Acts for the exam

Question 1

Your client, a property developer, develops a sectional title scheme for the purposes of selling the individual units therein. One of theunits is let by your client for residentail purposes for five years. Six months after the lease is concluded the flat is sold to a purchase who is registered for VAT and whose main course of business is letting of properties. You are informed that the parties require the transaction to be dealt with as the sale of a going concern. Is this possible? Motivate your answer.

Chapter 1 - 9

Answer 1

No. Both the rental of a property let out for residentail purposes and the purchase price dervied from a subsequent sale of the rental property is exempt from VAT. Residentail letting is an exempt supply. So, notwithstanding the fact that my client is a VAT vendor, the sale of the flat in question which has previously been leased for residentail purposes, is exempt from VAT and does not qualify as a sale of a “going concern”. The purchase of the flat will however be laible for transfer duty on the transaction.

Question 2

Your client, a property developer, owns a large property on which he has installed all necessary services. Your client has fallen on hard times and sells the property to another developer. Advise s to whether in view of the fact that both your client and the purchaser are registered for VAT as far as property development is concerned, the transaction can be dealt with on a zero-rated basis. Motivate your answer.

Chapter 1 - 9

Answer 2

No. The property is not an income-earning activity. Property which is merely capable of being operated as a business does not constitute an income-earning activity. An actual or current operation is required. For this reason the proeprty which will only in future become an income-earning activeity, can not be dealt with on a zero-rate basis.

Question 3

Briefly discuss the difference between “zero-rating” and “VAT exempt” in terms of the Value Added Tax Act 89/1991. [4]

Chapter 1 - 10

Answer 3

1) If a transaction is VAT exempt, it falls outside of the “VAT net” altogether. Accordinghly tranfer duty is payable on the transaction. The position is therefore the same as if the seller was never registered for VAT.
2) If a transaction is zero-rated, it still falls within the “VAT net” and all the provisions relating to VAT apply to the transaction, including the provision that the purchaser can still claim input tax credits in respect of the property concerned. Only the rate is 0% instead of 15%

Question 4

Exan Question : A conducts the businesss of a panel beater on erf 200 Barkley West. Erf 200 is registered in the name of A under Deed of transfer R1711/1992.

A Sold the business including the immovable property to B as a going concern. Both A and the purchaser are registered as vendors in terms of the VAT Act 1991. The going concern consists of the property, equipment and stock in trade.

1) In order to satisfy the Receiver of the Revenue that VAT at the rate of zero percent is to be charged on this transaction, set out the requirements of section 11(1)(e) of the VAT Act, which are to be incorporated in the deed of sale. [5]
2) What documents are to be lodged with the Revenue Authorities in order to obtain a transfer duty exemption certificate which is to be issued in terms of section 9(15) of the Transfer Duty Act. [4]
3) Draw the clause which is to be inserted in a deed of sale in order to protect the seller in the event of the Revenue Authorities declaring that the sale of the going concern is not of such a nature that the sale will be subject to value added tax charge at zero percent but that the sale is subject to value added tax at the present prescribed rate [3]

Chapter 1 - 13

Answer 4

1)The zero-rate will only be applicable to a transaction if the following requirements have bee met:
a) The seller must be a VAT vendor
b) The purchaser must be a VAT vendor
c) The enterprice must be sold as a going concern
d) The parties must specifically agree in writing that the enterprice is sold as a going concern.
e) The property must consist of an enterprice or a part of an enterprise which is capable of separate operation.
f) The assets necessary for carrying on the income earning activity, must also be disposed of to the purchaser.
2) Note that when this question was asked certain documentation had to be physically submitted and handed in at SARS. An application for trasnfer duty exemption certificate is now effected electroncially through e-filling by completing a form that is specifically generated in accordance with your answers to certain predetermined questions on the e-filing system. No additional documents need be submitted , unless , after you have submitted the application, SARS requests you to submit further documents.
3) “1.1. The parties place on record that:
a) The property is sold as a going concern, being the lease of premises for business purposes.
b)The concern will, on the date of transfer to the purchaser thereof be an income generating enterprise.
c) the consideration for the supply includes VAT at the zero rate
d) the seller is a registered VAT vendor, with VAT registration number 48654654654
e) the purchaser is a registered VAT vendor, with VAT registration number : 45446465

1.2. If the South African Revenue Service rules that this transaction does not qualify for a zero rating, the purchaser will be responsible for the payment of VAT and any penalties thereon, in addition to the purchase price.

