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Lake Properties, Cape Town is a young and dynamic real estate agency located in Wynberg, Cape Town. We offer efficient and reliable service in the buying and selling of residential and commercial properties and vacant land in the Southern Suburbs including Bergvliet,Athlone,Claremont,Constantia,Diepriver,Heathfield,Kenilworth,Kenwyn,Kreupelbosch, Meadowridge,Mowbray,Newlands,Obervatory,Pinelands,Plumstead,Rondebosch, Rosebank, Tokia,Rondebosch East, Penlyn Estate, Lansdowne, Wynberg, Grassy Park, Steenberg, Retreat and surrounding areas . We also manage rental properties and secure suitably qualified tenants for property owners. Another growing extension to our portfolio of services is to find qualified buyers for business owners who want to sell businesses especially cafes, supermarkets and service stations. At Lake Properties we value our relationships with clients and aim to provide excellent service with integrity and professionalism, always acting in the best interest of both buyer and seller. Our rates are competitive without compromising quality and service. For our clients we do valuations at no charge

How will my estate be wound up if I pass on without being in a formal marriage. What will happen if I have children.

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In South Africa, when a person passes away without a valid will, their estate is handled according to the Intestate Succession Act 81 of 1987. Since you are not in a formal marriage, the law will distribute your estate in a specific order. Here’s a detailed breakdown of what will happen:


1. Your Children Will Inherit First

If you have biological or legally adopted children, they will inherit your estate in equal shares.

  • If you have one child, they inherit everything.
  • If you have multiple children, they each get an equal portion.
  • If a child has passed away before you, their share will go to their children (your grandchildren).

Minors & the Guardian’s Fund

If any of your children are under 18, their inheritance will be held in the Guardian’s Fund, which is managed by the Master of the High Court.

  • The money will be kept until they turn 18 years old.
  • The appointed guardian can apply for funds to cover the child’s living and education expenses.

2. What If You Have a Life Partner? (Unmarried Relationship)

South African law does not automatically recognize unmarried life partners as heirs under intestate succession.

  • If you do not have a will, your partner will not inherit anything.
  • The only way your partner can inherit is if you have a valid will naming them as a beneficiary.

Maintenance Claim for a Surviving Partner

If your partner was financially dependent on you, they may be able to claim maintenance from your estate under the Maintenance of Surviving Spouses Act, but this is not guaranteed and requires a legal process.


3. If You Have No Children

If you do not have children, your estate will pass to:

  1. Your parents (if they are alive).
  2. If your parents are deceased, then to your siblings.
  3. If you have no siblings, it will go to extended family members (grandparents, aunts, uncles, cousins).
  4. If no living relatives are found, your estate will go to the state (government).

4. Other Important Aspects

Customary or Religious Marriages

  • If you were in a customary marriage (under African Customary Law), and it was registered, your spouse may inherit.
  • If your relationship was based on religious marriage (e.g., Muslim or Hindu marriage) but was not legally registered, your spouse may not automatically inherit.

Cohabitation Agreements

If you and your partner have a cohabitation agreement, it may help them claim certain assets, but it will not override intestate succession laws.


5. What Should You Do?

Draft a Will

To ensure your estate is distributed according to your wishes, you should create a valid will. This allows you to:
✔ Leave assets to your partner, children, or other loved ones.
✔ Prevent unnecessary legal battles.
✔ Appoint a guardian for minor children.
✔ Avoid delays in winding up your estate.

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What is prescription and how does it apply in terms of South African law.

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In South Africa, prescription concerning property refers to the process through which a person can acquire ownership or rights over a property after having continuously used or occupied it for a specified period of time. It can also be the process through which a person loses their rights or claim to property. This principle is especially relevant in land law and is governed by the Prescription Act 68 of 1969.

The concept of prescription in relation to property falls into two main categories: acquisitive prescription (where a person gains ownership or a right over property) and extinctive prescription (where a person loses their rights to property).

1. Acquisitive Prescription (Gaining Ownership of Property)

Acquisitive prescription allows a person to obtain ownership of property if they have continuously and undisturbed possession of the property for a specified period, even if they are not the original owner. This is an important legal principle that can provide a mechanism for acquiring land or property rights without the formal transfer of title.

