The Ultimate Sign of Initmacy

Why You Should Sign an Antenuptial Contract

Many of us have watched enough movies or read enough Hollywood gossip to know that “prenup” is considered a dirty word. At worst, it’s viewed as a way to swindle your partner out of half (or more) of their assets, and at best, it just seems rather unromantic. But financial guru Suze Orman vehemently disagrees: “Drawing up a prenuptial agreement together is a sign of incredible trust and financial openness – you’re fooling yourself if you think you can achieve complete intimacy without it”.

Many couples discuss the “big questions” – children, morals, future aspirations – before they get married, but financial matters are just as likely to make or break a couple. Wedding theme colours and flower arrangements may be more fun, but if you haven’t had a serious money talk yet, discussing the parameters of your antenuptial contract is an excellent place to start.

Plus, while signing an antenuptial contract is not compulsory in South Africa, by not signing one, you will still be making a choice as couples who get married without one will automatically be married in community of property. Simply put, this means that everything each person brings into the marriage (assets and liabilities) and what they accrue during it will form part of one estate, which will be split equally (irrespective of who earned or contributed more financially during the marriage) between the partners should they choose to divorce. While this option may suit some couples, Garth Burne, a partner at Burne & Burne Attorneys, points out that should couples inadvertently find themselves in this situation and wish to change it after they are married, it can be a difficult and costly affair.

Therefore, it makes far more sense to give each other the gift of choice as well as your love before you say, “I Do.” There are two types of antenuptial contracts from which to choose, and they allow for a fair amount of flexibility to accommodate personal requests or provisos.

Marriage Out of Community of Property with Accrual

According to Burne, the accrual system is perhaps the fairest option for couples, with the vast majority of couples opting for this option as a result. “Before the introduction of the accrual system in 1984, if prospective spouses chose to be married out of community of property, there was no form of sharing between them of what was built up during the marriage. The accrual system was introduced to remedy this. It applies to all marriages out of community of property unless otherwise stipulated,” explains Burne.

In this option, each partner has separate estates during the marriage (and does not share in each other’s profits or losses). However, should they get divorced, they will share what they acquired during the duration of their marriage. This system has the advantage that neither spouse will be liable for the other spouse’s debts, but it incorporates the ethic of sharing, which is the basis of an in-community of property marriage.

The accrual portion of the agreement refers to how much each spouse has become richer by the end of the marriage. The spouse with the smaller accrual has a claim against the one with the greater accrual for half the difference between the two amounts.

“This regime of marriage allows for very imaginative and flexible estate planning,” says Burne.

Marriage Out of Community of Property Without Accrual

The other option is to still opt for marriage out of community of property but without the accrual option.

This achieves a complete separation of each partner’s assets, both those brought into the marriage and those acquired during the marriage, ensuring that each spouse retains ownership of completely separate estates. Should the couple get divorced, there will be no sharing of assets, and neither party has any claim against the other’s assets.

“This is recommended in circumstances where both parties have income and property; mostly couples marrying for the second time with children from previous marriages involved,” explains Burne.

If you are unsure which option to choose, your attorney can talk you through it, make recommendations and customise your contract to suit both of you. Entering into an antenuptial contract may sound like a daunting and complicated prospect, but the right attorney will instantly put you at ease.

The process also involves having in-depth, deeply personal conversations with your fiancé and being vulnerable together, which can make you feel even closer to your partner than before you signed on the dotted line. Perhaps it’s time Hollywood recasts the “prenup” from villain to romantic lead!

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Deceased Estates – Procedure for Winding Up

The winding up of a deceased estate can be a complicated matter, and I recommend that you employ the services of an attorney who specialises in the winding up of deceased estates to assist.

Certain Banks and Trust companies have been granted permission to wind up deceased estates where they have been nominated Executors under the deceased’s will. In the absence of a nomination, if the deceased dies intestate (without a will), the Master will appoint an Executor. Suppose the appointed Executor is a family member or not a specialist in the winding up of the deceased estate. In that case, the Master will generally, before appointing an Executor, require a letter from an Attorney in terms of which the attorney undertakes to assist in the winding up of the estate. In addition, if the heir is a minor, the Master will insist that an attorney be appointed.

