Even when a written and signed document isn’t required, it is always wise to insist on one.  Note that parties themselves can require a document to be in writing and signed.  Or it could be required by law.  The most common examples of the latter are property sale agreements, Wills, suretyship agreements, ante-nuptial contracts, and credit agreements.  There are other less common examples, when in doubt seek professional advice.

It is however, not always that easy to achieve.  COVID-19 lockdown, has highlighted the challenges of getting everyone together for an old-fashioned original “paper and ink” signing session.  Even when social distancing is no longer required and ceases to be the societal norm, the convenience and benefits of being able to sign documents remotely are obvious.

Firstly, when is a digital agreement “in writing”; and can property sales and wills be electronic?

Fortunately our law, in the form of the ECTA (Electronic Communications and Transactions Act) recognises the general validity of digital documents. A “document or information” is “in writing” if it is –

• “In the form of a data message; and
• Accessible in a manner usable for subsequent reference.”

As a result, perfectly valid and enforceable agreements are now often entered into online, by email, WhatsApp and the like.

Note that there are some specific exceptions where a physical (“wet ink on paper”) as opposed to an electronic format is still required – most commonly property sale agreements, “long” (10 or more years) leases and wills (there are others – take advice in doubt).

Secondly, is “signature” always required?

Formal “signature” isn’t always essential as the ECTA provides that if the parties to an electronic transaction don’t specifically require an electronic signature, “an expression of intent or other statement is not without legal force and effect merely on the grounds that –

• It is in the form of a data message; or
• It is not evidenced by an electronic signature but is evidenced by other means from which such person’s intent or other statement can be inferred.”

Thirdly, how can you sign a document electronically?

Where “signature” is required, the ECTA recognises the concept of “electronic signatures” (defined as “data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature”. They are valid except in cases where either a law (like the laws relating to property sales etc mentioned above) or the parties themselves require actual physical signatures.

An electronic signature can take many forms. Where it is required by the parties but they haven’t agreed on a particular type of electronic signature to be used, it is valid if –

• “A method is used to identify the person and to indicate the person’s approval of the information communicated; and
• Having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated.”

That definition will often be wide enough to include names on email messages, scanned images of physical signatures and the like. But remember the parties can specify what formats are and aren’t allowed, plus our courts may well look at all the circumstances of a case and decide for example that an actual manuscript signature is required even when transmitted electronically (see for example the “R804k” judgment discussed below).

“Advanced” electronic signatures

This is a concept of authentication designed to make an electronic signature more reliable and it is used when a law requires signature for specified documents or transactions but doesn’t require another particular type of signature.

For example the Deeds Registries Act requires documents like the Power of Attorney to Transfer Property to be signed, and that can be done either physically or electronically – but if electronically the electronic signature must be an advanced one. The Credit Agreements Act provides other good examples.

Even when not specifically required, a big advantage of advanced electronic signatures is that they are presumed to be valid. That means anyone attacking one would have to prove its invalidity and not the other way round.

Security and fraud; with an R804k example

Cyber criminals are as always waiting to pounce so all the normal warnings in regard to electronic communication apply here, with the added need to ensure that electronic documents cannot be altered after completion/signature.

A recent example of “forged electronic signatures” is an online fraud that went horribly wrong for a firm of financial advisers who were sued for R804,000 when their client’s Gmail account was hacked by fraudsters –

• Using the investor’s authentic email credentials, the fraudsters sent three emails to the financial advisers instructing them to transfer a total of R804,000 to the fraudster’s accounts. Two of the emails ended with the words: ‘Regards, Nick’ while the third ended with ‘Thanks, Nick’.
• The financial advisers made the transfers and the investor sued them on the grounds that they had paid out contrary to the written mandate he had given them which stipulated that ‘All instructions must be sent by fax to [011 *** ****} or by email to [***@***.co.za] with client’s signature.’
• The financial advisors argued that they had complied with the mandate in that the email endings “Regards, Nick” and “Thanks, Nick” were valid electronic signatures in terms of ECTA.
• The SCA (Supreme Court of Appeal) however upheld the High Court’s ruling that the financial advisors were liable. They had not complied with the mandate which “requires a ‘signature’ which in every day and commercial context serves an authentication and verification purpose … The word ‘electronic’ is conspicuously absent from the mandate …  The court below cannot be faulted for concluding that what was required was a signature in the ordinary course, namely in manuscript form, even if transmitted electronically, for purposes of authentication and verification.”

Play it safe – have your lawyer draw and manage your agreements for you to minimise this sort of risk, and ask also about using an external service provider for secure, authenticated and verifiable electronic document signing and storage. If you do come to blows with the other party down the line, the integrity and evidential value of your electronic documents and signatures could be make-or-break.

*supplied by lawdotnews

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1. Seven unavoidable costs after the funeral
2. COVID-19 Return to work policy

Funeral cover and burial society memberships play an important role as this will safeguard the other family members against debt when a loved one passes away.  Unfortunately, the expenses don’t stop after the funeral and you want to ensure that your family can cover these costs after you die.