  • Period for Acquiring Ownership: Under South African law, the general period for acquiring ownership of immovable property (land or buildings) through acquisitive prescription is 30 years.

  • Requirements for Acquisitive Prescription:

    1. Continuous Possession: The person must be in continuous possession of the property, meaning that they are physically using and enjoying the property without interruption.
    2. Open and Public Possession: The possession must be public and not hidden, meaning that the possessor must not try to conceal their possession.
    3. Without Consent: The possession must be without the consent of the rightful owner. If the possessor has been using the property with the owner's consent, prescription cannot occur.
    4. Exercising Rights of Ownership: The possessor must behave as if they are the owner of the property, such as paying municipal taxes, making improvements to the property, or using the property for the purposes of an owner.
    5. Adverse Possession: The possession must be adverse, meaning it is not in agreement with the true owner’s rights, and it must be against the owner’s interests.

Once the 30-year period has passed and the above conditions are met, the person who has possessed the property can apply to a court to have their ownership formally recognized, thereby acquiring legal ownership of the property.

2. Extinctive Prescription (Losing Property Rights)

Extinctive prescription involves the loss of rights over property due to non-exercise of those rights within the prescribed period. In this case, the owner of the property may lose their rights to it due to not actively protecting or asserting their claim to the property for an extended period.

  • Period for Extinctive Prescription: The period for the extinction of rights to property or a claim to property is generally 30 years in South Africa. If the rightful owner does not take legal action to assert their rights within this period, their claim may be extinguished.

For example, if someone has been using someone else's land for an extended period without objection from the owner, and the owner does not take steps to assert their ownership rights within 30 years, the possessor may acquire ownership through acquisitive prescription. Alternatively, the owner may lose their right to evict the possessor or reclaim the property after this period.

3. Prescription of Ownership Rights to Movable Property

The prescription period for acquiring ownership of movable property (e.g., vehicles, personal goods) is generally shorter than for immovable property, typically three years. The same conditions apply regarding continuous, open, and adverse possession.

4. Interruptions and Suspensions of Prescription

Certain events may interrupt or suspend prescription. For instance, if the owner of the property becomes aware of the adverse possession or if the possessor’s occupation is disturbed, prescription may be interrupted, meaning the prescribed period will be extended or reset.

5. Exceptions and Limitations

  • Fraud: If the property was obtained through fraudulent means, prescription may not apply. The rightful owner may reclaim the property, regardless of the length of possession by the other party.
  • Public Land: Prescription may not apply to public land or property owned by the state. The state can retain its rights to public land despite prolonged possession by others.

6. The Role of the Courts

When acquisitive prescription is claimed, the person seeking ownership through prescription must apply to the court for confirmation of their ownership rights. The court will assess whether the conditions for acquisitive prescription have been met, including the period of possession and the nature of the possession.

Conclusion

Prescription in property law in South Africa serves as both a method of acquiring ownership of land and a means by which the rights of the true owner can be extinguished if they do not assert their claim within the prescribed time. This ensures certainty and stability in land ownership, but it also emphasizes the importance of timely action to assert and protect one’s property rights.



Can the state confiscated your house in South Africa

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In South Africa, the state cannot simply confiscate your house without following due process, and any action taken to seize property must be based on specific legal grounds and procedures. Let's break down the various circumstances under which the state might take control of a property, and the protections available to property owners.

1. Unpaid Taxes or Debts (State Debt Collection)

If a property owner owes money, such as unpaid property taxes, mortgage debt, or other types of outstanding liabilities, the state or creditors can take legal action to recover the owed amounts. Here’s how the process typically works:

  • Property Taxes: Local municipalities collect property rates and taxes. If these are unpaid for a certain period, the municipality can take steps to recover the debt. This process may include placing a lien on the property, meaning the municipality has a legal right to claim the property if the debt isn’t paid.

  • Repossessions for Unpaid Debts: If you have an outstanding mortgage or other loans secured by your property, the lender (often a bank) may initiate legal proceedings to repossess and sell the property through an auction to recover the debt. This process involves a court order after a legal process.

