July 2026 | Property
“You do not mend a broken vase by handing over a new one.” (Anonymous)
When a property sale is cancelled, most people picture a straightforward reset. The seller keeps the property, the purchaser gets the money back, and everyone walks away as if the deal never happened.
The law calls this restitutio in integrum, and a recent Gauteng High Court decision shows that putting the parties back where they started can be a far more exact exercise than simply reversing the transaction.
Restitution is not a reset button
The dispute followed the cancellation of a sale involving a smallholding in Kyalami. The purchaser had taken occupation of parts of the property, including a restaurant and farm stall. Transfer had not yet taken place because the financing and other conditions attached to the sale had not been finalised.
In December 2017, while the purchaser was still in occupation, an arsonist set fire to the restaurant. Neither party had caused the fire, but the sale agreement placed the risk of damage on the purchaser. The financing arrangements and other conditions remained unresolved, and the purchaser cancelled the agreement in May 2018 without transfer ever having taken place. He was entitled to repayment of R2,15 million, less the fair and reasonable cost of repairing the fire damage. The court had already decided that the repair costs must be deducted from the purchaser’s refund, but the amount of that deduction was only determined in 2026.
The principle of restitutio in integrum requires the parties to be restored, as far as reasonably possible, to the positions they held before the agreement.
That sounds simple in theory. In practice, years may pass between occupation and cancellation, and the property itself rarely stays the same. A building can be damaged, deteriorate, or simply age. When that happens, restitution has to account for the difference between what was handed over and what is being handed back.
Old does not come back new
The court had to assess the fair and reasonable cost of remedying the fire damage to the restaurant and farm stall, taking into account the condition of the structures when the purchaser took occupation. Parts of the restaurant and farm stall were already in poor condition, and some earlier work had been badly done.
Restitution could not be used to turn an aged or poorly built structure into a new one at the purchaser’s expense. Where a proposed repair would leave the seller with something materially better than what existed before, the court reduced the amount allowed.
The purpose is to restore what was lost, not improve what was already there. The question was not what it would cost to replace the structures with new ones, but what it would fairly cost to restore what had actually been damaged.
You can’t deduct the same problem twice
The purchaser argued that, after the court had calculated the cost of each repair, the overall figure should be reduced again to reflect the property’s poor condition before the fire.
The court rejected this argument. It had already reduced the relevant repair amounts to reflect the structures’ age, poor condition, and substandard workmanship. A further general reduction for the property’s overall condition would therefore have deducted for those same problems twice.
The court fixed the fair and reasonable cost of restoration at about R1.36 million. After this was deducted from the R2.15 million repayable to the purchaser, the seller still owed him about R799k.
Record the condition, or argue about it later
The judgment also shows why you should record a property’s condition when occupation changes hands.
Where there is no clear record of what a property looked like at handover, parties may be left arguing years later about whether a structure was sound, dilapidated, damaged, or badly built before the purchaser arrived.
Photographs, walk-through videos, inspection reports, inventories, and records of existing defects can matter far more than memory if a sale later collapses and restoration becomes disputed.
In this matter, the condition of the restaurant and farm stall when the purchaser took occupation formed part of the court’s assessment of what fair restoration required.
Why the date of cancellation matters
The passage of time did not postpone the financial consequences until the date of judgment.
The sale agreement was cancelled on 31 May 2018. The parties had agreed that interest on any amount ultimately found owing would run from that date, and the court had already made an order to that effect.
By the time the restoration dispute was finally decided in 2026, more than R613k in interest had accrued on the outstanding amount.
Bottom line
Buying or selling property and handing over occupation before the deal is complete? Speak to your attorney about recording the property’s condition and making sure the agreement clearly deals with risk.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
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July 2026 | Property
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” (attributed to Mark Twain)
A married couple moved to Australia and rented out their South African family home while they tested the waters Down Under. Years later, once they had decided to remain abroad, they sold the property and gave their tenant notice under a clause that allowed them to cancel the lease on three months’ written notice.
The tenant argued that the lease was protected by the Consumer Protection Act (CPA) and could only be cancelled if he had materially breached it.
A recent Supreme Court of Appeal decision explains why the tenant’s CPA argument failed, but also why the landlords could not require him to vacate without following the proper eviction process.
Not every landlord is in the letting business
For a residential lease to fall within the CPA’s definition of a rental, the letting must take place in the ordinary course of business.
