MAINTENANCE

July 25, 2016 Schnetlers Leave a comment

What can you do to enforce a maintenance order against a person who is responsible for paying maintenance, but fails to do so or is paying too little?

When someone fails to pay maintenance in terms of a maintenance order you have the option of lodging a complaint against them with the Maintenance officer, stating that the person is legally liable to maintain, for example, yourself or your minor child(ren) and is not doing so. The Maintenance officer must investigate the complaint and may then institute an enquiry in a maintenance court. The Maintenance officer, not the complainant, decides whether to institute an enquiry.[1] In investigating a complaint about maintenance, the Maintenance officer may obtain statements or any relevant information pertaining to the payment of maintenance. An enquiry under the Maintenance Act is a procedure which empowers people to enforce their rights and those of their child(ren) at the State’s expense. During the course of a maintenance enquiry the parties usually come to an agreement and seek to withdraw the proceedings, or have the terms of the agreement made an order of court, which cannot be disregarded by the magistrate.[2] If the parties cannot come to an agreement the matter will be referred to the maintenance court.

Whenever a person against whom a maintenance order has been issued under the Act fails to make any payment in accordance with that order, the order is enforceable in respect of any amount that person has failed to pay, together with any interest:

by execution against property;
by the attachment of emoluments; or
by the attachment of debt.

If a maintenance order made under the Act remains unsatisfied for a period of ten days from the day on which the amount became payable or the order was made, the person in whose favour the order was made may apply to the maintenance court in which the order was made: 1) for authorisation of the issue of a warrant of execution, 2) for an order for the attachment of emoluments or 3) for an order for the attachment of debt. The application must be accompanied by a copy of the maintenance order or other order in question and a statement under oath stating the amount that the person against whom the order was made has failed to pay.[3]

Subject to the defence that failure to make a payment in terms of a maintenance order is due to a lack of means, a person who fails to make a particular payment in accordance with a maintenance order is guilty of an offence and liable to conviction with a fine or imprisonment for a period not exceeding one year, or to imprisonment without the option of a fine.[4]

On the application of the public prosecutor and in addition to or instead of imposing a penalty, a court convicting any person of the offence of failing to make a payment in accordance with a maintenance order may grant an order for recovery from that person of the amount he or she has failed to pay, together with any interest.[5]

Your best option would be to approach the Maintenance officer in order to reconcile the outstanding amounts. Thereafter, if the person still fails to effect payment, you can approach an attorney to either proceed with execution of the order, if the person has sufficient movable or immovable property, or obtain an emolument order which will be served upon the employer of the person (ordering the employer to pay the maintenance), or you may approach the maintenance court for an order for the attachment of any debt accruing, then or in the future, to the person responsible for paying maintenance.

[1] The Maintenance Act 99 of 1998.

[2] Young v Young 1985(1) SA 782 (C).

[3] The Maintenance Act 99 of 1998.

[4] Ibid.

[5] Ibid.

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. Errors and omissions excepted (E&OE)

Uncategorized

APPOINTMENT OF THE EXECUTOR OF MY WILL

July 25, 2016 Schnetlers Leave a comment

This is a subject which causes more and more discussion and people become more knowledgeable about Executor’s fees and how it is calculated once a person dies and his or her estate is left to the Executor to wind up.

The maximum Executor’s fee is fixed by law. The current maximum permissible Executor’s fee is 3.5% of the gross estate value plus 14% VAT (should the Executor be registered for VAT).

It seems as though this fee is very fair or even at a very low percentage, but let us illustrate with an example:

Let us suppose that the gross estate value is R2 million. Due to the drastic increase in the value of fixed property over the last few years it is quite possible to attain a gross estate value of R2 million and very realistic if you own fixed property.

R2 million x 3.5% = R70 000-00

Plus 14% VAT = R9 800-00

Total Executor’s fee = R79 800-00

This Executor’s fee does not include any additional administrative costs such as transfer fees of the fixed property or funeral costs. Thus it becomes clear that the cost of administering an estate to the value of R2 million could easily escalate to R100 000. The result is that more and more individuals consider appointing the person who lives longest or another family member as Executor, assuming that the appointed Executor is then enabled to negotiate an Executor’s fee with an institution or law firm which will then act as the appointed Executor’s agent.

It does happen, however, that the appointed Executor (e.g. the surviving spouse) is not well-informed about the actions he/she should take when his/her spouse dies, therefore he/she often appoints the first agent who offers his/her services. No negotiation takes place and the agent imposes the maximum tariff as fixed by the law.