Here are seven unavoidable costs you need to plan for:

Immediate expenses:

On death, bank accounts could be frozen, and family will have limited access to money.

They will still need to cover basic costs – such as the cost of the funeral, traveling, groceries and any other immediate expenses.

Liquidity after a death, especially that of a breadwinner, can leave a family struggling to cover the day-to-day expenses.  You need to ensure your family can access cash in the days and weeks following your death.

Monthly living expenses:

Estates can take months, sometimes years, to wrap up.  Families mistakenly assume that the Estate will pay the monthly ongoing expenses such as the water and electricity, rent, school fees and medical aid.  However, the funds are often tied up until the Estate is finalised.

This is why it is of utmost importance to have a valid Will in the first place.  This speeds up the process of finalising the Estate, and gives the family access to the capital, once estate is finalised, for them to get by.

Executor fees:

You may think that you don’t have enough assets or capital to justify having a Will drawn up.  But even if you only have a few thousand rands in your bank account, this can be considered an estate.  Winding up the simplest of estate is a complicated administrative process – and it’s often more cost effective to get a professional to do this.

However, an Executor can charge up to 3.5% + VAT of the value of your estate in order to do the work.  So, on an estate worth R3 million you would need to pay approximately R120 000.00 in Executor’s fees.  If you don’t have this money available, the Executor is entitled to auction off your assets to pay his fees.

Administrative fees

Following a death, two advertisements must be placed in a local newspaper and the Government Gazette to notify potential creditors.

The costs can vary between R1,000 and R1,500 depending on the publication selected. You’ll also need to pay fees associated with corresponding with the Master of the High Court as well as a fee to the Master of the High Court for its role in the administration of the Estate.

Fees related to selling or transferring property:

Whether you’re selling a property or transferring it into a beneficiary’s name, a Conveyancing Attorney will charge a fee when transferring ownership. For example, a home worth R1 850 000 would cost more than R30 000 in fees to the Estate when it is transferred into a beneficiary’s name.

You’ll also need a rates and water clearance certificate from the city council or municipality before ownership can be transferred. This will be issued only if the rates and taxes are paid in advance. Some areas even require up to six months paid in advance.

Taxes:

Not only will all outstanding taxes have to be paid from the Estate before it can be finalised, but the Executor will have to determine whether Capital Gains Tax (CGT) or Estate Duty is payable.

Most people leave their entire estate to their spouse, but if both of you pass away and your children inherit everything then Capital Gains Tax and inheritance taxes are triggered.

Your family will need to cover the burden of these additional taxes as well as any further legal fees.

Testamentary Trust fees:

If you are leaving an inheritance to minors, you need to set up a Trust upon your death for them to inherit your assets. Trust and ongoing Trustee fees, however, can erode their inheritance.

On average, 1.15% of the net asset value is charged to establish the Trust, and 1.6% is charged annually for the ongoing administration of the Trust.

For example, the total cost on a Trust with R1.5 million in assets over 15 years would amount to over R377,000.

“Most of these fees and costs are unavoidable and people tend not to make provision ahead of time which means their beneficiaries are faced with mounting costs at a time when they are already grieving the loss of a loved one and adapting to their changed circumstances,” said Simeonides.

Most people do not realise that there are some very cost-effective insurance solutions available that can cover these unforeseen costs. “If you really want to protect your legacy and make sure those whom you leave behind are cared for, you need to have a valid Will and clear plan for how they will cover the costs beyond the funeral,” Simeonides concluded.

*Alex Simeonides, chief executive officer of Capital Legacy.

Contact our offices for assistance with drawing up your Will or any deceased Estates by emailing info@stupelberman.co.za

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1. National Assembly Pass Two Amendment Bills

The amendment bills, namely, Prescription in Civil and Criminal Matters (Sexual Offences) Amendment Bill and Recognition of Customary Marriages Bill will head to Parliament for consideration.

The Sexual Offences Amendment Bill

This Bill seeks to empower survivors, who often suffer in silence.  They often keep quiet and either never disclose the offences at all.  Thus allowing the perpetrator to escape all consequence – or they only disclose over varying periods of time.

The amendment paves the way for the prosecution of all sexual offences, regardless of the lapse of time.

88% of victims of sexual offences reported at least one incident, according to the 2018/19 Statistics South Africa Victims of Crime Report.

“The Ministry of Justice and Correctional Services believes that amendments such as these will encourage survivors of sexual offences to report these matters, even if the incidents took place many years ago, so that perpetrators of sexual offences are not met with impunity.

“It means that these crimes can be prosecuted, irrespective of when the crime took place,” said the Justice Department.

The amendment bill also ensures that crimes, which relate to the common law offence of bribery and the offence of corruption in terms of the Corruption Act, are also no longer subject to a time limitation in order to institute a prosecution.