The court found that the couple were not in the business of letting property. They had let out their own home as a temporary measure while deciding whether their move abroad was permanent, not as part of an ongoing letting business.
They were not continually marketing rental services and were therefore not suppliers as contemplated by the Act. Their tenant, in turn, did not qualify as a consumer. On this basis alone, his reliance on the Act failed.
Where the line actually falls
Whether a lease falls within the CPA depends on its factual setting. What matters is whether letting property forms part of the landlord’s ordinary, continuing business activity.
A court must look at what business the landlord actually carries on and how that business operates. The fact that rent is being paid does not settle the question on its own.
A valid cancellation does not authorise an eviction
The High Court upheld the cancellation of the lease and ordered the tenant to leave by a fixed date.
The Supreme Court of Appeal set that order aside. Requiring the tenant to leave was, in effect, an eviction order, but the process required under the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) had not been followed.
Under PIE, a court must decide whether eviction is just and equitable and determine an appropriate date for the tenant to leave.
A landlord therefore cannot treat cancellation of a lease as an automatic eviction. Cancelling the lease and evicting the tenant are two separate legal steps.
Two questions, not one
For landlords and tenants alike, the lesson is to keep these questions separate. First ask whether the lease falls within the CPA by looking at the nature of the landlord’s letting activity. Then, if the lease has ended and the tenant remains in occupation, the eviction process must still be dealt with under PIE.
A cancelled lease ends the contract, but it does not remove the tenant.
Not sure whether the CPA applies to your lease or whether the correct eviction process has been followed? Speak to us before taking the next step.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
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June 2026 | Property
“The single biggest problem in communication is the illusion that it has taken place.” (George Bernard Shaw)
Many landlords assume that once a tenant stops paying rent, an eviction order will inevitably follow. A recent Western Cape High Court judgment shows how wrong that assumption can be. Despite rental arrears of more than R46,000 and an apparently legitimate grievance, a landlord’s eviction application failed because of a problem many people overlook: the cancellation letter.
The dispute arose after tenants allegedly fell behind on their rental payments. The landlord sought to terminate the lease and evict the occupants. Although the alleged arrears were not seriously disputed, the case ultimately turned on a different question: whether the lease had been validly terminated in the first place.
The court didn’t even consider whether the eviction itself would have been justified. Instead, the application failed because of defects in the cancellation process.
Why the cancellation failed
The letter sent to the tenants purported to cancel the lease immediately because of the rental arrears. At the same time, it gave the tenants a future date by which they had to vacate the property and demanded payment of the outstanding amounts.
The difficulty was that the letter appeared to communicate several different and potentially contradictory things at once. Had the lease already been cancelled? Were the tenants being given an opportunity to remedy the breach? Would payment of the arrears change anything? The notice did not provide clear answers.
The court confirmed an important principle of South African law: a notice terminating a lease must be clear, unconditional and unequivocal. If a notice leaves uncertainty about the parties’ rights and obligations, it may be invalid.
In this case, the court found that the cancellation notice was ambiguous. Because the lease had not been validly terminated, the landlord could not establish that the occupants were unlawfully occupying the property. Without unlawful occupation, the eviction application could not succeed.
A costly lesson for landlords
For landlords, the lesson is straightforward. Even where a tenant owes substantial rental arrears, a defective cancellation process can derail an otherwise strong case. Before launching eviction proceedings, it is essential to ensure that all notices have been properly drafted and served, and that all requirements for a valid termination have been satisfied.
For tenants, the case demonstrates that the outcome of an eviction application is not determined solely by whether rent is owing. A landlord must also show that the lease was lawfully terminated before a court will consider whether an eviction order should be granted.
The judgment is a reminder that legal disputes are not won on the facts alone. Even where a landlord has a legitimate grievance, a defective notice can bring an eviction application to a halt before a court ever considers the merits of the case.
The lesson extends beyond landlord-tenant disputes. Small drafting errors in legal notices can have significant consequences, particularly where rights and obligations depend on clear communication.
A properly drafted notice can prevent costly litigation. If you are considering cancelling a lease or pursuing an eviction, obtaining legal advice before taking formal steps may help avoid costly delays and unnecessary disputes.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
© LawDotNews
May 2026 | Property
“The buyer needs a hundred eyes, the seller not one.” (George Herbert)
A Marina Da Gama property. A collapsed wooden deck. A purchase price of R1.55 million and repair costs claimed of just over R100 000. The facts are not complicated. But the legal battle that followed lasted more than a decade.
