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TO: TRANSFERRING ATTORNEYS / BANKS / SHERRIFS 

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Before 1 March 2015, properties up to R600,000 qualified for 0% transfer duty.

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It is a well-known and widespread practice for employers to structure contracts of employment in such a way that the permanence of the contract is avoided. For example an employer may keep renewing a contract with a duration of 6 months over and over, which in itself can create a permanent contract. The employer can also save money with fixed term contracts by denying the employee the opportunity of pension and/or provident fund benefits and also medical aid benefits, and in the event of retrenchments, the employee on a fixed term contract can be deprived of severance pay.

Employers need to be aware of the new Section 198B of the LRA:

a ‘fixed term contract’ means a contract of employment that terminates on—

(a)        the occurrence of a specified event;

(b)        the completion of a specified task or project; or

(c) a fixed date, other than an employee’s normal or agreed retirement age, subject to sub-section 3 of the LRA.

SUB-SECTION 3 OF THE LRA

In terms of subsection 3 of the LRA, An employer may employ an employee on a fixed term contract or successive fixed term contracts for longer than three months of employment only if:

(a) the nature of the work for which the employee is employed is of a limited or definite duration; or

(b) the employer can demonstrate any other justifiable reason for fixing the term of the contract

SUB-SECTION 4 OF THE LRA

Subsection 4 of the Act lists justifiable reasons for fixing the term of an employment contract which are the following:

If the employee

(a) is replacing another employee who is temporarily absent from work;

(b) is employed on account of a temporary increase in the volume of work which is not expected to endure beyond 12 months;

(c) is a student or recent graduate who is employed for the purpose of being trained or gaining work experience in order to enter a job or profession;

(d) is employed to work exclusively on a specific project that has a limited or defined duration;

(e) is a non-citizen who has been granted a work permit for a defined period;

(f) is employed to perform seasonal work;

(g) is employed for the purpose of an official public works scheme or similar public job creation scheme;

(h) is employed in a position which is funded by an external source for a limited period; or

(i) has reached the normal or agreed retirement age applicable in the employer’s business.

The effect of Employment in terms of a fixed term contract concluded or renewed in contravention of subsection (3) is deemed to be of indefinite duration, which means that the benefits of a fixed term contract are lost.

3 REQUIREMENTS FOR FIXED TERM CONTRACTS

For fixed term contracts to be enforceable there are three main requirements that have to be met:

1. Firstly, the nature of the work must be for a limited duration or there must be some other justifiable reason for fixing the term of the contract.
2. Secondly, the fixed term contract must be in writing.
3. Thirdly, the contract must specify the justifiable reason.

The onus is on the employer to prove that there is a justifiable reason and that the term of the contract has been agreed.

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1. All relevant disclosures in terms of the Electronic Communications and Transactions Act, as are provided for in the Act. There is a checklist of 18 disclosures of information which need to be made to website users.
2. PAIA Manual: Promotion of Access to Information Act prescribes a manual that must be accessible on the website and must be submitted to the South African Human Rights Commission. This manual prescribes a framework to be followed should people wish to access information.
3. Privacy policy,
4. Disclaimers: it is imperative that your website protects your rights,
5. Terms and Conditions of use.

The simplest way to comply is to have a link to a dedicated 'legal' page which contains all the necessary information.

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This meaning, that should the contract stipulate a manner of amendment/variation/cancellation, one must always take heed of what has been stipulated in order that the amendment/variation/cancellation be valid and binding.

A very common contractual terms prescribes that amendments/variations/cancellations may be done in writing and signed by both parties. The question at hand is whether email correspondence between the parties agreeing to variation/amendment/cancellation is sufficient to fulfill the term in writing and signed.

The Supreme Court of Appeal (Spring Forest Trading 599 CC/Wilberry (Pty) Ltd t/a Ecowash) recently held that correspondence over email cancelling a contract is sufficient for when a contract requires cancellations to be in writing and signed by the parties. The email signature amounts to an electronic signature as it contains the typed names of the parties in terms of the Electronic Communications and Transactions Act.

It is noteworthy that if a contract states that it must be varied in writing, an oral agreement to vary will not stand up in court. So if you orally agree to such, it is best that an email is sent to the other party for them to confirm in writing/by email for the action to be binding. For certainty is still recommended to reduce the agreed to writing and have it signed by both parties.

Whenever dealing with business relationships that are guided by a binding contract, one must always follow the contract and what it (legaly) prescribes.

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It is also very important if you are in the business of leasing various properties on a large scale that the Consumer Protection Act (CPA) is complied with to the extent that it is applicable.  Furthermore, with residential property the Rental Housing Act, soon to be amended, must also be complied with. Most persons who are not lawyers and do not have the experience with drafting contracts are not normally in the best position to be drafting leases based on their own interpretation of the law.

Apart from the legislation that governs leasing premises, here are some useful practical guidelines that the prudent landlord would ensure leases comply with:

1. The monthly rental amount should be separate to additional charges, electricity, water and penalties or other miscellaneous charges;
2. Invoices must be accurate and detail all the costs in a clear understandable manner. We suggest that itemised billing broken down into categories detailed in point 1 above;
3. Ensure that 20 business days’ notice is given to terminate a lease on notice (this is in terms of the CPA, however you need to check whether the Act applies taking into account the nature of the lease);
4. Ensure that the time periods under the CPA and the Rental Housing Act are complied with, where applicable;
5. Renewal clauses including options must be clear and unambiguous, and escalations must be clear, such clauses must also not be written with a bias toward the landlord;
6. Always diarise dates by which tenants are to receive notice of certain events such as renewals or terminations;
7. Clearly specify procedures in respect of inspection of the premises;
8. Clearly specify how the premises are to be re-instated;
9. Always make a defects list upon a handover of the premises;
10. Ensure that addendums are correctly aligned with the terms of the leases to which they relate;
11. Suretyships must be correctly signed.
12. If the premises change it must be noted correctly in a properly signed addendum which reflects the new premises and complied with the lease. This is common in office blocks and malls where tenants may be shifted around. The domicillium clause must also be amended if this affects same.

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The right to restrict unwanted direct marketing is in terms of Section 11 of the Consumer Protection Act.

Whilst you may still be contacted by non-members of the DMASA, we have found that the amount of unwanted communication has decreased considerably once contacting the DMASA.

The process is quick and simple- visit the website (link below), register to opt out and fill in your details or send a blank email quoting your ID number. 

The DMASA contact details are:

               Website: http://www.nationaloptout.co.za.

Tel: 0861 362 362

Email: info@dmasa.org 

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General Power of attorney: enables an agent/authorised person to attend to a variety of different acts. Generally it is comprised of various clauses enabling a variety of specific acts.

Powers of attorneys are especially useful when someone is overseas and requires local assistance in dealing with their affairs.

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An exclusive use area is part of the common property that has been allocated for the exclusive use by an owner of a sectional title unit. This can include parking spaces or verandas. 

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