“COURT WARNS DEVELOPERS NOT TO RELY ON LOCAL AUTHORITIES TO KNOW THE CORRECT ZONNING OF THEIR PROPERTY”:

INDEMNIFICATION OF MUNICIPALITES AGAINST LIABLITY

Historically municipalities were indemnified against liability for negligent omissions (failure to perform a duty that is legally due). However, one merely has to look at our case law to see that this has been done away with.

All bodies (public or private) exercising public power owe a duty of care to the public. In addition to this, section 33 of the Constitution of theRepublicofSouth Africa(the Constitution) provides that everyone has a right to an administrative action (as defined by section 1 of the Promotion of Administrative Justice Act 3 of 2000) that is lawful, reasonable and procedurally fair. Therefore administrative actions such as decisions given by local authorities are subject to scrutiny so as to ensure compliance with legal principles.

As per the judgment in Faircape Property Developers (Pty) Ltd v Premier, Western Cape 2002 6 180 (C), a property developer who suffers a loss as a result of a local authority having exercised his/her statutory duties negligently has recourse against that local authority.

Judgments such as the above are in line with our Constitution, which is the supreme form of law inSouth Africa. Our Constitution is founded on values such as the values of democratic government to ensure accountability, responsiveness and openness. The value of an accountable government is promoted by ensuring that citizens have some form of relief against their government when the latter causes them harm.

Davis J In the Faircape Property Developers case said the following:

“… to find that a party who would be gravely prejudiced by gross negligence of an official enjoined to consider such an application, should be without any remedy and thus left to suffer considerable financial consequences of such a wrongful decision would offend the principle of accountable…”

In addition to the above, it is also important to note that when interpreting any legislation inSouth Africa, every court must promote the spirit, purport and objectives of the Bill of Rights. Section 195 (1) of the Constitution provides that public administration must be governed by the democratic values and principles enshrined in the Constitution, including a high standard of professional ethics, accountability and transparency. Section 152 (1) of the Constitution provides that the objects of local government include the provision of democratic and accountable government for local communities.

It is due to the above that I submit that the warning that was recently sent out by South African Property Owners Association (SAPOA)- court warns developers not to rely on local authorities to know the correct zoning on their property, can be deemed as superfluous; the public will always have recourse against a public official whose negligent conduct causes them harm, financial or otherwise.

The Consumer Protection Act (CPA) and municipalities:

• The application of the CPA to municipalities was delayed so as to give municipalities a chance to get their affairs in order. However, municipalities with high capacities such asCape Town,Johannesburgand Tshwane were never exempted i.e. the CPA applied to these municipalities with high capacity as soon as it came into effect.

If you would like a detailed article on the above, please do not hesitate to contact our offices.

 

TRUSTS: majority decision vs. passed resoultion

Rampai J of the Free State High Court, in the  case of Steyn and Others NNO v Blockpave (Pty) Ltd 2011 delivered a judgment which states that its not the majority vote of the trustees that legally binds a trust, but rather a properly passed resolution.

This case held that although trustees may disagree internally on a matter, they are prohibited from disagreeing externally. They my debate matters internally and put them up for a vote, after which the decision of the majority shall prevail. However, in order for a trust to function legally, it requires the complete participation of all its trustees; all trustees of a trust are required to partake in the decision making process.

In this case, the trust had three trustees, but in making the decision to take legal proceedings against the respondent company, one of the trustee, who was generally marginalised from the activities of the trust was not informed about the meeting and therefore did not attend the meeting at which the decision to institute the legal proceedings was taken. The High Court therefore held that “…no proper resolution had been taken by the entire complement of the trust body to launch the proceedings.”

The full judgment is available here:

http://www.saflii.org/za/cases/ZAFSHC/2010/134.pdf

 

 

COMPLETE COMPLIANCE SEMINAR

                                                           IN ASSOCIATION WITH

                                                 THE INSTITUTE FOR ESTATE AGENTS

IT’S A FACT- SERVICES RENDERED BY ESTATE AGENTS ARE GOVERNED BY THE CPA

There were many that were still arguing for the possibility of Estate Agents not being governed by the Consumer Protection Act (CPA). However, after attending the Complete Compliance Seminar, I think all doubts regarding this matter have diminished and the only thing left is to ensure that all services rendered by estate agents are in compliance with the CPA.