Question 5

Exam Question : Johan smith, a vendor, sells his immovable property, including his supermarket which is in the building on the property, to Stephen Gran who is also a vendor. The transaction is regarded as a sale of a going concern.
Draft the clause to be inserted in the deed of sale to satisfy the Revenue Authorities that it is in fact a transaction which will qualify as a going concern and which will qualify for a zero rating. [8]

chapter 1 - 14

Answer 5

“The parties place on record that:
1) The seller is a registered VAT vendor.
2) The purchaser is a registered VAT vendor.
3) The enterprise, which forms part of this sale, is sold as a going concern; and
4) The enterprise will be an income generating enterprise on the date on which the ownership of the enterprise is transferred and that the enterprise is transferred and that the enterprise will remain active and operating until its transfer to the purchaser;
5) That VAT is payable at the zero rate.
If the South African Revenue Service rules that this transaction does not qualify for a zero rating, the purchase will be responsible for the payment of VAT in addition to the purchaser price.”

Question 6

Exam Question : A property on which an office block has been erected is sold to a purchaser for R1.4Million. Both the seller and the purchaser are registered as vendors for the purpose of VAT. None of the offices are presently let and the purchaser intends to let the offices once he has taken transfer.
Discuss:
1.1. The VAT implications in respect of the sale [4]
1.2. The transfer duty implications of the sale. [2]
1.3. List the documents which must be submitted to the Receiver of Revenue to obtain a transfer duty exemption certificate, if transfer duty is not payable. [4]

Chapter 1 - 17

Answer 6

1.1 The seller and purchaser are both registered vendors and if the sale of the property forms part of the seller’s enterprise, VAT is payable. The enterprise is not an income producing one at the time of the sale, or at the time of transfer, and therefore VAT is payable at the standard rate, in other words 15%.
1.2 As the transaction is subject to Value Added Tax, no transfer duty is payable.
1.3 An application for transfer duty exemption certificate is now effected electronically through e-filing by completing a form that is specifically generated in accordance with your answer to certain predetermined questions on the e-filling system. No additional documents need to be submitted, unless, after you have submitted the application, SARS requests you to submit further documents.

Question 7

Exam Question : Your client, the seller, Big deal CC, is a registered VAT vender for the purposes of VAT and owns a commercial property being an office block which he lets to tenants for business purposes. The property is sold to a purchase, Small Fry CC, also a registered vendor. The building is fully let, and the tenants will remain in occupation after the transfer. The selling price if R1 000 000.00
Discuss:
1.1. The VAT implications in respect of the sale [9]
1.2. The transfer duty implications of the sale. [1]
1.3. List the documents which must be submitted to the Receiver of Revenue to obtain a transfer duty exemption certificate, if transfer duty is not payable. [5]

Chapter 1 - 17

Answer 7

1.1 The seller and purchaser are both registered vendors and the property forms part of the seller’s enterprise. The enterprise is an income producing one, both at the time of sale and transfer. The transaction may therefore be a zero-rated for Value Added Tax purposes.

The zero-rated will only be applicable to a transaction if the following requirements have been met:

a) The seller must be a VAT vender
b) The purchaser must be a VAT vendor
c) The parties must specifically agree in writing that:
a. The enterprise is sold as a going concern.
b. The enterprise will be an income earning activity on the date of transfer thereof, and
c. The consideration for the supply includes VAT at the zero rate.
1.2 As the transaction is subject to Value Added Tax (at zero percent) no transfer duty is payable.
1.3 An application for transfer duty exemption certificate is now effected electronically through e-filing by completing a form that is specifically generated in accordance with your answer to certain predetermined questions on the e-filling system. No additional documents need to be submitted, unless, after you have submitted the application, SARS requests you to submit further documents.