  • Legal Process: The creditor must first obtain a court order for repossession. The court action includes notifying the debtor, and there will be opportunities for the debtor to settle the debt or contest the claim. If the property is repossessed, it is auctioned to satisfy the debt.

2. Expropriation for Public Use

The South African government has the power to expropriate property for public use, which is a form of land acquisition for purposes such as:

  • Infrastructure development (roads, public buildings, etc.).
  • Land reform programs aimed at redistributing land to address historical inequalities.
  • Public health or safety projects.

This process is governed by the Expropriation Act and must follow strict legal requirements:

  • Fair Compensation: When land or property is expropriated, the owner must be offered just and equitable compensation. The amount of compensation is based on the market value of the property at the time of expropriation, and other factors like the use of the property and its social and economic value.

  • Legal Process: Expropriation must be carried out in a transparent and lawful manner. The government cannot simply seize property without following legal procedures, and the property owner can appeal the expropriation if they believe the process or compensation is unjust.

  • Public Interest: The government must prove that the expropriation is in the public interest, meaning that it benefits society as a whole (e.g., for infrastructure or land reform). The expropriation cannot be for private or personal gain.

3. Abandoned or Derelict Properties

If a property is abandoned, left in disrepair, or poses a risk to public health or safety (such as an unsafe building), local authorities may take action. This is more common in areas with high levels of urban decay. However, the state does not simply seize the property without a legal process:

  • Municipal Action: Local governments can place notices on the property to inform the owner of the derelict condition or abandonment. They will typically attempt to contact the owner to remedy the situation.

  • Legal Procedures: In extreme cases, local authorities may apply for a court order to force the property owner to repair the building, pay for any necessary renovations, or sell the property. If the property owner does not respond to these legal actions, the property may be taken over for public use.

4. Criminal Proceeds (Asset Forfeiture)

The South African government has legal mechanisms to confiscate property linked to criminal activity. The Asset Forfeiture Unit (AFU), operating under the Prevention of Organised Crime Act (POCA), can seize property that is suspected to be derived from criminal conduct, such as money laundering, drug trafficking, or other illegal activities.

  • Legal Process: The state must follow legal procedures and obtain a court order to seize the property. Property can only be forfeited if it is proven to be connected to criminal activity, either through direct evidence or if the property owner cannot prove that the property was obtained legally.

  • Asset Forfeiture: Once a property is linked to criminal activities, the state can confiscate and sell the property to recover the proceeds of crime. The property owner has the right to challenge the forfeiture in court, and the process requires clear proof of criminal activity.

  • Criminal Conviction: In many cases, the property forfeiture is tied to a criminal conviction. The property owner’s involvement in criminal activities must be proven before confiscation can occur.

5. Failure to Pay Municipal Levies

Municipal levies and rates are a form of tax collected by local governments to fund services. If property owners fail to pay these levies:

  • Municipal Repossession: After repeated failure to pay, municipalities can auction the property to recover the outstanding debts. This process involves sending notices to the property owner and allowing time for payment.

  • Legal Requirements: The municipality must follow proper legal procedures, including notifying the owner and providing them with the opportunity to settle the debt before resorting to property auction. The local municipality may place the property for sale in an effort to recover the outstanding levies.

6. Protection of Property Rights in the Constitution

The South African Constitution (Section 25) guarantees property rights, meaning that the government cannot seize your property arbitrarily. Any deprivation of property, including expropriation or confiscation, must be:

  • Lawful: It must be in accordance with the law.
  • For a Public Purpose: There must be a legitimate reason, like public interest, land reform, or national security.
  • Compensation: The property owner must be fairly compensated if the government expropriates property.

What Does This Mean for Property Owners?

While the state does have certain powers to take control of a property under specific circumstances, there are legal safeguards to protect property owners. If the state attempts to expropriate or seize property, it must follow due process as outlined by law.

