonderful when estate agents realize that right at the outset of a particular transaction that there's something that needs to be done. You might not always know exactly what it is or what steps to follow, but the moment the question is asked, you can at least get the right advice and prevent these enormous delays that occur when estate agents don't advise their clients correctly up front. It's so embarrassing when those clients come to sign transfer documents that our officers and I know call you experience the same and you have to inform them of something that could have been done a month or two ago when the actual OTP was signed. So hats off to this particular estate agent for asking the question. First of all, in South Africa, if you are married according to the laws of a foreign country, you can understand and appreciate the fact that the deeds office will need to protect the rights, the matrimonial property rights of these spouses that may not even be in the country. So for that reason, if you are married according to the laws of a foreign country, you can acquire rights. In other words, you can purchase property if it's a cash transaction, but you cannot alienate those rights. In other words, bond the property or sell the property without the consent of your spouse. Now that consent basically means that that spouse to whom this Taiwanese lady is married must sign transfer documents. Now because those transfer documents are signed abroad and they are necessary for use inside of the Republic of South Africa. There are certain steps that need to be followed and those steps can be found in rule 63 of the High Court rules. Basically has to do with authentication of signatures because how is the deeds office going to know or the conveyance for that matter in South Africa, I will hear or she know that those documents were in fact signed by that spouse that is sitting in Taiwan if we don't have a strict procedure in place to authenticate his signature or to validate his signature. So generally speaking, once again, you would have to send a part of attorney by email to the spouse who is sitting in Taiwan. That spouse will have to visit the embassy or the consulate or for some other countries will just have to consult a notary and the notary or the consulate depending on which official is involved here will then authenticate his signature. The original will then come back to South Africa and that will then be used or will be used for lodgement purposes at the deeds office. If you can just quickly these on that just elaborate on the convention and the up or still that we use for some countries. And also the second part of the question just suggest some tips that the estate agents can use to speed up this process by warning the sellers or purchases, whichever the case may be. So let me just start with the second your second part of the question core because speed is everything. We all know that in this game you snooze you lose. So clients get highly irritated when we don't advise them properly right at the outset. So how do we speed this up? The first thing is when you're dealing with a client, when you do your listing presentation and you establish the the marital regime applicable to your client, when you know that there's a spouse that is sitting abroad who is going to have to sign documents contact the conveyance immediately so that we can draft a power of attorney right there and then and email it to the client because it takes weeks sometimes months for them to get an appointment with a notary or at the embassy. So how to speed it up is to make sure that you are switched on so that you advise your client right at the outset when you do that that listing presentation. And secondly to elaborate a little bit on the Hague Convention there are certain countries in the world who are signatories to the Hague Convention. It's basically a kind of a treaty that has been signed by several countries if your country South Africa is a is a signatory to the Hague Convention. So if your country is a signatory to the Hague Convention we just attach what we call an apostille to that power of attorney and a notary or anybody can sign anybody charged with authentication of documents can then sign that. If your country is not a signatory to the Hague Convention you have to follow the the embassy steps in other words you have to make an appointment at the embassy and some countries have further rules and regulations that will involve the High Court for example. So it's definitely easier if that particular country is a signatory to the Hague Convention. So you would suggest with COVID in some countries going through lockdowns especially countries like China USA is open for state agents to inform sellers exactly regarding the process going forward and the delay. Absolutely. Especially when there are link transfers when it's subject to sale and all of that. For sure because it will impact your deal. So the best is to contact the convencer right at the outset and get the convencer to establish whether that particular country is a signatory to the Hague Convention and if not what steps should then be followed. Okay next question. I wonder if it would be possible just to discuss the negative aspects regarding purchasing a property in a business's name. We are getting queries from clients that insist on buying property in a business's name but that does not normally make sense. Can you just please inform us of the negative aspects and what you would suggest going forward what to tell clients that really want to buy that property in the business's name. So I know exactly why this question is asked and structured in such a way that the person is asking the question is actually wanting me to just highlight the negative aspects. What Yoshi is referring to as a business I think they mean a legal entity. In other words a trust a company or a close corporation. Usually when agents encounter buyers who want to buy in a legal entity they want to advise them not to do so because we are not always comfortable with the terminology and the legal aspects when it comes to these business entities. There's absolutely no reason to be afraid or to be uncomfortable. I'm going to first of all highlight the positive score because I think it's very important that we as estate agents don't just go out and say to clients it's not advisable to buy in a legal entity. Yes there are negative aspects especially when it comes to capital gain stacks but there are many positives as well and for you to simply say that it's not advisable or not beneficial means that you don't understand the positive aspects around that. So let's look at the advantages first. When you buy something in a legal entity it does not form part of your personal estate. Now we all know that if your