Unless the will dispenses with the need for the Executor to furnish security, or unless the Master dispenses with it, the Executor will be required to provide security from a recognised financial institution to cover the value of the assets in the estate. It is generally very difficult, if not impossible, for the average individual to furnish security. So, the best course is to approach an attorney who will be able to put up the necessary security.

If the estate is under R250 000, it can be wound up summarily, so much of what follows does not apply.

Different aspects apply depending on whether or not the deceased was married in or out of community of property or single.

The first step is to file preliminary documents with the Master. These include a Death Notice, Inventory, Acceptance of Trust, Next-of-Kin affidavit, together with certified copies of the death certificate, personal particulars printed out from Home Affairs, Antenuptial Contract (if applicable, Will (if applicable), and certified copies of the death certificate, marriage certificate (if applicable) and identity documents of interested parties.

After some weeks, the Master will issue Letters of Executorship if the documents are in order.

The Executor then calls for creditors to file their claims against the estate by notice in the Government Gazette and a newspaper circulating in the area where the deceased resided.

The Executor then contacts Banks, Insurance Companies, etc., to realise the deceased’s assets and has the proceeds paid into an Estate Bank account that he will open.

The biggest headache is to obtain a clearance from SARS as the Executor will have to obtain a tax number for the estate and submit a return dealing with all income to the date of distribution. Needless to say, this may take months.

Once the assets are determined and claims against the estate have been finalised, the Executor will prepare a First and Final Liquidation Account that he will submit to the Master. The Master may raise queries to the account, but once it has been finalised, the Executor must publish a notice in the Government Gazette and newspaper advertising the account and calling on interested parties to raise objections with the Master should they choose to do so.

Thereafter the Executor can proceed to distribute the assets to the beneficiaries as determined by the will or by the law of intestate succession. However, a Conveyancer can only transfer immovable property, so if the Executor is not a Conveyancer, a Conveyancer will have to be appointed.

Once the estate has been finalised, and all creditors paid, the Master will issue a clearance to the Executor indicating that the estate has been finalised as far as his offices are concerned.

As can be seen from the above, the winding up of a deceased estate is a long and complicated one, and there are variations. Particularly because of the delay in obtaining a SARS clearance, it is very difficult to finalise an estate within a year of obtaining the Letters of Executorship.

To avoid unnecessary headaches, I recommend that you employ an attorney who winds up estates to act. The prescribed fee of 3.5% on the value of the assets and 6% on the income generated by the estate will be well worth paying.

Gerald Burne – Attorney, Notary and Conveyancer – Burne & Burne attorneys.

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The Property Practitioners Act 22 of 2019

When did the Property Practitioners Act come into operation?

As of 01 February 2022, this new Act came into operation.

What is the benefit of this Act coming into operation?

The real estate industry in South Africa is taking a step into the future with a piece of legislation in its industry that is reflective of the country’s demographics. Doing this is paving a path for those wanting to become property practitioners and, at the same time, providing protection for those who are buying or leasing property.

What is mandatory for a property practitioner to do before accepting a mandate from a seller or landlord?

A disclosure form setting out a comprehensive list of all the property’s defects. This document is called a mandatory disclosure form which the seller/landlord must sign, the purchaser/tenant and the property practitioner facilitating the sale/lease. The Act now makes it illegal for a property practitioner not to have this in place before accepting a mandate.

What must be included in the Mandatory Disclosure form?

The Act requires that all latent and patent defects must be disclosed in this form.

A latent defect is something that an ordinary person, when walking around the property, cannot see at first glance, i.e., a leaking roof, faulty geyser, damp in walls, etc.

A patent defect is something that an ordinary person can notice when walking around the property, i.e., a crack in the wall, a broken tile in a bathroom etc.
The property practitioner must ensure that this mandatory disclosure form is present. Still, they rely on the property owner to ensure that this form gets filled out correctly and comprehensively to the best of their knowledge.