  • Property owners can challenge these actions in court if they believe the confiscation is unjust, unlawful, or improperly executed.
  • If the government seeks to expropriate property for public use (e.g., infrastructure or land reform), it must provide fair compensation.
  • Property owners have legal avenues to contest actions such as repossession or asset forfeiture, especially if they believe they have been unjustly targeted.

Conclusion

In summary, while the state can confiscate or seize property in South Africa under certain legal circumstances (such as unpaid debts, expropriation, criminal activity, or unpaid municipal rates), these actions must follow legal procedures and are subject to court oversight. Property owners are protected by the Constitution and can contest illegal actions or unfair treatment through the courts. If you face a potential threat of losing your property, it is essential to seek legal advice to understand your rights and options in that situation.

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Would buying a house that is in trust have some advantages or does it not make any difference all, in South Africa

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Buying a House in a Trust in South Africa – Advantages & Disadvantages

Purchasing a property that is held in a trust in South Africa can be beneficial in some cases, but it also has its challenges. Whether it’s a good idea depends on your financial goals, estate planning needs, and tax considerations. Below is a detailed analysis of how trusts work in real estate transactions in South Africa.


1. What is a Trust and How Does it Work in Property Ownership?

A trust is a legal entity that holds assets on behalf of beneficiaries. It is managed by trustees according to the terms set out in a trust deed. There are different types of trusts used in property transactions:

  • Inter Vivos (Living) Trust: Created during the founder’s lifetime and commonly used for asset protection and estate planning.
  • Testamentary Trust: Established through a will after the founder’s death, often to provide for minor children or dependents.
  • Business Trusts: Sometimes used for property investment purposes, but they have specific legal and tax considerations.

When buying a property held in a trust, you are not dealing with an individual seller but rather the trust, which may require trustee approval and compliance with trust laws.


2. Advantages of Buying a Property in a Trust in South Africa

A. Asset Protection from Creditors

  • If you own property personally and face financial difficulties, creditors can attach your assets, including your home.
  • A house in a trust does not belong to any individual but to the trust itself, meaning it is generally protected from personal debt claims and liquidation.

B. Estate Planning & Avoidance of Probate

  • When an individual passes away, their estate must go through the Master of the High Court’s process (probate), which can take months or even years.
  • A house in a trust bypasses this process, ensuring that beneficiaries receive the asset more smoothly without the risk of delays.
  • Trust-owned properties do not form part of the deceased estate, which means no estate duty tax (currently 20%–25%) is payable on the value of the property.

C. Potential Tax Benefits

  • While trusts are taxed at a flat 45% rate on income and 36% effective rate on capital gains, there is a way to reduce tax liability.
  • Trustees can distribute income and capital gains to beneficiaries, who are taxed at their individual rates, potentially lowering the overall tax burden.
  • If structured properly, the trust may help in reducing the tax impact on rental income and capital gains.

D. Continuity & Succession Planning

  • Unlike individually owned properties, a trust allows seamless succession planning since ownership does not change upon death.
  • This is beneficial for families looking to preserve generational wealth without the hassle of transferring property ownership after each death.

E. Multiple Ownership & Joint Investment

  • A trust makes it easier for multiple individuals (such as family members or business partners) to collectively own a property without having to structure complicated ownership agreements.
  • The property remains under trust control, ensuring disputes among individuals do not disrupt ownership.

3. Disadvantages of Buying a Property in a Trust in South Africa

A. Higher Taxation

  • Trusts pay higher tax rates than individuals:
    • Income tax: 45% (compared to a sliding scale of up to 45% for individuals)
    • Capital Gains Tax (CGT): 36% (compared to 18% for individuals)
  • This makes trusts less tax-efficient unless trustees distribute income to beneficiaries in lower tax brackets.

B. Loss of Direct Control

  • Once a house is in a trust, it is managed by trustees who must follow the trust deed.
  • The person who set up the trust (the founder) cannot make unilateral decisions about selling, renting, or transferring the property.
  • Trustees must approve all transactions, which can slow down decision-making.

C. Complicated Financing & Mortgage Issues

  • Banks and financial institutions are hesitant to grant home loans to trusts.
  • When lending to a trust, banks usually require:
    • Personal surety from trustees (meaning they must personally guarantee the loan).
    • Larger deposits (usually around 20%–30%).
    • Stricter lending criteria, as banks see trust-owned properties as higher risk.

