FIXTURES AND FITTINGS

Many transfer attorneys have heard the question from a seller: “May I remove the stove or the curtain rails or the shelves or the … ?”

The most common dispute that arises between a seller and a purchaser is a dispute as to what is regarded as fixtures and  fittings. The simple answer is that this would be what the seller and purchaser agreed on in the offer to purchase, as the law leaves it to the seller and purchaser to make their own arrangements.

Usually the offer to purchase only states that the sale is “voetstoots and includes all improvements and all fixtures and fittings of a permanent nature”. It could also be that the offer to purchase does not refer to fixtures and fittings at all. If this is the case there are three factors that have to be  considered to determine whether a movable item is a fixture or a fitting.

  1. The nature and the purpose of the item

The item should be of a permanent nature and intended to always serve the immovable property. In other words it must be attached to the land or the structure erected on the land. Examples of this are a carport, steel security gates welded to door frames, and an irrigation system.

  1.  The manner and the degree of attachment

The question is whether the item loses its own identity and becomes an integral part of the immovable property or if the attachment is so secure that separation would involve substantial damage to either the immovable property or to the item itself. One must also take into account the method, time and costs involved in removing the item and whether the item could be used elsewhere.

  1. The intention of the owner

One should look at the intention of the owner at the time when the attachment was made.

It is therefore important to address this issue in the offer to purchase and draft a comprehensive list of what is included in the sale. This could save both parties a lot of time and frustration.

The following is a list of items that are usually considered to be permanent fixtures:

Built-in extractor fans; built-in kitchen cupboards; fitted bookshelves; fitted curtain rails; wall mirrors; stoves; existing garden, trees, shrubs, plants; pool filter, pool pump and pool cleaning equipment; fitted carpets; light fittings; towel racks; tap fittings; tennis court net; fireplace; awnings; post box;  alarm system; television aerial (but not satellite dishes) and door keys.

Some estate agents have amended their fixtures and fittings clause since the CPA came into operation, to read as follows: “The property is sold with all fixtures and fittings, including the following … which shall be in good working order on date of transfer.” The words “in good working order” are a very subjective assessment and opens the door to debate. The effect hereof is that the seller will be seen to have promised that all the fixtures and fittings will be in good working order, and to a large extent it will be eroding the protection of the voetstoots clause. Sellers should therefore take caution when signing the fixtures and fittings clause.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

SCHNETLER’S INC HELD ITS FIRST SEMINAR…

A1,2On Friday, 21 August, we held our first seminar at our offices in Century City. The topic of our seminar was “mediation” which is the latest addition to the vast range of professional services which Schnetler’s has to offer.

A1,1We had as our guest speaker Advocate André Oosthuizen S.C. who has, as well as practising as an advocate for 34 years at the Cape Bar, been involved in many mediations over the past few years.

The subject matter of the seminar opened our guests’ eyes to this brilliant alternative to litigation. The advantages to mediation are countless and far outweigh whatever disadvantages one may uncover.

For a cost-effective & time-efficient dispute resolution, consider negotiation through the process of MEDIATION. Contact our mediator, Annerine Du Plessis, should you wish to resolve a dispute through mediation.

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Compiled by Laura Ames

HOW CONFIDENTIAL IS CONFIDENTIAL?

Many businesses devote considerable time and energy to the protection of that business’s trade secrets and confidential information. Many legal issues, some of them far from clear, arise in relation to confidential information. How enforceable is a restraint of trade signed by an employee, in which the employee acknowledges having access to confidential information? When can competitors be sued for misappropriating and misusing confidential information?

As a point of departure, it is necessary to consider the question – what exactly is confidential information? What distinguishes information which belongs to a company, as confidential and secret, from other information which may properly be regarded as generally known in a particular trade and industry, but which, on closer analysis, is information generally known in a particular industry and not protectable at the behest of a specific company or entity in that industry.

Firstly, it needs to be emphasised that information does not become confidential simply because the business using the information labels it as such.  In the case of Alum-Phos (Pty) Ltd v Spatz & Another (1997) 1 All SA (W), “general information about the business does not become confidential because the proprietor chooses to call it confidential”.  In a later case of Petre & Madco Ltd v Sanderson-Kasner & Others 1984 (3) SA 850 (W), “[i]t is trite law that one cannot make something secret by calling it secret”.

Information is confidential when it is not public knowledge, and of economic value to an entity carrying on business in the field to which that information pertains.  It is, however, necessary to add a rider.  A company may have spent time and money training its employees, but if the knowledge imparted during such training is nothing more than knowledge and skills generally known to those operating in that branch of industry, then the information is not confidential and the employees who receive the training cannot be prevented from utilising it, at a later stage, when joining a competitor.

Although the courts have never attempted to draw up an exhaustive list of various categories of confidential information, and have decided the matter on a case-by-case basis, the case of Metre Systems Holdings (Pty) Ltd v Venter & Another 1993 (1) SA 409 (W) is useful.  In that case the Court listed some of the categories of confidential information recognised in our case law (although emphasising that the list was not exhaustive).  The categories thus recognised included: (a) customer lists drawn up by a trader and kept confidential for purposes of his own business; (b) information received by an employee about business opportunities available to an employer, even if such information could be obtained from a source other than the employer or employee; (c) information otherwise in the public domain could become protectable if skill and labour has been expended in gathering and compiling it in a particular useful form; (d) information regarding any marketing proposals and campaigns which a company is contemplated, either in relation to its entire product range or in relation to specific products; (e) information relating to the specifications of a product, the process of manufacture followed in putting that product together, and the results obtained in the development of the product; and (f) Information relating to the prices at which a person has tendered competitively to do work for another.

In conclusion, a crucially important aspect must be emphasised.  In any court proceedings aimed at protecting confidential information or preventing competitors from making use thereof, it is necessary to spell out carefully and in detail why the information sought to be protected is confidential.  Facts must be put up showing that it is not in the public domain, it is different from whatever information trade rivals use in their parallel business activities.  Failure to properly identify the confidential information which a court is asked to protect, and to adequately spell out the facts showing that it is indeed confidential, will mean that litigation instituted to protect the confidential information is doomed to failure.

Compiled by Annerine Du Plessis