What happened
The buyers purchased a residential property in October 2013 after the estate agent described it as being in stunning condition. They took occupation in January 2014. Seven months later, the upper wooden deck collapsed. Expert evidence subsequently confirmed that the decks had been constructed without approved plans and were not built to National Building Regulations standards. The defects were latent, meaning they were not visible to a layperson on inspection.
The buyers pursued the estate agent, his close corporation, and the seller across eight separate claims. At the close of the buyers’ case, the defendants asked the court to dismiss the matter on the basis that insufficient evidence had been presented against them. The court agreed and dismissed all the claims.
“Stunning” is not a structural warranty
The buyers argued that the estate agent’s description of the property as being in “stunning” or “beautiful” condition amounted to an actionable misrepresentation. The court disagreed.
Descriptive sales language of that kind is puffery. It reflects aesthetic opinion, not structural fact. It does not amount to a representation about the integrity of the building, compliance with approved plans, or the absence of latent defects. To cross from puffery into misrepresentation, a statement must assert a verifiable fact. Words like “stunning” do not do that.
The estate agent’s duty of disclosure, under the legislation applicable at the time, extended to material facts within his personal knowledge. It did not require him to conduct engineering or technical investigations to uncover hidden structural defects. The defects would not have been visible to a layperson. They were not within his knowledge. No actionable misrepresentation was established.
The voetstoots clause held
The sale agreement contained a voetstoots (as it stands) clause. To defeat it, the buyers were required to prove two things: that the seller had actual knowledge of the latent defect, and that he deliberately concealed it with the intention to defraud.
Neither was established. The buyers’ own evidence undermined the claim. Both buyers described the seller as a decent, honest person. One stated plainly that the seller did not know about the defects. Quick-fix repairs noted by the experts did not change that conclusion. Repairs may reflect ordinary maintenance. They do not, on their own, establish knowledge of a structural defect or an intention to deceive. Fraud is not lightly inferred.
Getting the damages calculation wrong
Even if the buyers had established liability, their damages claim faced a separate problem. The actio quanti minoris, a claim for a reduction in the purchase price, entitles a buyer to compensation for the property’s reduced value caused by the defect. The reasonable cost to repair may serve as evidence of that reduction, but no more. The buyers simply claimed replacement costs, which was entirely the wrong way of going about it.
In plain terms
Puffery is not a promise – in fact, it’s to be expected in real estate listings. A voetstoots clause is not easily defeated. And the burden of investigating a property before signing rests firmly on the buyer.
Nine court days. Twelve years. Presumably substantial legal costs. Every claim dismissed. Get advice before you sign, not after the deck collapses.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
© LawDotNews
May 2026 | Property, Tax, Wills and Estate Planning
“I can’t afford to die; I’d lose too much money.” (George Burns, comedian)
At the heart of any estate plan lies your will. Pair it with a file containing all the information and documents that your executor and heirs will need to wind up your estate, and you’ve laid a solid foundation for protecting your loved ones when you’re no longer around to do so.
Hopefully, most of us have already crossed those two essentials off our “to do” list. But there’s a third step which doesn’t always receive the attention it requires: planning for the costs your estate will have to pay, including a number of taxes.
As with all things to do with SARS and tax, there are many detailed requirements and grey areas involved, so what follows is a general guide only. It’s no substitute for specific professional advice.
The big costs you should plan for
- Costs: Central to your estate planning will be understanding just how much each of your heirs will actually receive from your estate after costs, the most significant of which are usually executor’s fees and government taxes.
- Taxes: There are two main taxes to consider: estate duty, and capital gains tax (CGT). In this article, we’ll focus on the CGT aspect for the simple reason that it’s often forgotten about, and even more often misunderstood.
CGT: The ambush tax lurking in the wings
CGT is one of those low-profile taxes that lurks around unobtrusively in the wings, being ignored and forgotten about until it suddenly pops out of the woodwork.
In this case, the “popping out of the woodwork” will happen when you’re no longer around to be ambushed by it. That’s because CGT is triggered by a taxpayer’s death, which is a “deemed disposal” tax event. In other words, your assets are deemed to have been sold at market value on the day you died. And that triggers a tax liability for your estate on the asset’s growth in value since you acquired it – the capital gain.
Before we get into the nitty-gritty of putting figures to that liability, let’s share a smidgen of good news.
The good news: 3 big exclusions, boosted by Budget 2026
Note firstly that no CGT at all is payable on “personal-use assets”, retirement fund benefits and most mainstream life policies.
