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February 13, 2019

Can a hotel guest sue for an injured ankle?




A guest slipped and fell in a hotel bathroom and injured his ankle. The court, in Klassen v Blue Lagoon Hotel and Conference Centre had to decide if the hotel was negligent and had to pay the guest damages.

The defendant disputed liability, alleging that the plaintiff was drunk at the relevant time. It also relied on a disclaimer notice to guests, indicating that the hotel would not be responsible for any personal injury to guests whether such injuries or loss were sustained by the negligent or wrongful act of anyone in the employment of or acts on behalf of the defendant.

Held that the Court was satisfied on the evidence before it, that the plaintiff had injured his ankle when he slipped and fell in the defendant’s toilets. It also accepted that when the plaintiff checked in at reception, he completed and signed a registration card and that the said card contained the exemption clause relied on by the defendant. Furthermore, the disclaimer notices were displayed at the motor vehicle entrance and the guardhouse.

The test for negligence is whether a reasonable person, in the same circumstances as the defendant, would have foreseen the possibility of harm to the plaintiff; would have taken steps to guard against the possibility; and whether the defendant failed to take those steps. The evidence established that the defendant had a properly functioning cleaning system in place, and that it took reasonable precautions in ensuring that the toilet facilities were kept in a clean and dry condition and that they did not pose a danger to its guests.

Finding no negligence, the Court dismissed plaintiff’s claim.


January 26, 2019

What is the difference between a suretyship and a guarantee?


ABC (Pty) Limited (the creditor) wants to sell goods for a large amount to XYZ (Pty) Ltd (the debtor, also known as the principal debtor). The creditor needs some form of comfort that the debt will be paid. Typically, it could ask for a cession of the book debts of the debtor or a pledge of its shares or, usually, require one or all of the directors of the debtor to bind themselves as sureties on behalf of the debtor, or to provide guarantees, that if the debtor fails to pay, the creditor can look to the directors for payment.
So, what’s the difference between a suretyship and a guarantee? The main distinction is that a suretyship is based on ‘secondary’ liability whereas the guarantee is based on ‘primary’ liability.
Suretyship

·         A suretyship is a contract between the creditor, the principal debtor and the person binding himself on behalf of the principal debtor, as the surety, usually as surety and co-principal debtor. In his personal capacity the surety undertakes to step into the shoes of the principal debtor and pay the creditor if the principal debtor can’t. This is the secondary nature of the contract. 
·         The surety and the principal debtor become jointly and severally liable to the creditor. 
·         There are legal exceptions (such as an obligation on the creditor to look to the principal debtor first, before proceeding against the surety) that are invariably waived in the suretyship agreement. This means that the creditor need not seek to recover the debt from the principal debtor first before enforcing the agreement against the surety.
  • The General Law Amendment Act 50 of 1956 requires that a valid suretyship agreement must be in writing and signed by the surety. 

·         An independent guarantee is based on ‘primary’ liability and exists independently of any underlying obligation by the principal debtor to the creditor.

·         So the guarantor irrevocably and unconditionally guarantees, as a primary obligation, in favour of the creditor, the due and punctual payment by the principal debtor of all amounts it owes to the creditor and undertakes to pay the creditor on written demand all sums which are now, or at any time or times in the future due by the principal debtor to the creditor.

·         The guarantee is a continuing covering security and remains in force until the principal debtor pays everything it owes to the creditor.

·         A guarantee does not have to be in writing, but it obviously should be.



January 11, 2019

Regulations about gas installations home-owners should know



Source: Compeg

The rapidly increasing cost of electricity has resulted in a growth in popularity among many South African home-owners to utilise gas installations in their homes. However, most homeowners are unaware that there are specific regulations that they must comply with when installing gas equipment in their homes to ensure their insurance policy remains valid.

According to the regulations that were introduced in 2009, all gas installations must have a Certificate of Conformity according to the Pressure Equipment Regulations that have been promulgated under the Occupation Health and Safety Act (No 85 of 1993).

While this may sound like a complex legal document – essentially it is a certificate that states that the installation has been properly inspected and is determined to be safe and leak free. It is critical that this certificate is also issued by an authorised person who is registered with the Liquefied Petroleum Gas Safety Association of Southern Africa (LPGAS).

According to the regulation, any home-owner who has a liquid gas installation installed in their home must have this certificate, which is usually obtained during the installation phase. However, all home-owners considering gas installations need to know that the onus is on them, the homeowner, to ensure that they have this certificate in their possession, not the installer.

If your home is damaged or destroyed, as a result of a defective gas appliance – and you do not have a valid certificate issued by someone registered with LPGAS – the insurance implications could be significant. An insurance company would be well within their rights to repudiate a claim, which could have severe financial repercussions for the home-owner.

Having the installation inspected and approved is a quick and easy process – provided the installation has been done correctly – much in line with similar requirements for electrical installations, which also requires a certificate of compliance under the Machinery and Occupational Safety Act of 1983.