Question 8

Exam Question : A client intends acquiring a property for use by him as a dwelling. He seeks your advice as to whether, from a transfer duty point of view it will make a any difference whether he uses a trust or a company as the vehicle with which to purchase the property.

Chapter 1 - 19

Answer 8

There is no difference in the amount of transfer duty payable in respect of a company or a trust as purchaser. this is the position since 1995 - (section 2(7) of the Trasnfer Duty Act has been amneded by the Taxation Amendment Act 37 of 1995 to bring trusts in line with juristic persons). Before that time a trust has been rated at the same rate as a for natureal persons. Sonce 23 February 2011 there is no distinction between the rates for natural persons. Since 23 February 2011 there is no distinction between the rates for natural persons and juristic persons or trusts.

Question 9

Exam Question : A grants an option to B on 5 June 1999 for 5 years to purchase a property for R200 000.00 which was the fair value at that time. B exercised the option on 1 April 2002 by which time the fair value of the property was R250 000.00.

1) What is the date of the transaction? [1]
2) On what amount will transfer duty be paid? Discuss briefly. [3]

chapter 2 - 6

Answer 9

1. 1 April 2002
2. R200 000.00. The transfer duty is calculated on the pruchase price or the value of property as it was when the option was granted.

Question 10

Exam Question : What is Transfer Duty and on what is it levied? You must make specific reference in your answer, to what is included as “property” in terms of the Transfer Duty Act 40 of 1949

Chapter 2 - 9

Answer 10

Transfer duty is a type of tax levied on the value of any property acquired by any person by way of a transaction or in any other way under the Transfer Duty Act for the benefit of the National revenue Fund. Section 2 of the Transfer Duty Act makes provision for the imposition of trnasfer duty on -
1) The value of the property acquired by any person by way of a transaction or in any other manner; or
2) The amount by which any property is enhanced by the renunciation of an interest in or restruction upon the use of disposal of such property.

“Property” means -
a) Land and any fixtures thereon; and also
b) any right in land, excluding rights under a mortgage bond or a lease;
c) a share or interest in a residential property company;
d) a contingent right to any residentail property held by a trust.

Question 11

Exam Question : Your client, A, owns 10 vacant erven which he wishes to sell at R150 000.00 each. He is not a vendor. B, a natural person, approaches A and offers to buy all 10 erven for R10 000 000.00. B intends erecting dwellings on the erven and to sell the properties thereafter. You are instructed to draw a deed of sale and to attend to the registration of transfer. You are instructed to draw a deed of sale and to attend to the registration of transfer. How will you go about the matter to save the purchaser as much as possible regarding transfer duty and the costs of transfer? Motivate your answer briefly. [5]

chapter 2 - 11

Answer 11

I would draw up a separate deed of sale for each and every property and indicate the purchase price in each agreement to be R150 000.00. Then the individual transfer duty payable in respect of each unit will be R0.00 as it falls below the threshold of R750 000.

Question 12

Can a contract in terms of Section 20 of the Alienation of land Act be recorded against attached property.

Chapter 3 - 26

Answer 12

Yes, on condition that the purchaser is aware that the property has been attached.

Question 13

Exam Question : Within which period must a seller apply in terms of section 20 of the Alienation of Land Act to have a contract recorded in the deeds office?

[3]

Chapter 3 - 27

Answer 13

Within 90 days from the date of sale or when the property becomes registrable, or from when the property is registered in the name of the seller who was a purchaser in terms of a contract previously recorded or which should have been recorded.

Question 14

Exam Question : When may a purchaser apply to have a contract recorded in the deeds office?

[2]

Chapter 3 - 27

Answer 14

If the seller has not had the contract recorded, then when the 90 days referred to in section 20 have passed, the purchaser has 14 days within which the purchaser can cancel the sale or if the purchaser elects to abide by the contract, he may at any time after the expiry of the 90 days, apply to record the contract.

Question 15

Exam Question : After a contract has been noted, can a mortgage bond be registered over the property?

[2]

Chapter 3 - 28

Answer 15

Yes. The new bond will, however, not afford much security to the mortgagee as the purchaser is entitled to receive transfer when he has paid the purchaser price even though the mortgagee of the new bond has not yet been paid in full.