Recognition of Customary Marriages Bill

In terms of section 7(1) of the Recognition of Customary Marriages Act (RCMA), customary marriages entered into before the commencement of the RCMA are governed by customary law.

In terms of this Act, wives have no right of ownership and control over marital property, which right is reserved solely for the husband.

The amendment of the RCMA now provides that where a person is a spouse in more than one customary marriage, entered into before the start of the Act, will have joint and equal ownership and other rights, as well as equal rights of management and control over marital property.

With the amendment, all monogamous customary marriages, whether they were entered into before or after the commencement of the RCMA, are in community of property, unless the spouses specifically determine otherwise by means of an ante-nuptial contract.

“Our constitutional democracy places emphasis on equality. This must permeate all aspects of our society. As the Women’s Charter declares, the level of civilisation, which any society has reached, can be measured by the degree of freedom that its members enjoy.

“As a free and democratic society, we must forge ahead with great speed to ensure that in all facets of society, the status of women is attuned to the expectations of our constitutional democracy,” said Lamola on the passing of the bills by the National Assembly.

The amendment bills will head to the National Council of Provinces for consideration.

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1. A loophole
2. Who Inherits The Estate – The New Wife or The Ex?

This wording effectively limits the requirement for spousal consent to installment sales which reveals a fatal flaw or loophole in the protection afforded by the system of joint administration of the joint estate for spouses married in community of property. Most modern property transactions are cash sales secured by mortgage and not installment sale transactions. With reference to reported and unreported cases, this article investigates the loophole and proposes a way in which the devastating effects of the flaw might be mitigated in future cases.

Your residential fixed-term lease expires but for whatever reason you don’t sign a new one. Nor does the lease say anything about what will happen on expiry. Is there still any form of valid lease in place and if so what terms and conditions apply? What rent is payable?

To avoid confusion over the answers to those questions, the Rental Housing Act (“the RHA” – which, as its name suggests, applies only to residential leases) says that you are deemed “to have entered into a periodic lease, on the same terms and conditions as the expired lease, except that at least one month’s written notice must be given of the intention by either party to terminate the lease.”

Your fixed-term lease is now a “month-to-month” lease. Nothing changes except that the lease is no longer for a specific period but rather continues indefinitely unless and until a month’s written notice is given by either party.

Critically, the rent remains unchanged, unless…

The case of the verbal rental increase

• A tenant rented a residential property for a year at a rental of R30,000 p.m. The written lease was extended for another year at a rental of R32,400 p.m. When that expired, there was no written extension, but verbally the tenant agreed to pay an increased rental of R34,500 p.m. and in fact paid that amount for another nine months.
• When the landlord then gave notice to vacate to the tenant, he declined, only moving out four months later. The landlord sued him for various amounts, including damages for “holding-over”. The concept with “holding-over” is that where a tenant remains unlawfully in the property and thereby prevents the landlord from re-letting the property, the landlord can recover his losses from the tenant in the form of damages.
• The tenant fought back, and one of the defences he raised (the one relevant to this article) was that the orally-agreed increase in rental to R34,500 p.m. was invalid. In terms of the RHA, he argued, the rental remained at the R32,400 p.m. applicable at the date of expiry.
• Not so, held the High Court (this being an appeal from a Magistrate’s Court ruling). The subsequent oral agreement to change the rental was valid – all the RHA says is that the terms and conditions of the lease (including the agreed rental) are deemed to be unchanged, which is “rebuttable”. In other words if you can show that different terms and conditions were agreed upon, verbally or in writing, they will be valid.
• The end result – the tenant must pay damages in the full amount of R69,000 (2 months at R34,500 p.m.) plus interest and costs.

The bottom line, and what your lease should say about expiry

Of course your lease may have been a month-to-month lease from the start – we are talking in this article only about the concept of fixed-term leases expiring and automatically becoming month-to-month. It is in such a case that the upshot of this new High Court decision is that the answer to the question “What rental must the tenant pay under a month-to-month lease?” is that the rental remains unchanged unless – as in this case – the evidence shows clearly that a new rental was agreed upon.

That of course opens the door to uncertainty and dispute, and to avoid that make sure that your fixed-term lease provides clearly in writing exactly what will happen when it expires. Some leases for example provide that they will continue automatically on a month-to-month basis, but incorporating any changes to rental or other terms notified in writing by the landlord to the tenant. Without such a clause you could be in the same position as these parties, battling your way through the courts and hoping that a magistrate or judge (probably both in the end result) will uphold your interpretation of whatever you think was verbally agreed.

Avoid verbal leases!

As a final note, remember that verbal leases (in fact verbal contracts of any sort), and/or verbal amendments to them, are a recipe for misunderstanding, duplicity and dispute.

So although our law accepts the validity of verbal leases (written leases will be compulsory only when the latest amendments to the RHA finally come into force), in practice you should always insist on everything being in writing and signed by both parties, with a clause providing that no amendments will be valid and binding unless likewise reduced to writing and signed.