Can I run a business from a residential property?

A client asked about the pros and cons of operating her business in a residential district. 

What does the law say about running a business from your home in a non-commercially zoned residential area? 

So many people now work from home because of the pandemic. If you are a day-trader, writer, or artist, the impact on the neighbourhood would be negligible. However, if the business is against the law (such as prostitution) or creates a noise nuisance (like an auto-body shop) the impact on the neighbours would be quite objectionable. 

You must check the conditions in your title deed. It may contain a clause like: “this erf shall be used for residential purposes only and no trade or business or industry whatsoever shall be conducted thereon”. 

If so, even If you are a writer working from home, this may be deemed to be a business that falls foul of that restrictive condition. However, it is highly unlikely that a neighbour would complain. 

On the other hand, the court heard an application for an interdict where a construction company opened an administrative office in a suburban area manned from 8 AM to 4:30 PM on weekdays by a staff of four (with the occasional visitor). The judge ruled that “the use or continuation to use the property for any business or trade other than for residential purposes constitutes an illegal act” and granted the interdict, even though the office caused no nuisance to anyone in the neighbourhood. 

To ensure that you can operate your business from a residential property, you must not only look at your title deed but also the zoning.  As a home business operator, you must ensure that the use of the property is in line with the zoning regulations applicable to your property. A Town Planner can advise you if your home-based business complies with your Local Authority’s Municipal Planning By-Laws. Should the property not be zoned for your type of business, the Tow Planner may apply for a rezoning. The process is very longwinded and expensive. 

Without your local authority’s approval for a rezoning of the property, you will not be able to lawfully conduct your business on the property. If you do, you may face a High Court application for an interdict and fines from the local authority.

 

What is the effect of a clause discouraging infidelity in a prenup?

Clients often ask me to include a clause in a marriage contract that will discourage the husband’s infidelity.

General principals

Spouses are generally free to include any provision in their antenuptial contract (ANC). However, the provision may not be contra bonos mores (against the good morals of the public), against nature, reason, public policy, prohibited by any law or purports to take over the powers of the court. Clauses of this nature will be null and void. An ANC may not include clauses that are unreasonable, against public policy or unlawful:

 

• Unreasonable clauses include ones: 

• prohibiting a spouse from working. 

• forcing a spouse to live in a particular area. 

• stating that marital disputes must be referred to arbitration. 

• obliging a spouse to adopt the religion of the other spouse. 

• stating that the parties will not live together as man and wife after the marriage. 

• stating that neither spouse shall have the right to ask for an order of forfeiture or share in the accrual of the other’s estate, following a divorce.

• Against public policy: 

• Clauses enforcing a change of religion, gender or race or prohibiting any association. 

• A clause permitting the parties to commit adultery.

 

• Unlawful: 

• Clauses allowing or forcing a spouse to commit a crime. 

Effect of a clause discouraging infidelity

May an ANC include a clause to deter the husband from being involved in an extramarital affair in the future? 

Case law suggests that one must interpret this type of clause in context. For example, the parties had been divorced before because of the husband’s involvement in extramarital affairs.   

An example of such a clause: 

‘Should it be proven that A be the cause of a future divorce through an extramarital relationship, he will (here reflect an obligation on the husband to give the wife a fixed property, pay her a cash amount, etc.)’ 

The court will enforce this clause as it seeks to preserve the marriage by discouraging another extramarital affair by the husband.

 

Corporate governance – a summary

 

By Welcome Gogobo

Corporate governance is the system of rules, practices, and processes directed and controlled by an organisation or industry.

It essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community.

Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure to increase accountability and facilitate prudent management. Compliance is the process through which companies demonstrate that they have conformed to specific requirements in laws, regulations, contracts, strategies, and policies.

What Is Governance, Risk Management, and Compliance (GRC)?

The overall purpose of GRC is to reduce risks and costs and duplication of effort. It is a strategy that requires company-wide cooperation to achieve results that meet the three essential functions' internal guidelines and processes.

The three elements of GRC are:

·         Governance, or corporate governance, is the overall system of rules, practices, and standards that guide a business. 

·         Risk, or enterprise risk management, is identifying potential hazards to the business and acting to reduce or eliminate their financial impact. 

·         Compliance, or corporate compliance, is the set of processes and procedures that a company has to make sure that the company and its employees are conducting business legally and ethically.

Today's organisations work harder than ever to adapt to a rapidly changing world. They require effective corporate governance that can help them increase their accountability and avoid significant disasters while being more responsive to stakeholder concerns and more transparent with investors. From the technical responsibilities of a board to the nuances of guiding an organisation through contemporary challenges, the corporation gets a comprehensive overview of the role of corporate governance and gains critical insights into the realities of board service. 

The need for compliance documentation

The regulatory context demands a high level of transparency and accountability from all corporate businesses. A rigorous and disciplined compliance process supports and sustains the corporate governance and risk management systems and structures that direct the business activities.