Question 16

Exam Question : Discuss the implications of registering a mortgage bond over property which is subject to a recorded contract in terms of section 20 of the Alienation of Land Act. Also set out the ranking clause of such a bond.

[6]

Chapter 3 - 28

Answer 16

Section 20(2)(a) of the Alienation of Land Act empowers the registrar concerned to register a mortgage bond over land in respect of which a contract has been recorded.

In practice the ranking clause of such bond will be worded as follows:

“As a second bond subject to the recordings of a contract in terms of section 20 of the Alientation Act 68 of 1981 in favour of Bob Smith and registered under B123/2013AL”

Section 9(8) of the Act provides that a mortgagee in whose favour a mortgage bond over the land concerned is registered subject to such recording, is deemed to have consented irrevocably and unconditionally to the discharge or release of the land from such bond. It is thus debatable whether a mortgagee will accept land which has been sold under a contract, as security under a mortgage bond.

Question 17

Exam Question : A is the owner of a property. The title deed of the proeprty is endorsed in terms of section 20 of the Alienation of Land Act 68 of 1981 reflecting X as the purchaser.

You receive instructions totransfer the property to B. How will you attend to this instruction?

[5]

Chapter 3 - 29

Answer 17

I shall point out to A that the property was sold to X and enquire whether the agreement with X has been cancelled or not. If that agreement has not been cancelled, A cannot sell the proeprty to B. If the agreement with X has been, or is to be cancelled, application must be made to the registrar of deeds to have the endorsement on the title deed cancelled.

The property can then be transferred to B simultaneously with or after the cancellation of the endorsement.

Question 18

Exam Question : You are instructed to transfer a property to B. The title deed bears an endorsement in terms of section 20 of the Alienation of Land Act, reflecting X as purchaser. May you proceed to register the property in the name of B? Motivate your answer.

[2]

Chapter 3 - 29

Answer 18

No, transfer may only be effected to the purchaser in the contract which has been recorded agasint the title deed of the property. The contract will therefore first have to be called in terms of the Alienation of Land Act, before transfer can be effected to B.

Question 19

Exam Question : What documents have to be lodged in the Deeds Registry for the purpose of recording a contract in terms of Section 20 of the Alienation of land Act?

[2]

Chapter 3 - 31

Answer 19

1) Application and affidavit in terms of Form A.
2) Title deed of the land concerned
3) proof that the land is registrable (If applicable)

Question 20

Exam Question : Would the documents to be lodged for a contract to be registered in terms of Section 20 of the Alienation of land Act differ if there is a bond?

[1]

chapter 3 - 31

Answer 20

No, the consent of the mortgage is not required and the bond does not beed to be lodged.

Question 21

Exam Question : When may a seller not receive a deposit in respect of the purchse proce of immovable property?

[3]

Chapter 3 - 37

Answer 21

For as long as the property sold is not registrable or if sold in terms of a contract, until the contract has been recorded.

Question 22

Exam Question : A is the owner of an erf and has obtained the required consent to subdivide the erf. A sells a portion of the erf to B for R1 000 000.00. The portion is depicted on a sketch plan annexed to the agreement of sale. The diagram in respect of the portion has not yet been approved by the Surveyor General.

You are the conveyancer and A has instructed you to stipulate in the agreement that B must pay the deposit of R100 000.00 (One Hundred Thousand Rand) to him on the date of signature of the agreement. What would your advice be to A?
[6]

Chapter 3 - 37

Answer 22

As the diagram of the property has not been approved by the Surveyor General the property is not registerable and the seller is therefore not entitled to receive the deposit, in terms the Alienation of Land Act. However,

1) The seller may entrust to an attorney or estate agent a consideration to be kept in trust for the benefit of the purchaser in terms of the sale agreement; or

2) The seller may furnish the purchaser with an unconditional and irrevocable guarantee by a banking institution or by a registered insurer in terms of which the amount of the deposit will be repaid to the purchaser on a given date if the transfer has not been registered by then.

Question 23

Exam Question : A has sold a property to B in terms of a “contract” as defined in the Alienation of Land Act. May A accept a deposit on the purchase price on the date of signature? Motivate briefly.