Our recommendation is therefore the following:

Appoint the person who lives the longest or another family member as Executor of your estate, but ensure that the appointed Executor is fully aware of the fact that he/she may negotiate the Executor’s fee with an institution; or
Should you have every confidence in an institution, appoint that institution as Executor of your estate, but negotiate beforehand and fix the agreed tariff in your will. Do not leave it up to any other person to negotiate Executor’s fees after you have passed away.

Staff news

TALKING TO “LOR”

July 25, 2016 Schnetlers Leave a comment

If you are a follower of our firm’s Facebook page ( https://www.facebook.com/schnetlersattorneys ) you would have noticed that the latest addition to our team of legal experts is Laura Ames. Laura was admitted as an attorney of the High Court on Tuesday, 5 July 2016 and I therefore thought it fitting to conduct a short interview with Laura so that our readers can get to know her a little better.

Where did you grow up?

I was born in Cape Town and the first half of my life I lived in Edgemead with my mom, dad, younger sister and circus of animals. I attended Edgemead Primary School and thereafter moved to Rondebosch and attended Rustenburg High School for Girls.

When did you decide to become a lawyer?

It was sometime in Primary School, I remember wanting to study either law or accounting. In High School when it came to applying to universities I made my decision to apply for law. To my family and friends I am known as “Lor” – everyone thought that studying “law” was quite fitting – “Lor” studied law!

Where did you study?

I studied through Unisa taking full time classes at Varsity College in Rondebosch. Here we received one-on-one attention from the lecturers as our classes were usually restricted to no more than ten students per class. We were lectured by practising and retired attorneys thus we received first-hand knowledge which we found to be very enlightening.

Why do you want to be lawyer?

Simply put – I want to help people – that is why I decided to study law in the first place.

What challenges do you face in your profession as a young female attorney?

It can at times be difficult to be taken seriously as a professional since I am young. It is also a well-known phrase that “the customer is always right” thus at times I find it challenging to know what is the best manner in which to explain and convince a difficult client that they are unfortunately mistaken in a certain situation and provide my professional advice.

Where do you see yourself in ten years’ time?

Only time will tell, but hopefully I would have climbed the “legal ladder” and perhaps be a director of a law firm.

What advice do you have for young people who are considering studying law?

I would advise that the road to qualifying as an attorney is very long and not an easy path. Before deciding to study law one must decide whether one is prepared and ready for much hard work and many sacrifices. The profession can be very rewarding at the end of this lengthy journey.

It was quite insightful to have a quick chat with my colleague and I, together with our firm’s directors and support staff wish Laura all of the best for her career in the legal profession. Be on the lookout in our next newsletter for more interesting interviews with the people behind the success story that is Schnetler’s Inc.

Compiled by: Annerine du Plessis

Consumer Law

THE EFFECT OF SECTION 14 OF THE CONSUMER PROTECTION ACT ON FIXED TERM RENTAL AGREEMENTS

July 25, 2016 Schnetlers Leave a comment

The Consumer Protection Act 68 of 2008 (CPA) has considerably impacted on the rental property market since its commencement on 31 March 2011. More precisely, section 14 of the CPA has had an effect on fixed term rental agreements. Section 14, however, is not relevant to fixed term lease agreements which have been entered into between juristic persons, regardless of their asset value or annual turnover. Further, section 14 will only be applicable to lease agreements which have been entered into for a fixed term – this means that section 14 will be applicable to many, if not the majority of lease agreements relating to immovable property. As the CPA only relates to agreements, lease agreements which have been entered into on a month-to-month basis would unfortunately not fall within the ambit of this section.

The Act does not differentiate between leases for residential, commercial, retail or industrial properties; in actual fact the Act does not discuss lease agreements for immovable property as such. It is clear from the definitions and purpose of the Act, however, that it was intended for lease agreements to fall within the ambit of the Act. The nature of the transaction between the lessor and lessee calls for regulation and protection thereof; consequently sensible to assume that it was intended for the section to apply to all lease agreements irrespective of the property type.

Section 14(2)(b) of the CPA reads “despite the provisions of the consumer agreement to the contrary – the supplier may cancel the agreement 20 business days after giving written notice to the consumer of a material failure by the consumer to comply with the agreement, unless the consumer has rectified the failure within that time.”

The lessor will thus not be in a position to cancel the lease agreement during the subsistence of the lease agreement, unless the lessee is in breach of a material term of the agreement and fails to remedy such breach within the permitted period after having received written notice to that effect. This means, should the lessor wish to take occupation of the property, or sell same, he will not be permitted to cancel the agreement.