The types of gas installations that require this certificate include gas fires or braais, gas stoves and ovens, as well as hot water systems. It is vital for all home-owners to realise that such an inspection is not just essential for their insurance policy to remain valid, but even more importantly, that it is conducted to ensure that the installation is safe and their family is not put at risk. If a gas appliance has been incorrectly installed and results in a gas leak this could have major health implications for a family, not to mention the huge danger involved of an explosion.

December 05, 2018

Airbnb and short-term letting in sectional title complexes






Can body corporate’s rules prohibit this?

I believe that Airbnb has over 40,000 South African active listings on their site. How many of those are owners in sectional title complexes, and how do short-term rentals affect security in complexes?
As our complex views short-term rentals of under 3 months as a security risk, our body corporate rules provide:

SHORT-TERM RENTALS
It is recorded that no section shall be let by any owner or resident for a period of less than 3 months at a time. No "Airbnb" or similar leasing/bed and breakfast/hotel/serviced apartment arrangements or platforms shall be permitted unless the prior written consent of the Trustees is obtained.
FAILURE TO ADHERE TO THIS RULE SHALL ATTRACT AN IMMEDIATE FINE OF R5000 PER OCCURRENCE/INCIDENT, WHICH AMOUNT SHALL INCREASE ANNUALLY BY 10%.

But can we enforce this? It seems that we must wait for a High Court ruling.

The Community Schemes Ombud Service Act (“the CSOS Act”) applies. In July 2018, the CSOS adjudicator heard a dispute between the body corporate and three owners regarding the amendment of the body corporate’s conduct rules that prohibited letting units in the scheme for a period of less than 3 months. The owners, who had been making use of the Airbnb website to let their units for less than three months at a time, contended that this rule was unfair and unreasonable.

The adjudicator had to consider the following questions:

1.     Is the rule prohibiting short-term rentals in compliance with the Sectional Titles Schemes Management Act (“the STSMA”)?
2.     And, if so, is the rule applicable and enforceable against the 3 owners letting their units on Airbnb?
3.     Is the rule prohibiting short-term rentals in compliance with the STSMA?

The adjudicator considered section 10(3) of the STSMA, which requires that a scheme’s conduct rules be reasonable and apply equally to all owners of units within the scheme, and the balance between the respective interests of the owners and the body corporate.
I
n summary, the adjudicator’s findings were as follows:
·         The rule prohibiting short-term rentals of less than 3 months at a time is reasonable and fair in the circumstances.
·         Different rules cannot apply to different owners and the owners who previously let their units via the Airbnb platform have to abide by the new rule.

·         However, the rule should only become enforceable after a fair and reasonable notice period.

Having reached that conclusion, however, the adjudicator finally found that the CSOS Act “does not confer any jurisdiction on an adjudicator to make an order whereby a party can be instructed to cease his/her/their behaviour in contravention of a rule” and further that the act “does not confer the jurisdiction on an adjudicator to declare a rule reasonable and enforceable.”

The adjudicator confirmed that as she does not have the required jurisdiction she stated that “given the uncertainty in schemes insofar as short term letting is concerned, a High Court ruling would be highly beneficial”.

November 16, 2018

Is your sectional title complex looking a bit tired?




Sectional title maintenance and improvement

Maintenance

The trustees of your body corporate need to maintain the complex (to keep it more or less in its original condition). These items are provided for in a budget that deals with routine maintenance and provision for unforeseen expenses. The trustees normally have discretion to authorise spending on these items. If the maintenance item is out of the ordinary (e.g. you need to spend a large sum to resurface your tennis court) a majority of the owners should approve the expenditure.

Improvements

Sometimes, it may be necessary to improve the property (perhaps to make it appear more modern).  An improvement that is a “must have” is likely to be non-luxurious but one that is a “nice to have” is probably luxurious. The common property of a scheme is owned by all owners in undivided shares. One of the basic principles of co-ownership is that all owners must agree to any significant or change to their property.

Maintenance of the common property, especially in schemes that have been running for a few years, should hold no surprises. Improvements to the common property, on the other hand, are not routine. This uncertainty is unfortunate because while a non-luxurious improvement must almost always be authorised by a special resolution of the body corporate, a difficult thing to achieve, authorising a luxurious improvement always requires a unanimous resolution, an exceptionally difficult thing to achieve.

The trustees are entitled to suggest a non-luxurious improvement but there is a specified procedure that must be followed to get the authorisation. The owners must be notified in writing of the trustees’ suggestion and given 30 days to request a meeting to discuss the proposal. They must be fully informed of the financial implications and, if any owner requests a meeting to discuss the improvement, a meeting must be held and the special resolution taken at the meeting. If the resolution is not taken, the improvement cannot be made. There are two implications to this provision. The first is that if no owner requests a meeting within the required thirty day notice period, the meeting need not be held and no special resolution is required to authorise that particular improvement. The second is that this is one special resolution that must be taken at a meeting and cannot be taken by round robin.