[3]

Chapter 3 - 38

Answer 23

No. The Act prohibits the receipt of a deposit by the seller until the property is registrable and the contract has been recorded. On the date of signature, the contract could not have been recorded.

Question 24

Exam Question : A has lawfully bought a unit in a sectional title scheme which is still to be registered. Discuss all the possibilities that are allowed by law regarding the payment of a deposit on account of the purchase price of the unit in terms of the Alienation of Land Act 68 of 1981.
[5]

Chapter 3 - 38

Answer 24

Section 26(3) makes provision that the provisions of section 26(1) shall not apply under certain circumstance, in other words consideration may be received –
a) If the seller entrusts to a practitioner or an estate agent in his capacity as such a consideration to be kept, for the benefit of the purchaser in terms of that deed of alienation, in the trust account of the practitioner or estate agent; or
b) The seller, before such payment, furnishes the purchaser with an irrevocable and unconditional guarantee by a banking institution or a registered insurer undertakes to repay the said amount to the purchaser if the unit is not registrable.

Question 25

Exam Question : A has bought a dwelling from B in terms of a contract as defined in the Alienation of Land Act. May B accept any payments on account of the purchase price on signature of the agreement. Discuss briefly.

[3]

Chapter 3 - 38

Answer 25

Section 26(1) provides, inter alia, that no person shall by virtue of a deed of alienation that is contract required to be recorded in terms of section 20, receive any consideration until such recording has been effected in the deeds registry.

Question 26

Exam Question : You are approached by Johan Steyn, the owner of 20 simplex flats which were erected and completed in 1982, and situated on two contiguous erven. He instructs you to open a sectional title register in respect of the aforesaid properties.

He further instructs you to collect a 10% deposit from each purchaser, which mount is to be paid over to himself for the purpose of covering the costs of certain renovations which he wishes to complete prior to the opening of the sectional title register. Discuss in light of the provisions of the Alienation of Land Act 1981.

[5]

Chapter 3 - 38

Answer 26

Section 26(1) of the Alienation of Land Act provides that no person shall by virtue of a deed of alienation relation to a unit receive any considerate until such unit is registerable. A unit is registrable as soon as the sectional title register has been opened.
A consideration may, however, be received:

a) If the purchaser entrusts to a practitioner or an estate agent in his capacity as such a consideration to be kept, for the benefit of the seller in terms of that deed of alienation, in the trust account of the practitioner or estate agent; or

b) If the seller, before such payment, furnishes the purchaser with an irrevocable and unconditional guarantee by a banking institution or a registered insurer in terms of which the said banking institution or insurer undertakes to repay the said amount to the purchaser if the erf or unit in not registrable and a recording is not effected within the period specified in the said guarantee.
My client will therefore not be entitled to utilize the deposits to cover the costs of certain renovations to be effected prior to the opening of the sectional title register, unless he arranges guarantees as referred to above.

Question 27

Exam Question : A sold his immovable property to B. B performed in full in terms of the deed of alienation and the land in question has been transferred to him. Six months subsequent to the date of transfer, it was found that the alienation did not comply in certain respects with the provisions of section 2(1) of the Alienation of Land Act, 68 of 1981. Is the transfer susceptible to being set aside or cancelled on this ground? Motivate your answer?

[2]

Chapter 3 - 40

Answer 27

No. Section 28(2) provides that any alienation which does not comply with the provisions of section 2(1) shall in all respect be valid ab initio if the purchaser had performed in full in terms of the deed of alienation or contract and the land in question has been transferred to the purchaser.

Question 28

Exam Question : The provisions of section 29A of the Alienation of Land Act relate to the “Cooling off clause”. The said section does not apply in all cases. List those cases.

[5]

Chapter 3 - 45

Answer 28

1) Wherein the value of the property exceeds R250 000.00

2) Wherein the property was purchased at public auction.

3) Wherein the purchaser is a company, close corporation or a trust

4) Where the purchaser and seller have previously entered into a deed of alienation in respect of the same land on essentially the same terms.

5) Where the purchaser has reserved the right to nominate a person.

6) Where the purchaser is purchasing land by exercise of an option which was open for at least five days.