Should the lessee be in breach of a material term of the agreement, and the lessor wishes to cancel the agreement, the lessor needs to give the lessee written notice, describing such breach and allowing the lessee 20 business days to remedy same. Further, the lessor should set out in the notice that should the lessee fail to remedy the breach within the stipulated time, the consequence will be cancellation of the agreement.

The CPA has a considerable impact in fixed-term lease agreements. It is vital for property owners to be conscious of the effect of this Act so that they may comply with it and set measures in place to mitigate the potential burden placed on property owners by the Act.

Compiled by: Laura Ames

Wills and Esates

ADMINISTERING OF AN ESTATE

June 20, 2016 Schnetlers Leave a comment

The administering of a deceased estate is regulated by the Administration of Estates Act No 66 of 1965 (as amended) and divided according to a valid will or the Intestate Succession Act No 81 of 1987 (as amended) or a combination of both acts.

Various other acts and regulations may, however, also be applicable, like those applicable to income tax (with due allowance for VAT and CGT), Estate duty and Donations tax, and support of surviving spouse.

When someone dies, his/her estate must be reported to the Master of the High Court as soon as possible, and certain report documents, together with the original will, where applicable, should be delivered to the Master.

In the case of estates with a gross value of less than R250 000 the Master may dispense with an official appointment of an Executor to execute the required administering process. In all other cases an Executor will be appointed by the Master, who will issue an Executor’s letter to the appointed Executor.

As soon as the Executor’s letter has been issued the formal administering of the estate, which the Executor has to follow, will commence. One of the Executor’s first tasks would be to announce to the creditors, acquire details regarding estate assets and have it valued if necessary, and recover certain assets. Known and filed liabilities should be investigated and attention must be paid to income tax.

The Executor is now compelled to submit a liquidation and distribution account (statement of assets and liabilities) to the Master of the High Court within six months after being issued with the Executor’s letter, or ask for a formal postponement. This estate account will indicate all assets and liabilities, distribution of heirs and details of assets outside the estate which are directly payable to beneficiaries.

The Master will check the estate account and then issue a questionnaire to the Executor. As soon as the Master has granted approval the Executor may proceed to announce the account as being open for inspection for 21 days at the Master and the nearest Magistrate’s Office.

Should any written challenges be submitted, it should be dealt with according to the regulations in the Administration of Estates Act. Should there be no challenges, or when the Executor has disposed of all challenges, may the Executor proceed to make payments to heirs and carry over any other assets to the beneficiaries.

In most cases the administering process should not be complicated, therefore it would be possible to finalise within a fair period of time (approximately 6 to 9 months). There are, however, many obstacles which may slow down this process and even bring the administering process to a virtual standstill. Some of the most well-known and general obstacles are poor service from government and private institutions, invalid and unpractical wills, shortage of cash, quarrels and disputes among family members and beneficiaries, lack of information, disorder in the tax and other affairs of the deceased, lawsuits before and after death, and legal postmortems in case of an unnatural death, which may sometimes be required before policies can be paid out.

It is therefore clear that the administering of an estate is a specialised environment which should be left to capable people with knowledge of the Administration of Estates Act and years of experience. Ignorance regarding the run of events as well as errors of judgement may eventually cost you dearly if you don’t make use of the available expertise.

Family Law

WHAT IS THE ROLE OF THE FAMILY ADVOCATE

June 20, 2016 Schnetlers Leave a comment

The Family Advocate has many duties but in the context of Divorce Law, they are mostly consulted for making sure that all Parenting Plans and divorce Consent Papers are in the best interest of any minor children involved. The public can, however, also have access to the Family Advocate and it is important to note that they offer a free service.

The roles of the Family Advocate include the following: to provide education to family members and to others involved in the systems serving the family and youth; to help identify the strengths and needs of families; to be a mediator between the system and the family by helping to educate professionals on the strengths and needs of the family; to help family members understand the different roles of the agencies involved in the system and how they may affect the family and assist families in identifying and utilizing necessary services.

A Family Advocate helps state and local agencies and systems adopt more strengths-based and family-driven programs, policies, and services. The focus is to better meet the needs of families and their youth who have mental illness, co-occurring disorders or substance use disorders and improve outcomes for all, including families, youth, and the agencies they utilize.

A Family Advocate also has the authority to draft Parenting Plans at no cost which will help provide the minor child with a stable and suitable schedule between the two parents. A Family Advocate cannot however provide for a maintenance amount as this falls under the jurisdiction of the maintenance court. Should a parent feel like they are not sure of their rights or responsibilities towards their minor child, the Family Advocate can be approached in order to arrange a meeting between the two parties to mediate the rights and responsibilities between the two parties. This process is also at no cost, however should one of the parties deny the meeting, the Family Advocate has no authority to subpoena them to attend the meeting.