With presentations by:

1. Dianne Brock and Annette Evans – The Institute for Estate Agents;
2. Solly Molefe – Home Ownership Education;
3. Buyile Nopote – A representative from the Western Cape Consumer Protector’s Office;
4. Aubrey Mathope – A representative from the National Consumer Commission (NCC) – Custodians of the CPA;
5. Stefan Le Roux – Legal Compliance for the Consumer
6. Meyer de Waal- Complete Compliance using the Property Transaction Kit (PTK)

All experts within their respective fields, there is no doubt that all attendees, including various attorneys, estate agents and representatives from various bodies all left ‘being the wiser’.

 Some interesting information from the seminar:

• “To ensure that your property transaction is in compliance with the CPA, we recommend using the PTK.”

INSTITUTE FOR ESTATE AGENTS

• “There are about 54% of declined bond applications every year. We need to focus on these declined bond applications as this is where business lies- we need to recycle buyers, rehabilitate them so as to get them into positions where they are able to get loans.”

SOLLY MOLEFE OF HOME OWNERSHIP EDUCATION

• A juristic person/entity is a consumer in terms of the CPA and is therefore subject to same, when its annual turnover is below R 2 million.”

AUBREY MATHOPE A REPRESENTATIVE FROM THE NATIONAL CONSUMER COMMISSION

• “The CPA applies to transactions between the following:
• Property developer – a consumer;
• An individual – a consumer (in the ordinary course of business);
• An individual – estate agent – consumer (in the ordinary course of business);

 But it is not applicable to a once-off transaction between:

• An individual – estate agent – consumer”
• However, the CPA is applicable to the services rendered by the estate agents.

AUBREY MATHOPE A REPRESENTATIVE FROM THE NATIONAL CONSUMER COMMISSION

• “A recent court judgment provided that in determining whether a transaction was conducted within the ordinary course of business, one has to look at whether the underlying contract is used within the ordinary course of business within that specific industry.”

STEFAN LE ROUX- LEGAL COMPLIANCE FOR THE CONSUMER

Please take note that all the presentations from the seminar are available on the Property Transaction Kit (PTK) website:

http://www.propertytransactionkit.co.za/

 

 

 

 

 

RETURNS AND REFUNDS: Consumer Protection Act (CPA)

In terms of the Consumer Protection Act (CPA) section 56 (read with section 55), all goods purchased by a consumer are subject to an implied warranty of quality and suppliers can not contract out of this provision. This means that a consumer has the right to receive goods which are:

• Of good quality and are reasonably suited for the purpose for which they are intended for.

If within 6 months after a purchase, the goods are found to be in contravention of the above, a consumer is allowed any of the three R’s:

1. Replacement;
2. Repair; or
3. Refund.

A consumer is allowed recourse to any of the above three R’s .If a supplier refuses a consumer any of the above three R’s ( a consumer elects which of the R’s they would like), the Tribunal shall fine such supplier/business either 10% of its annual turnover or R 1000 000-00.

It is for this reason that if there are any suppliers/businesses that are still operating with ‘no return or refund policies’, that we recommend that they amend their policies as soon as possible. As for consumers out there, know your rights.

TAKE NOTE- there are two types of returns and refunds:

• The ‘change of mind/good will refunds’- in terms of these, suppliers/businesses are not obliged to accept the returned goods and refund the consumers. If suppliers/business do honour these it will be out of good will.
• Those that are imposed by statutes- Under the CPA, there are certain circumstances under which suppliers/businesses are obligated to accept the returned goods and refund the consumer with their monies.

For more information regarding returns and refunds, click on the following link (Reunds and Returns: You have rights as a consumer. Understand them. Enforce them). http://apps.thedti.gov.za/publications/refunds_returns.pdf