7) Agricultural land used mainly for commercial farming activities use is expressly excluded.

Question 29

Exam Question : Section 29A of the Alienation of Land Act deals with a purchaser’s right to revoke an offer to purchaser or to terminate a deed of alienation, the “cooling off clause”.
Please furnish your answers and a brief motivate in respect of the following:
1) The property is sold for R100 000.00 to an inter vivos trust of which only natural persons are beneficiaries

[1]

2) John James purchased the property at public auction.

[2]

Chapter 3 - 45

Answer 29

1) A trust is not entitled to the protection afforded by section 29A

2) A natural person who buys a property at a public auction is not entitled to the protection afforded by section 29 of the Act.

Question 30

Exam Question : A woman is married out of community of property and her husband’s marital power was expressly retained in their antenuptial contract registered in 1980. She has sold her property. Must she be assisted by her husband when signing the power of attorney to pass transfer? Motivate briefly.

[2]

Chapter 4 - 3

Answer 30

No. The marital power of husbands was abolished in 1993 when Act 99 of 1984 was amended.

Question 31

Exam Question : Can a spouse, married in community of property, burden immovable property forming part of a joint estate, with a servitude without the written consent of his spouse? Motivate.
[2]

Chapter 4 - 6

Answer 31

No, in terms of Section 15(2)(a) and (b) of the Matrimonial Property Act 88 of 1984, the written consent of the other spouse must be obtained.

Question 32

Exam Question : A property is registered in the name of A and B, married in community of property to each other. Who, in terms of the definition of “owner” in section 102 of Act 47 of 1937, may pass transfer of that property a purchase?

[3]

Chapter 4 - 6

Answer 32

Both spouses or either of the spouses with the written consent of the other must pass transfer

Question 33

Exam Question : Is it necessary that both the husband and the wife, married in community of property sign a power of attorney for the transfer of their property? Motivate your answer/

[1]

Chapter 4 - 7

Answer 33

No, either spouse may sign the power of attorney, provided that the other spouse consents thereto in writing. Such consent must be granted in a separate document in terms of section 15(2) of the Matrimonial Property Act 88 of 1984 and must be lodged as a supporting document.

Question 34

Exam Question : May a power of attorney given by both spouses, who are married in community of property, be attested by a Commissioner of Oaths? Motivate your answer?

[2]

Chapter 4 - 7

Answer 34

Yes, in cases where both spouses sign as grantors in the power of attorney.

However, in those cases where only one spouse acts as grantor, but both spouses sign the power of attorney, the signature of the other spouse will be regarded as a consent, in terms of section 15(2)(a) of the Matrimonial Property Act 88 of 1984, in which case such signature must be attested by two competent witnesses, and not by a commissioner of oaths.

Question 35

Exam Question : Can the consent of a spouse married in community of property to the sale of immovable property forming an asset in a joint estate be given by way of ratification within a reasonable time after the act concerned? Motivate your answer.

[4]

Chapter 4 - 8

Answer 35

Yes, in terms of section 15(4) of act 88 of 1984, the consent required to contract in terms of section 15(2)(b) may be given by way of ratification within a reasonable time after the act concerned.

Question 36

Exam Question : John Brown and Sue Brown are married in community of property. John is a speculator in property. May he lease a property in the course of his business without is spouses ’s consent?

[2]

Chapter 4 - 8

Answer 36

Yes, section 15(6) allows for this.

Question 37

Exam Question : Your client, Gary, who is married in community of property to Sandra, has sold his land to Colin who is married in community of property to Lisa. The land is sold in terms of a contract as defined in section 1 of the Alienation of Land Act 68 of 1981. Discuss whether Sandra and Lisa must consent to the entry into the contract.

[3]

Chapter 4 - 12

Answer 37

Sandra will be required to consent in writing to the entering into of the contract by Gary as seller, as section 15(2)(b) of the Matrimonial property requires the written consent of the spouse in a marriage in community of property where the other spouse enters into a contract for the alienation of immovable property.
It will also be required that Lisa consents in writing to the entering into if the contract by Colin, as purchaser. A spouse married in community of property may not without the written consent if the other spouse enter into a contract defined in the Alienation of Land Act as a purchaser – (section 15(2)(g))
The consent required may, except where it is required for the registration of a deed in a deeds registry, also be given by way of ratification within a reasonable time after the act concerned.