D. High Setup and Administration Costs

  • Setting up a trust involves legal and administrative fees, including:
    • Attorney fees for drafting a trust deed.
    • Annual compliance costs (accounting and tax submissions).
    • Trustees’ fees (if independent trustees are used).
  • These costs can make owning a property through a trust more expensive than direct ownership.

E. Potential for Abuse & Complexity in Management

  • Some people misuse trusts to evade taxes, leading to increased scrutiny from SARS (South African Revenue Service).
  • Poorly managed trusts can lead to family disputes, especially if beneficiaries feel they are not getting fair treatment.
  • Trustees have a fiduciary duty to act in the best interest of the beneficiaries, meaning they cannot always follow the wishes of the person who set up the trust.

4. When is Buying a House in a Trust a Good Idea?

Purchasing a property in a trust can be a smart move if: ✔️ You want to protect assets from creditors.
✔️ You plan to pass the property on to future generations without going through probate.
✔️ You want to own property collectively with family members or business partners.
✔️ You have a high-value estate and want to minimize estate duty tax.
✔️ You can distribute trust income efficiently to beneficiaries in lower tax brackets.


5. When is Buying a House in a Trust NOT the Best Option?

It may not be ideal if: ❌ You want full control over the property.
❌ You need a home loan, as banks have stricter lending rules.
❌ You are not concerned about estate duty (for estates below R3.5 million, estate duty savings are minimal).
❌ You want lower tax rates, as individual ownership offers better tax treatment.


Conclusion: Should You Buy a Property in a Trust in South Africa?

Whether or not you should buy a house in a trust depends on your financial goals, family situation, and long-term plans.

  • If asset protection, estate planning, and multi-generational wealth are priorities, a trust makes sense.
  • If tax efficiency and personal control are more important, individual ownership may be better.

To make the best decision, consult a real estate attorney, tax advisor, or trust specialist who can guide you based on your personal circumstances.

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Is buying a house for cash any different from buying a house with a bond in South Africa

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Yes, buying a house for cash in South Africa is quite different from purchasing one with a bond (home loan). Here are the key differences:

1. Process & Timeframe

  • Cash Purchase: The process is generally faster since there's no need for bank approval. You only need to pay the purchase price, and the transfer process can be completed in 6–8 weeks (depending on legal procedures).
  • Bond Purchase: The process takes longer because it involves applying for a mortgage, getting credit approval, and meeting bank requirements. This can add 4–6 weeks to the timeline.

2. Costs Involved

  • Cash Buyers: You save on bond-related costs like bond registration fees and interest payments. However, you still pay transfer duty (if applicable) and conveyancing fees.
  • Bond Buyers: Additional costs include bond registration fees and monthly interest payments, making the property more expensive over time.

3. Affordability & Financial Considerations

  • Cash Buyers: You own the house outright and don’t have to worry about monthly repayments or interest. However, tying up a large sum of money in one asset can limit liquidity.
  • Bond Buyers: Financing allows you to buy property without having all the money upfront, but you pay significantly more due to interest over the years.

4. Negotiation Power

  • Cash Buyers: Sellers may prefer cash buyers because the sale is quicker and more certain, potentially giving you room to negotiate a lower price.
  • Bond Buyers: The seller may choose another buyer if there are delays or complications in securing the bond.

5. Risk & Ownership Security

  • Cash Buyers: You fully own the house from day one, reducing financial risk and avoiding repossession threats.
  • Bond Buyers: If you fail to make repayments, the bank can repossess the property.

6. Credit Score Impact

  • Cash Buyers: No impact on your credit score, since no loan is taken.
  • Bond Buyers: Taking a bond and making regular payments can improve your credit score over time.

7. Investment Considerations

  • Cash Buyers: If you have the capital, you may consider investing some of it elsewhere rather than putting it all into one asset.
  • Bond Buyers: Some people prefer to use a bond for leveraging their money, especially if they plan to invest in multiple properties.

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Difference between a unit or section in a sectional title complex

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