personal estate exceeds three and a half million runs in net value when you die 20% of that excess is paid to source as estate duty. So you can imagine that the wealthy would most certainly be looking at buying property in a separate legal entity so as to keep their net value of their estate under the 3.5 million runs threshold. So you can definitely not say to a client that it's not advisable. There are many clients who already have the net asset value in their estate exceed 3.5 million runs so that's the one advantage. The second advantage also has to do with the fact that it doesn't form part of your personal estate and that lies in the fact that if there is a sequestration for example of an individual assets that are held by that individual and I'm using that term loosely but assets that are controlled by that individual in a separate legal entity do not form part of his personal estate. So it cannot be attached by creditors for example. So it is a good way of safeguarding family assets against a sequestration in your personal capacity. So there definitely are very valid reasons for wanting to buy property in a separate legal entity. The one disadvantage is that when you sell that property you cannot make use of the 2 million runs primary residence exclusion because a legal entity cannot own a primary residence and also the inclusion rate for capital gains tax is 80% versus 40% if it's in your personal capacity. So in other words for a trust a company or a close corporation 80% of the gain is added to the taxable income for that particular legal entity for that year of assessment. So that is the advantage you don't you can't make use of the 2 million runs primary residence exclusion and the inclusion rate is 80% versus the 40% for a private individual. And surety leasel when you sign documents we all sign for all the banks and all of that surety the most banks require surety from the director share all those members or trustees. Yes so estate agents often get confused and not just estate agents clients in general don't often realize that we buy in the name of a trust for example if you are a man married in community of property you cannot bind your personal capacity without involving your spouse but if you act on behalf of a trust in your capacity as a trustee you don't need the assistance of your spouse because you are acting in an official capacity you're not binding the joint estate but the banks will 99,99% of the time require personal surety ships to be signed by the trustees if we're looking at a trust that means that every trustee must in his personal capacity sign surety that in turn means that the spouse will have to consent or be a part of that personal surety because now you're in fact binding the joint estate. And just lastly on this question leasel they will move on if they act to apply in the business's name in your experience also when you're signing these documents are the banks requiring deposits if it's in the business's name or they're giving 100% bonds? Look it all depends on the jockey we always say 100% bond for a trust is certainly not impossible but it will all depend on the financials are they up to date audited financials for that particular legal entity can you prove affordability all of those things will play a role has the entity been trading or is it basically just a shell with no other assets? So the banks will look at all of that and it's certainly not as easy as to just look at a salaried employee as a private individual and to prove affordability so absolutely possible but definitely more onerous. Good thank you on that okay next question a client is asking me what happens if someone dies and they don't have a will she has been told that the bank will take the property and the master of the I court will have the right to sell it and service all the creditors. Okay so when you die without a will in South Africa we've just had wills week so when you die without a will somebody should have given you a slap I think during your lifetime because wills are drafted for free and it is the one thing I think in life one of very few that is still that is still drafted for you for free but if you die without a will we call your estate an interstate estate so in other words without the directives that are given in the will by the testator certain other rules must come into play and those rules are found in the interstate succession act so we actually have an act that governs all of this so there's certainly no truth to the rumor that the bank will take your assets and the master will just simply sell it but there is a big proviso. Remember if you have made use of bond financing when you purchased that home during your lifetime the bank in any event has security the bank is a secured creditor so no matter whether you're alive or dead if the bond instruments are not serviced or paid every month the bank has all the right to foreclose and to sell that property in execution to settle the debt so that's not a new thing and that is that doesn't come into play only when you die that's always been the case so if there is of this person who died interstate without a will if those is can't service the bond or the surviving spouse for example can't service the bond the bank will foreclose as they would have if the person was still alive and simply just didn't pay his bond now the master of the high court is the body that governs all deceased estates and also insolvent estates so the master's involvement will always be there when you die whether it was with the will or without the will the master is involved so the master will then appoint an executor on advice or on nomination by the heirs usually and that executor will be the person who will have to wind up the estate will have to wind up the estate and who will have to report to the master on an ongoing basis until the estate has been successfully wound up i know you guys also do a lot of estates and estate transfers in pe k-town these also if you can maybe just inform the agents also that are all online now regarding the problems that they currently are the department of justice and the master of the high court and delays that we are experiencing at the moment regarding estate transfers i know it's a big problem so so the master's office nationwide has become the lightest victim of what do you call it core when you in the hacking hacking or well ransomware that's what you call it so there's been many rumors going around some ranging from an amount of 33 billion dollars that have been climbed as as ransomware to release all this information i actually read a letter that was issued by the department of justice on thursday last week where that has been denied apparently no money has been has been requested no ransom so nobody knows bottom line is the