Question 38

Exam Question : May a person married in community of property bind himself as surety for his life-long friend without further ado? Motivate briefly?

[2]

Chapter 4 - 12

Answer 38

No, unless his/her spouse consents thereto.

Question 39

Exam Question : John Brown and Sue Brown are married in community of property. John and Sue are the registered owners of Erf 1234 Hillside.

John’s brother, Harry Brown, owes Best Bank Ltd the sum of R100 000.00. John has agreed to bind himself as surety, but the bank also requires the additional security of a mortgage over Erf 1234 Hillside What will be required from Sue?

[2]

Chapter 4 - 12 to 13

Answer 39

Sue must consent to her husband binding himself as surety and also consent to the registration of the bond attested by two witnesses or join her husband in passing the bond.

Question 40

Exam Question : John Brown and Sue Brown are married in community of property. John and Sue are the registered owners of Erf 1234 Hillside. Assume that Sue sold the property without her husband’s consent and that the purchaser was reasonably unaware of Sue’s matrimonial status and did not know that the consent of Sue’s spouse might be necessary. Is the transaction binding?

[2]

Chapter 4 - 14

Answer 40

Yes, in terms of section 15(9)(a) the consent is deemed to have been given if the third party does not know and cannot reasonably know that consent was required for such transaction.

Question 41

Exam Question : When a spouse withholds the consent referred to in section 15(2) of the Matrimonial Property Act of 1984 or when that consent cannot for any other reason be obtained, what can the other spouse do?

[2]

Chapter 4 - 14

Answer 41

A court may on application by the other spouse give him/her leave to enter into the transaction without the required consent, if the court is satisfied that the consent is withheld and such withholding is unreasonable or in any other case that there is good reasons to dispense with such consent.

Question 42

Exam Question : The Matrimonial Property Act 88 of 1984 requires the consent of a spouse in certain cases where the other spouse signs a document required for one or other act of registration in a deed office. The spouses must obviously be married in community of property. State whether such consent will be required in the following cases and motivate briefly (the husband and wife will be referred to as “H” and “W”)

1) H has signed a contract to purchase a property. The agreement constitutes a contract as defined in the Alienation of Land Act of 1981. [2]

2) The property owned by H and W is mortgaged in favour of an individual. H and the mortgagee agree to amend the bond in the following respects:
a. The period for repayment is extended by a further five years; [2]
b. The amount of the bond is increased form R50 000.00 to R60 000.00; [2]

3) H and W own three properties under one title deed. W signs an application for the issue of a Certificate of Registration Title in respect of one of the properties. [2]

4) Must a power of attorney to pass transfer of a property registered in the name of H and W, be signed by H and W? [2]

chapter 4 - 16

Answer 42

1) Yes, the consent of W is required. Section 15(2)(g) expressly requires this.

2)
a. No, this is not in contravention of section 15(2). Either spouse can agree to the variation of the period of payment.
b. No, the consent is not required, as section 3(1)(s) prohibits the amount of the bond from being increased. However, if the amount is increased by way of registration of a further bond, consent of W must indeed be obtained – Section 15(2)(a)

3) H need not consent. No alienation or hypothecation of the property is taking place. It is therefore not in contravention of section 15(2).

4) No, either spouse may signed the power of attorney before two witnesses, provided that the other spouse must consent thereto in writing before two witnesses – section 15(2)(a)

Question 43

Exam Question : In terms of section 15(2) of the Matrimonial Property Act 88 of 1984 neither spouse may perform certain juristic acts without the consent of the spouse. Is the consent of the other spouse required where of the spouses:
1) Applies for a certified copy of a lost title deed; [1]

2) Applies in terms of section 4(1)(b) of Act 47 of 1937 for the amendment of his identity number in a title deed; [1]

3) Purchases a property in terms of contract as defined in the Alienation of Land Act 68 of 1981; [1]

4) Transfers property as fiduciary to ascertained fideicommissaries during his lifetime; [1]

5) Waives a right to a valuable usufruct.[1]