Why would you say it is essential to complete this mandatory form properly?

The Property Practitioners Act encompasses consumer protection, ensuring that a buyer or lessee is aware of every issue or problem related to the property. If a seller does not disclose (or tries to conceal) a defect that they knew about, they run the risk of later being sued by the buyer or lessee.

What is a positive step forward to becoming a property practitioner?

The good news is those wanting to become a property practitioner are relieved to find out that the process is now much quicker. Once you have written the exam to get your Candidate Property Practitioner Certificate, you can then write the next exam within six months. In addition, once you have passed the Professional Designation Examination (PDE), you can start selling property under supervision if you have also completed certain practical modules. The old process required would-be agents to complete a year-long internship and pricy NQF4 exams.

What is another positive step forward to becoming a property practitioner?

Another positive change for real estate professionals is that Fidelity Fund Certificates (FFCs) will now be valid for three years instead of one. Also, a property practitioner’s FFC is no longer tied to a specific position. This allows a property practitioner to move to a different real estate agency or be promoted without having his or her existing FFC invalidated.
However, the Act imposes an obligation on conveyancing attorneys to request a copy of the Fidelity Fund Certificate for their files from the relevant Property Practitioner before making any payment of their said commission or otherwise to the said Property Practitioner.

Which key role players are affected by the creating of this Act?

The legislation in this Act affects anyone and everyone involved in real estate transactions (not just limited to real estate agents). Examples of other key players in the industry, but not limited to, are bond originators, bridging financiers, property developers, property managers, attorneys, and various other property professionals, to name a few.

Here are a few other interesting facts about the Property Practitioners Act.

The Act has now done away with the Estate Agency Affairs Board and has now created the Property Practitioners Regulatory Authority.

Transformation is one of the most significant aspects of the Property Practitioner’s Act, which has also set up a special fund to support previously disadvantaged real estate agents (now called property practitioners). This fund must be in place within six months of the Act coming into operation.

Another way of ensuring consumer protection is the introduction of Section 58, which places a limitation on the relationships that Property Practitioners have with other property market service providers. Section 58 provides that a Property Practitioner may not enter an arrangement whereby a consumer is obligated or encouraged to use a particular service provider, including an attorney, to render any service of which that Property Practitioner was the effective cause. A person who renders services in contravention of Section 58 is not entitled to any remuneration, payment, or consideration in respect of such services rendered.

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Conveyancing / Frequently Asked Questions

1 – What is the process of buying a home in South Africa?

The first step in the process is a meeting of minds between an owner of a property and a purchaser. This is done once the offer to purchase (OTP) has been signed. Currently, in South Africa, digital signatures are not yet accepted on these types of agreements, and therefore they will need to be signed in wet ink. Once signed correctly, this offer to purchase becomes a binding legal document.

 2 – What is the conveyancing process in South Africa?

3 – Who are the major role players in an ordinary transfer?

The transferring attorney controls the whole process, and they need to communicate with the following entities/people: –

  • Seller and Purchaser
  • Cancellation Attorneys (Sellers existing bond)
  • Bond Attorneys (Purchasers new bond)
  • Municipal Departments (Rates Clearance)
  • Levy Department (if sectional property)
  • SARS (Transfer Duty)
  • Agents (Estate Agents / Lodging Agents)
  • Deeds Office
  • Any other interested parties (i.e., Borer, Electrical, Gas, Electric Fence)

4 – How long does it take to transfer a property?

A normal transfer in South Africa should take anywhere between 6-8 weeks, but it could take up to 3 months in these uncertain times.

 5 – Who has the right to nominate the Conveyancing Attorney / Conveyancing Firm?

