Wednesday, April 16, 2014

April Newsletter published

Our April newsletter has been published. Click on the image to enlarge it and read or scroll down for more information about the topics.

Property sales to foreigners

We’re not hoping to sell real estate any time soon to Martians, but want to explain the process selling property to foreign citizens or companies, otherwise known as aliens.

Illegal Aliens

There are procedures and requirements that must be complied with in certain circumstances. For instance, sales to illegal aliens are prohibited ie the person or company must be legally established in South Africa. Foreign companies need to be locally registered to qualify and non-residents staying for longer periods may have to apply for a residence permit in terms of the Aliens Control Act.  Other than that you are good to sell to an Alien.. If you dare! If you or your buyer is a foreign company our offices are able to help in getting that company locally registered with our Registrar of Companies to qualify. Where shares in a company are owned by a non-resident, a South African officer for the company also needs to be appointed.

Mortgage Bonds

Cash is good, but if a mortgage bond is required to finance a foreign purchase, no more than 50% of the purchase price may be bonded. Money brought into the country to acquire property may also be taken out again provided at the time of repatriation the full records of the funds coming in need to be retained and supplied. Please check compliance requirements with our offices.

Franchises under the Consumer Protection Act

In practice the Consumer Protection Act, since implementation in 2011, has not had the effect of levelling the playing fields between franchisees and franchisors, according to Ben Whitelaw, writing in De Rebus the Attorneys' magazine this month.

Franchise agreements are generally entered into between two business entities who are informed and ought to take their agreement more serioulsy than a casual consumer purchasing goods in a store - the parties are able to contract and may agree to terms which favour the franchisor. The Consumer Protection Act in general protects consumers who may be uneducated and the law helps them more than the Act helps franchisees who may be sufferring from limits and procedures laid down by the franchisor.

Disclosure document

One area in which the franchisee is protected is the requirement that the franchisor furnish a prospective franchisee with a disclosure document - this sets out full information that would be material to the franchise and enables the prospective franchisee to make a more informed decision whether to go the franchise route or not.

Franchise agreements can be quite complex and require legal interpretation and it is always a wise move to consult your attorney for the correct legal advice before signing into one. Mc Naught and Company are on hand to guide you through this process and reduce the risks of taking on obligations you perhaps did not understand.

Re-arranging debt

The National Credit Act, 2005, makes provision for people who are in debt to re-arrange their debt following a set plan of action and payments. Generally the debt can be "frozen" so that court cases regarding the debt come to a halt and a repayment plan is approved in which each creditor gets a pro-rata repayment over a period of time as set out in the repayment plan.

A recent court case heard by the Appeals court however referred a matter back to the Magistrates Court for a re-think after the lower court included car repayments in the repayment plan. This was a case involving the Motor Finance Corporation (Pty) Ltd who were successful in their appeal and required the Magistrate to consider the re-possession of the vehicle, payments for which had fallen into arreas, rather than including the motor vehicle payments in the new repayment plan. ie re-possess and sell the car you can't afford rather than think you can keep the car and pay the motor finance company over a longer period.

The lesson to be learned is to be careful when entering into debt or lending anyone money so that you can be sure the repayments in the future will be made. Durban Skyye blogspot