Chapter 4 - 16 to 17

Answer 43

1) No
2) No
3) Yes
4) No
5) No

Question 44

Exam Question : Section 15(2) of the Matrimonial Property Act 1984, specifies certain acts which a spouse who is married in community of property may not perform without the written consent of the other spouse. Is such consent required in the following instances:
1) The granting by one of the spouses of a power of attorney to pass transfer of immovable property [1]
2) The signature by one of the spouses of a deed of sale which formed the basis of the transaction described in 4.1 above [1]
3) The signature by one of the spouses of a deed of suretyship in the ordinary course of that spouse’s business [1]

Chapter 4 - 17

Answer 44

1. Yes the prior written consent of the other spouse is required in terms of section 15(2)(a) of the Matrimonial Property Act.
2. Yes the written consent of the other spouse is required in terms of section 15(2)(b) of the Matrimonial Property Act.
3. If it is only an underhand suretyship, the consent of the other spouse is not required. However, if it is a surety bond that is to be registered in the deeds registry, the prior written consent of the other spouse is required in terms of section 15(2)(a) of the Matrimonial Property Act.

Question 45

Exam Question : A died intestate on 28 April 2021. Who will be entitled to inherit in the following circumstances and what will the division be?
1) He is survived by his wife and three children. The marriage was out of community of property and the balance for distribution is R460 000.00 [4]
2) He was a bachelor and is survived by his father, his two brothers and two children of his sister. His sister died in 2018. The balance for distribution is R425 000.00 [4]
3) He was married out of community of property and is survived by his wife, one child born from that marriage, an adopted child and a stepchild, being the child of his wife from a precious marriage. The balance for distribution is R625 000.00. [4]

Chapter 5 - 15

Answer 45

1. The surviving spouse will receive R250 000.00 or a child share, whichever is the greatest. In other words, R250 000.00.

Each of the three children will share equally in the remainder of the money and will (R210 000.00 divided by 3) therefore receive R70 000.00 each.

2. A’s father will receive half – R212 500.00.
   A’s brother’s will receive a third of a half share each – R70 833.33
   A’s sister’s children will each receive a half share of R70 833.33 being R35 416.66
3. The surviving spouse will receive R250 000.00 or a child share (R208 333.00), whichever is the greatest. In this case, it would R250 000.00.

The child born from the marriage and the adopted child will be entitled to receive R187 500.00 each. The step child will not be entitled to inherit.

Question 46

Exam Question : Peter Smith is the owner of the farm Roodewal, in extent 1000 (one thousand) hectares. The property is subject to the following condition contained in the will of his grand-father who died in 1934, namely:

“I bequeath my farm Roodewl to my son Jan subject to the condition that after his death, the farm shall devolve from generation to generation so that it will never fall into strange hands.”

The is “agricultural land” as defined in Act 70 of 1970. Jan died in 1960 and peter was his only child. Peter, however has 4 children and fears that in his death, the farm can not be transferred to his children. He also wants to know what rights his children will have should they be able to take transfer.

Chapter 6 - 5

Answer 46

I will advise peter that the provisions of the subdivision of Agricultural land Act 70 of 1970, do not apply in respect of the transfer of the farm to his four children as the testator died before 1971 and furthermore that the fideicommissum terminates when the farm is transferred to his children. These children will then each be entitled to deal with his or her one quarter share.

Question 47

Exam Question : A is the owner of a property which is agricultural land as defined in Act No. 70 of 1970.
1. May A sell a portion of his property to b subject to the suspensive condition that the Minister’s consent to subdivision be obtained? Motivate your answer briefly. [1]
2. May A register a life usufruct over his property in favour of his father and mother who are married out of community of property? Motivate your answer briefly.

chapter 6 - 8 to 9

Answer 47

1. No. The definition of sale/sold, includes a sale subject to a suspensive condition and is thus a violation of section 3(e) of the subdivision of Agricultural Land Act
2. No. Section 6A of the Subdivision of Agricultural Land Act only allows for the registration of a life-long usufruct over agricultural land if it is in favour of a person and his spouse, or the survivor of them, who are married in community of property to each other, without the consent of the Minister.