The seller/owner of the property is at full liberty to choose a Conveyancer or Conveyancing Firm to attend to the transfer of their property.
However, like many aspects of a sale agreement, there can be an agreement between the seller and purchaser regarding which Conveyancer or Conveyancing Firm they intend to use. This must be stipulated in the sales agreement to avoid any confusion prior to all parties signing.
If neither party has any preference with regards to a Conveyancer / Conveyancing Firm to use, and there is an estate agent involved, the estate agent has created relationships with certain Conveyancers / Conveyancing Firms and can suggest who to go with, but at the end of the day, the seller has the final say as to which Conveyancer / Conveyancing Firm they wish to use.

6 – What are the costs involved in transferring a property from a Seller to a Purchaser?

 

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The Burne & Burne Legacy Continues

Established by William Burne in 1880, Burne & Burne boasts five generations of attorneys.

A well-respected firm of attorneys, they have recently celebrated 142 years in the profession. In addition, Burne & Burne hold the unique position in South Africa of having the largest number of family members admitted to the legal profession – thirteen in all.

Today Burne & Burne is run by Gerald Burne and his son Garth Burne.

Burne & Burne, a long-established and experienced firm of attorneys, specialises in a wide range of services, including:

Conveyancing

Conveyancing is the name given to the specialised process of transferring real rights in immovable property from one person to another, which are registered in the Deeds Registry Offices throughout the country. Burne & Burne Attorneys are also on ABSA’s panel and handle the cancellation and bond registration of ABSA bonds.

Estate Planning

This includes the preparation of a Will, formation of Trusts and business interests. Burne & Burne will assist you with sensitive, efficient, and friendly service in the winding up of a Deceased Estate by stepping into the shoes of the deceased and will guide the heirs and all necessary parties through those procedures prescribed by law.

Notarial

This includes drafting Antenuptial Contracts (before you get married) and Post Nuptial Contracts (after you are already married and want to change your marital regime / expensive process).
Burne & Burne will guide you through the process of authenticating documents for use in this country and abroad (so if you are immigrating or wanting to study in a foreign county and need documents Apostilled, then this is what we do, amongst other Notarial services).

Litigation

Burne & Burne primarily focus on Civil Litigation in the Magistrate’s Court and High Court in Durban and surrounding areas.

Burne & Burne’s other services include:

  • Collecting of debts (not a debt collecting company).
  • Preparing contracts, sale agreements and leases.
  • Partnership agreements and landlord and tenant disputes.

Family matters such as divorce, custody, children access, and maintenance will all be handled with sensitivity and care.

Gerald and Garth of Burne & Burne and their team strive for the highest level of legal service through honesty and integrity. They aim to maintain the personal touch and create a lasting and trustworthy relationship with their clients. This is what the practice has been known for after all these years.

Our motto is “Our family looking after your family for generations”.

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Choosing The Right Conveyancing Attorney

Choosing The Right Conveyancing Attorney Can Aid in a Smooth Transfer Process

Choosing The Right Conveyancing Attorney Can Aid in a Smooth Transfer Process

  1. Choose the right conveyancer

The seller / owner of the property is at full liberty to choose a Conveyancer or Conveyancing Firm to attend to the transfer of their property.
If neither party has any preference with regards to a Conveyancer / Conveyancing Firm to use, and there is an estate agent involved, the estate agent has created relationships with certain Conveyancers / Conveyancing Firms and can suggest who to go with. Still, at the end of the day, the seller has the final say as to which Conveyancer / Conveyancing Firm they wish to use.

 

  1. Avoid any possible uncertainty

Clearly record your choice of attorney in your written sale agreement before all parties sign. Otherwise, you could be opening the door to dispute.

 

  1. Bring your attorney into the picture from Day One

Sellers, in particular, should remember this basic principle – agree to nothing (verbally or in writing) until your lawyer has checked it out for you! A lot can go wrong with property sales, especially through the wording and signing of the sale agreement itself.

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National Wills Week

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National Wills Week

Wills-Week

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Getting Married in another Country? What are the Legal Consequences?

Getting Married in another Country? What are the Legal Consequences?

This type of marriage may seem awfully romantic and appealing but can turn quickly sour when questions regarding the matrimonial property regime of the parties are raised at divorce or death.

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