master's office has been offline for the last couple of weeks and the end is certainly not in sight now what this means for you as estate agents is any one of your deals is linked to an estate transfer or to a deal where property has been sold out of an estate we are now stuck because remember if property is sold from an estate the master has to consent to that sale and that happens by way of an endorsement a stamp that is actually brought onto the power of attorney which is the master must stamp the power of attorney for the conveyance before that deal can proceed so you can only imagine the frustration that is currently experienced because there are just so many deals who are just hanging banks are of course keeping a keen eye on the situation because we all know that the bank reserves the right to reassess your credit position just before enlargement so with all these delays and people being being affected by lockdown and just the economy as a whole a lot can happen when your deal is delayed by three to six months even longer so it does affect all of us so you'd suggest that agents out there keep up to date with what's going on going on to your website and also just speaking to the conveyance as a whole even if it's not Ravensteins or von Dieventus just to follow up and keep purchases up to date absolutely because if you're not going to to lead your purchaser I mean the worst thing for me is when you know that you're dealing with a buyer who has to take occupation by a certain date and now all of a sudden there's an estate involved the seller is a deceased estate for example and the buyer has absolutely no idea that this transfer is going to take in excess of six months for example he is going to be furious when the conveyance explains to him that this could have been prevented if the estate agent had just kept him informed and it's not because the estate agent doesn't want to to keep his client informed it's sometimes just the fact that we are that we ourselves don't stay up to date with with the current happenings and goings on stay keep staying in or being informed so the next question we've got here is on our sellers who are married in community of property the wife is in a frail care facility and has Alzheimer's that is and at an advanced stage she signed a power of attorney in favor of her husband years before she got sick the agent now has an offer on this property which the husband has accepted what should I tell my buyers about delays and how long should they make they offer irrevocable and open for acceptance I think the first one to deal with is the power of attorney and what you know while you're reading that question I'm thinking of so many estate agents who who are facing this exact problem now the first and probably most important point to make here is when somebody signs a power of attorney granting somebody else the power or the authorization to sign on their behalf that person must be lucid and must obviously understand what it is that they are signing so that that is perfectly understandable what many agents still don't realize is that when you want to execute on that power of attorney in other words when the husband now years after the wife giving him power of attorney if he now wants to sign transfer documents on her behalf and she has Alzheimer's at an advanced stage and she is no longer lucid he cannot use that power of attorney that power of attorney is invalid if the person who granted you the right to sign on his or her behalf is no longer lucid so that's a very important point for all of us to understand many clients still come to us on a daily basis and I'm convinced that you have the same core where they say to us my parents are getting old they are moving into a frail care facility I want you to please draft a power of attorney so that I am able to sign documents on my parents behalf should they no longer have the capacity to enter into contracts or the capacity to act to act in general and then we have to explain to them we can draft that power of attorney which your parents can sign now if they are lucid but the minute they are no longer they no longer have the capacity to contract or to act you cannot use that power of attorney use of that power of attorney at that stage will be unlawful so that's the first important point if you now get into a situation where the parents now have to the the husband was still looking after the wife look what I did there the husband was taking care of the wife and now he also needs to move into a frail care facility if that is the case and they now have to sell their home because obviously what do they live often this is what what clients say to us all the time we simply cannot afford to to maintain our parents and to provide for them so we have to sell their house for them to have money to pay for their monthly experiences at the frail care facility and unfortunately the law doesn't look at the facts and it doesn't take into account the level of desperation what must happen is the children or the family members will have to approach an attorney in order to get what we call a curator appointed for that particular person who can no longer act so whether there is a power of attorney that was signed or whether there's absolutely no power of attorney doesn't matter a curator needs to be appointed and only the high court can appoint a curator with the assistance of the involvement of the master but the high court appoints a curator and that process must be driven by the family costs anywhere between 30 and 50 000 rand and takes anywhere between three and six months for that curator to be appointed so once again look at what the situation is remember what we discussed here and then approach your attorneys or or anybody else to assist you then the last question is we'll be running out of time so it's gone so quickly let's see am i biased i've signed transfer and bond documents and it has only now come to light that the international contract was never registered by the attorneys or the notaries at that stage is this a problem and how do they solve it okay so yes it is a problem in our country you are only married out of community of property if an anti-nuptial contract was executed or signed in the presence of a notary and registered in a deeds office now the the problem is we call it an anti-nuptial contract like anti-natal clauses it is before an event you cannot just simply enter into a post-nuptial contract and have that enforceable the anti-nuptial contract must be signed before you actually got married even if it seconds before so if you realize that the anti-nuptial contract was not registered and now you're already married you are married in community of property so what must happen under these circumstances is the notary was responsible to have your