Secondly, there’s “spousal rollover relief”: liability for CGT on assets left to your spouse is “rolled over” so that it’s payable not by your estate but later on by your spouse (on sale) or by their estate (on death). That, of course, can make a tremendous practical difference in ensuring that your spouse will be okay financially.
Thirdly, the annual exclusion in year of death, the primary residence exclusion and the small business disposal exclusion can all reduce CGT substantially. And as we note below, Budget 2026 has boosted them all. Good news indeed!
- Annual exclusion in year of death: If you sell assets during your lifetime, your CGT liability is reduced by an annual exclusion of R50,000 (up from R40,000). In the year of your death, this exclusion is boosted to R440,000 (previously R300,000).
- The primary residence exclusion: This is a big one for property owners in respect of their “primary residence” (the home you ordinarily live in), with the exclusion increased from R2,000,000 to R3,000,000.
- The small business asset disposal exclusion: If you leave a small business with a market value of up to R15,000,000 (previously R10,000,000), your estate may qualify for a R2,700,000 exclusion (was R1,800,000) on the assets of the business, which are deemed to have been disposed of on your death. Many small businesses will also qualify for wear-and-tear on assets used in the business. Quantifying this requires professional assistance.
How to calculate CGT
Now for the actual CGT calculation, which will give you a rough idea of the final liability so you can plan for it:
- Include all your assets (except those mentioned above as not being subject to CGT) at their current market value.
- Deduct the base cost of each asset; that is what you bought the asset for plus allowable costs such as costs of acquisition and the cost of subsequent capital improvements.
- Calculate the capital gain or loss by subtracting the base cost from the market value.
- Deduct all exclusions from the capital gain to calculate the net gain.
- Multiply the net gain by the 40% inclusion rate to give you the taxable capital gain.
- Finally, apply your marginal tax rate to that taxable capital gain to give you the final CGT liability.
Putting together a comprehensive estate plan, anchored by your will, is essential to ensure that your loved ones are properly catered for after you’re gone. You know who to call if you need any help!
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
© LawDotNews
May 2026 | Property
“A creature with a big enough head to make a contract should have the sense to make one it can keep.” (Barbara Kingsolver)
A R1.725 million deposit. A bank guarantee that never arrived. A property that ultimately sold for significantly less than the original price. What happens to the deposit money?
A sale that fell apart
The seller agreed to sell an agricultural property in Kyalami for R17.25 million. The purchaser paid a deposit of R1.725 million into the estate agent’s trust account. The balance of the purchase price was to be secured by a bank guarantee on request.
The seller called for the guarantee and gave 14 days to comply. When it was not provided, a further notice gave five business days to remedy the breach. The guarantee was still not furnished. The seller cancelled the agreement and claimed the full deposit.
The purchaser attempted to recover it, but the claim failed.
Rouwkoop or penalty clause?
A true rouwkoop clause – from the Dutch for “regret-purchase” – allows a party to withdraw from a sale by paying a fixed amount. It is an agreed exit mechanism, not a consequence of breach. A forfeiture clause operates differently. It is triggered by breach and is subject to the Conventional Penalties Act. The clause in this case fell into the latter category. The purchaser’s only remaining recourse was section 3 of the Act, which allows a court to reduce a penalty if it is out of proportion to the prejudice suffered.
Why the deadline mattered
The purchaser argued that the word “timeously” meant within a reasonable time, not strictly within the five-day notice period. The court rejected that argument.
Read in context, the agreement created a clear notice-and-remedy mechanism. The five-day period was the operative timeframe. “Timeously” did not introduce flexibility. It referred back to the period expressly stipulated in the contract.
Once the guarantee was not provided within that period, the seller’s right to cancel arose. What the purchaser might have done after the deadline was irrelevant.
Can the court step in?
The purchaser invoked section 3 of the Conventional Penalties Act. That argument did not succeed.
The court looked beyond the arithmetic. It considered the broader consequences of the failed transaction, including the collapse of an onward purchase, the loss of a prior offer, bridging finance, and extended holding costs.
On that evidence, the seller’s prejudice was substantial. The forfeited deposit bore a reasonable relationship to that prejudice. There was no basis for interference.
The real lesson
Deadlines in property transactions are not flexible unless the agreement says so. A deposit is not a placeholder and sellers don’t have to play nice. The bottom line? Get advice before you sign.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
© LawDotNews