The Family Advocate is a perfect remedy for parents who have their child’s best interest at heart and who aim to provide a stable environment for the child when both parents are no longer together.

Adoption

THE ADOPTION PROCESS

June 20, 2016 Schnetlers Leave a comment

Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.

Ronald Reagan

Recently Child Protection Week was celebrated in South Africa. I therefore decided that it would be suitable for me to write this article on a topic I have been currently dealing with and which is related to us wearing green ribbons during Child Protection Week.

I was recently approached by clients regarding an adoption of minor children. Seeing as this field of our law is fairly new and unfamiliar to me, I have delved into extensive research on this topic and even had a consultation with a social worker who has more than two decades’ experience in this field.

I am sure that to people who are not familiar with the process it may seem that the South African legislation regarding adoption is unclear, ambiguous and even cumbersome, but after doing proper research and speaking to the “right people” I am, for the first time, beginning to feel a bit more confident on this alien topic.

Due to the complexity of an adoption application I shall merely be setting out a simplistic framework of an adoption application procedure. In the South African adoption process there are mainly four phases:

The application

The only ways to legally adopt a child in South Africa are by working through an accredited adoption agency or even with the help of an adoption social worker.

The Screening process

This phase involves orientation meetings with the prospective adoptive parents, interviews with the social worker, full medical examinations, marriage and psychological assessments, home visits and police clearance and checking of references.

The Waiting List

After completion of the aforementioned phase the prospective adoptive parents are placed on a waiting list for a child. The prospective adoptive parents can decide on the age and sex of the baby or child they would like to adopt.

The Placement

The Children’s Court is in control of this phase. Once the child has been with the new parents for a period of time and the social worker has assessed the adoption to be in the best interest of the child, the Children’s Court will finalise the adoption.

I am privileged enough to go home to a healthy eighteen-month old daughter every day after a long day at the office. And even though I realise that the adoption process is a lengthy and costly affair, I can honestly say that the sacrifice of time, stress and money would surely fade in comparison to the wonder that is motherhood!

Compiled by: Annerine du Plessis

Charity

INTERNATIONAL MANDELA DAY

June 20, 2016 Schnetlers Leave a comment

International Mandela Day is an annual international day in honour of Nelson Mandela. This day is celebrated each year on 18 July, Mandela’s birthday. The day was officially declared as “Mandela Day” by the United Nations in November 2009, with the first UN Mandela Day being held on 18 July 2010.

In April 2009, the 46664 concerts and the Nelson Mandela Foundation invited the global community to join them in support of an official Mandela Day. Mandela Day is a day which is dedicated in tribute of the legacy of Nelson Mandela, South Africa’s former president, and his values, by means of volunteering and community service. This day is therefore, not meant as a public holiday.

Mandela Day is a global call to action that drives the idea that each individual has the power to transform the world and the ability to make a change in the world.

The Mandela Day campaign message is:

“Nelson Mandela has fought for social justice for 67 years. We’re asking you to start with 67 minutes.”

According to a statement issued on his behalf, Mandela had the following to say about Mandela Day: “We would be honoured if such a day can serve to bring together people around the world to fight poverty and promote peace, reconciliation and cultural diversity“.

For 67 years, Nelson Mandela devoted his life to the service of humankind – as a Human Rights Attorney, a prisoner of conscience, an international peacemaker and as the first democratically elected president of a free South Africa.

Schnetler’s will be taking part in Mandela Day as a firm. We believe that in order for South Africa to be a better country for every citizen, it starts with us, with the people of South Africa. Every citizen of South Africa needs to come together in order to fight for a better future for all.

Dedicate 67 minutes of your day on 18 July 2016 to the betterment of your society. It doesn’t have to cost you anything, except for your time.

Compiled by: Laura Ames

Wills & Testaments

WHAT HAPPENS IF I DIE WITHOUT A WILL?

May 20, 2016 Schnetlers Leave a comment

Attorneys often emphasise the fact that you should have a will drawn up and revise it regularly in order to facilitate the bequeathing of your possessions after your death. Many people still omit to do this. The problem is that, should a person die without leaving a valid will, in other words intestate, his/her estate will be administered and distributed according to the stipulations of the Intestate Succession Act No 81 of 1987.

Below is a basic example of the effect an intestate death will have on the distribution of an estate. Should the composition of the beneficiaries of the deceased be more complex, the administering of the estate in terms of the Intestate Succession Act will also become more complicated.