anti-nuptial contract registered must now apply to the high court on your behalf to have the the contract registered post-nuptial so in other words it's it'll be easy to prove what the terms of that agreement were because the the agreement was signed the intention between the parties are clear between the spouses it was just not registered in the deeds office so one must then apply to the high court for an order granting the deeds office the authority to register that contract that you signed before you got married to register that after after the marriage again high court application you are looking at again between 30 and 50 000 ran but obviously the notary who was or the conveyance who was responsible for the registration of that anti-nuptial contract will have to come to the party can you just discuss the credit disconsent also in this application is i think it's quite important especially if they were married in community of property and i want to change the matrimonial property system so that is why you have to advertise before this order can be granted because you must be able to show that no creditors will be prejudiced because remember it is easy for somebody who owes a lot of money lets again use the wife as the example if the wife for example owes a lot of money and creditors were under the impression that she was married to her husband in community of property meaning that the the joint estate would be liable for for all these for all this credit or all this debt to now go and just simply apply if it was easy to just apply to have this anti-nuptial contract registered post-nuptially that would prejudice creditors because they were under the impression that no anti-nuptial contract was registered so she's married in community of property now she wants to argue that her husband cannot be held liable because they are married out of community of property so it's just a simple illustration of how creditors could be prejudiced and why it is necessary to in your application show that you have advertised and that creditors don't object so i'm sure to use note please that won't forget to register your anti-nuptial contract i'm just going to throw this last question in just a little we've come across this quite a bit that i'm sure you also on that side um where sellers are in the process of getting divorced or purchasing on on the flip side and that's come across so many times again um i spend wife on the process of getting divorced and they want to sell or they in the process and they want to their wife wants to purchase a property um to move out of the marital loan i think the second example is probably more prevalent core because we often have a situation where spouses seem to be ex-spaces the one needs to leave the the common home and for that purpose he or she will obviously want to secure alternative accommodation by purchasing property now if you are married out of community of property without the accrual system being applicable and your uh divorce settlement agreement has been signed nothing really stands in your way because you have full contractual capacity without the assistance of your spouse because you are married out of community of property and you can basically if you need bond financing you need to show affordability etc etc but you can carry on the problem comes in where these spouses are still married to each other in community of property i always remind agents that in south africa we don't um we don't acknowledge legal separation there's no such thing i know um people still a lepros fund fund betentafel huskay and they haven't been living together for the last 10 15 years without a divorce order you are still married which means if there was no anti-nuptial contract you are still married in community of property that means it is impossible for you to purchase property whilst still married in community of property because there is still one joint estate that um hasn't been dissolved so under those circumstances if there's a family member sometimes a parent who has a trust or a separate legal entity um once again that creates a great opportunity for this spouse who is in the process of getting divorced to buy property if there is this the separate legal entity because um she doesn't need the involvement of the spouse or he doesn't need the involvement of the spouse to whom he's married in community of property this last release i know this question also comes up the sailors if the husband wife when the process of getting divorced we get this as well how do you as the conveyance ensure that those payments are done according to the divorce order or according to some spouses always say they scared the husband's going to take 100 percent of the proceeds and then leave the country i would use the conveyance and what do they sign with you um documents that they sign with you to ensure that it's paid into the correct accounts so we will never pay out not even occupational rent we will never pay make payment of any sum of money without a signed authority to pay in other words both spouses if they both own the home they co-owners both of them must sign an authority to pay indicating the bank account they want to receive the proceeds in etc etc if there's a court order or a sign settlement agreement of course it makes it a little bit easier because then you can verify that you can verify the intention of the parties but in the absence of a court order both owners must sign an authority to pay and they must clearly identify the bank account into which they will accept payment thanks for a great station easel it's gone very quickly the time unfortunately the time is limited i'm sure myself and you can spend hours chatting like this and and answering questions it's always fun being with you online i really enjoy it from myself or from the event to everybody out there thank you for for being online and and listening i always say knowledge is power so go out use this knowledge and and have a fantastic end of the year we're almost there it's crazy to think about that but what you do now well we'll set up your your next year in 2022 so thank you from fundiameter fundiameter and leisal over to you no just it's been great course thank you very much and well done to each and everybody who has been listening to these training sessions and webinars i couldn't agree more with you call knowledge is power and it also gives us that confidence that that we that we need because it's such a such a competitive environment that we all operate in and if you're not going to know a little bit more than the person next to you well that's a choice so well done to each and everybody for listening and it's been an absolute pleasure thank you call for us thank you leisal and thank you everybody out there we really appreciate it