Let us assume that person A dies and the value of his estate is R1.8 million. He is survived by his wife (B) and 2 children, of which one is of age and the other is a minor.

Scenario 1:

A and B is married out of community of property.

B inherits R125 000 or a child’s portion, whichever is the largest.

A child’s portion is calculated by dividing the total value of the estate by the spouse and number of children, in other words R1.8 million/3 = R600 000.

The spouse and children therefore inherits R600 000 each.

The inheritance of the minor will be paid to the Master’s Guardian’s Fund, as there is no will which determines that the minor heir’s inheritance should be placed in e.g. a Testamentary Trust, where the funds will be administrated on behalf of the minor until he/she becomes of age or reaches any other specified age.

Scenario 2:

A and B is married in community of property.

B inherits 50% of the estate due to the marriage in community of property.

B also inherits R125 000 or a child’s portion, whichever is the largest, with regard to the other half of the estate.

A child’s portion is calculated by dividing half of the total value of the estate by the spouse and number of children, in other words R900 000/3 = R300 000.

The spouse inherits R1.2 million and the children R300 000 each.

The fact that the inheritance of the minor will be paid to the Master’s Guardian’s Fund may place the spouse in such a dilemma that she has to devise plans to finance the amount payable to the Master’s Guardian’s Fund to the benefit of the minor heir. Alternatively she could register a mortgage against an immovable property in favour of the Master’s Guardian’s Fund.

In case of death without a valid will there will of course be no person or institution appointed to support the surviving spouse in the administering of the estate. This should not usually present a huge obstacle, but the spouse should consider carefully which person or institution she appoints to assist her in this task. She should also negotiate the Executor’s fee with the relevant person or institution before the administering of the estate commences.

Housing and property law

PAY YOUR LEVIES, OR ELSE…

May 20, 2016 Schnetlers Leave a comment

Dear Mr Lawyer

I am the owner of a sectional title, and I have paid my levies every month as required, until the water started seeping through the ceiling of my enclosed balcony into my section when it rains. The leak was clearly emanating from a defect in the common property. I asked the body corporate on numerous occasions to repair the defect, yet after four months of writing letters and sending emails the body corporate still has not done anything to honour this simple request. As a frustrated owner I resorted to desperate measures and employed a contractor to repair the property defect. I settled the bill myself.

May I withhold my levies for a period to set off the money that is owed to me by the body corporate?

Dear Mr Owner

Although this action may sound reasonable, the right to stop paying or to set off a debt against levies is not legally justified and owners are not, under any circumstances, entitled to simply withhold levies.

There is no provision in the Sectional Titles Act 95 of 1986 or the rules that gives an owner the right to withhold levy payments. Even if an owner incurs expense in performing an emergency repair to the common property, and believes that the body corporate owes him money, the owner may only set off the debt against the levies once it becomes liquid.

An amount can only be liquid once it has been agreed upon. An owner cannot set off the amount he believes he is entitled to deduct. The trustees, judge or arbitrator must have confirmed the amount.

If Mr Owner does withhold his levies without the amount being liquid, he is subject to the following sanctions in terms of the prescribed rules:

l Firstly, the trustees are entitled to charge interest on arrear amounts at a rate determined by them, and so the defaulting owner may receive a larger account, due to the interest on his arrears, than if he had paid his levies.

l What is more, The Sectional Titles Act imposes a positive obligation on trustees to recover levies from defaulting owners. Not only does the Act empower them to charge interest, the scheme attorneys will most likely issue summons against the defaulter for all costs that the Body Corporate may incur in recovering any arrears.

l Secondly, the prescribed management rules provide that, except in the case of special and unanimous resolutions, an owner is not entitled to vote if any contributions payable by him in respect of his section have not been duly paid. Therefore, an owner who withholds his levies is unable to vote for ordinary resolutions in respect of the section that he is withholding levies on.

Mr Lawyer, how does an owner deal with a situation where he believes the body corporate is liable for payment?

A dispute must be declared with the Body Corporate by written notice of the dispute or query to the trustees. The trustees or Body Corporate then have 14 days from receipt to resolve the dispute. During this period, the parties should meet to try and resolve the dispute. If there is no resolution after the 14-day period, either party may demand that the dispute be referred to arbitration. The arbitrator must make his/her recommendations in settlement of the dispute within 7 days from the date of commencement of the dispute. The decision of the arbitrator shall be final and binding and may be made an order of the High Court.

It is clear that prescribed processes are in place according to which disputes and related issues can be settled. Not only will this ensure that you act within the legal guidelines, but it will also eliminate unnecessary frustration.