In general, the compliance function must assist in implementing related compliance documents that protect the integrity of the organisation's compliance program and provide evidence that the organisation is compliant with applicable laws, regulations, and program requirements.

In effecting and managing this, one needs a compliance process to implement a compliance risk management whereby a compliance universe is determined, and the applicable laws and regulations are rated, managed, and monitored.

The approach is to roll out the compliance risk approach guided by the phases for its implementation.

These are:

·         Compliance risk identification

·         Compliance risk assessment

·         Compliance risk management

·         And Compliance risk monitoring

 

 

 

 

 

 

Defamation and character assasination

 

BECKER V BRITS [2022] ZAWCHC 44

The plaintiff was a very successful farmer who had farmed in his area for over 20 years and was an alumnus of the University of Stellenbosch. The defendant was a pastor to his family for at least 7 years. The defendant wrote letters making accusations about the plaintiff’s alleged abuse of alcohol. The plaintiff alleges that these letters were defamatory and that he suffered damages of R500,000. The defendant contends that the statements were the truth; alternatively, they were fair comments. Moreover, a shield is raised that these statements were neither defamatory nor wrongful and were not made with the intention to defame the plaintiff.

Wille J comments on the defendant’s strategy of character assassination of the plaintiff and that this will make it impossible for the family to function again as a unit. It appeared that the defendant conspired with the plaintiff’s ex-wife to attempt to settle some score with the plaintiff. Tragically, the plaintiff’s children were also hauled into this unnecessary skirmish and feud.

The judge made these comments about defamation laws:

“Defamation laws are generally aimed at protecting a person’s right to an unimpaired reputation and good name. Reputation is the reflection which the individual has in the eyes of society. In Masetlha, the following was stated generally in connection with the career and reputation of an individual, namely: ‘…People live not by bread alone; indeed, in the case of career functionaries, reputation and bread are often inseparable…’”

“As a general proposition the test for defamation is whether, in the eyes of a reasonable person with ordinary intelligence, the words used so impaired a person's good name, reputation or esteem in the community.25 Reasonable readers take into consideration, not only what the words used expressly state, but also the implication of the words used”.

“The words about the plaintiff’s alleged alcohol abuse are clearly defamatory. Publication of a defamatory statement is prima facie wrongful and the onus rests on the defendant to dispel the prima facie case”.

The court awarded Plaintiff damages of R350,000 and costs on the attorney and client scale.

 

Is your property constantly being pelted by golf balls?

 

By Dean Brainin

 

With over 500 golf courses across South Africa, living on or within close range to a golf course has become relatively normal, with new golf courses and developments showing up each year.

 

The difficulty with living on or near a golf course, one has to tolerate the occasional breaking of a window. However, when does this become an unreasonable nuisance?

 

In South Africa, the law of neighbours governs golf ball incidents resulting in property damage. Our courts find no difference if a person lives on or near a golf course.  

 

South Africa's neighbour law provides that neighbours should tolerate a reasonable level of interference/nuisance resulting from neighbouring land. However, when land use affects neighbours that exceeds that moderate level, it becomes unlawful and thus an actionable nuisance.

 

When it comes to golf balls being a nuisance, the main principles to demonstrate are that the nuisance is excessive and occurs continuously or repeatedly. Also, a person's ability to use their property is typically significantly impacted.

 

In the landmark case of Allaclas Investments (Pty) Ltd & Another v Milnerton Golf Club & Others [2007] 167 SCA, Allaclas Investments (that owned property facing the golf course) brought an application against the Milnerton Golf Club. It sought an order that the Club is interdicted from allowing the sixth hole on the golf course to be used for play until the golf course took the necessary steps to reduce the number of stray balls striking the Applicant's property which property lay adjacent to the fairway of the sixth hole of the golf course. The number of stray balls hitting the Applicant's property posed a danger to the Second Applicant occupying the adjacent property.

 

The High Court decided that a landowner of a property adjoining a golf course had to expect and tolerate a certain level of intrusion from stray golf balls. The Applicant had to undertake various steps to alleviate and reduce the problem.

 

On appeal, the Supreme Court of Appeal held that the high incidence of stray balls hit directly into the residential property of the Applicant (875 golf balls between December 2003 and March 2006) posed a severe danger to the Applicant and his family. It thus constituted a nuisance, even considering the Applicant's choice to live on a golf estate. 

 

The court further accepted that the use of the land as a golf course did not constitute an unusual or unreasonable use and that it would be reasonable and expected for those residing on the golf course to tolerate some ingress of badly hit golf balls. However, what the Applicant's had to endure (875 golf balls between December 2003 and March 2006) went considerably further than what a neighbour is obliged to tolerate.

 

In this regard, a person must never forget that when approaching a court for an interdict to prevent or terminate a nuisance stemming from the neighbouring property, a party must show that the use of the adjoining land or the situation that causes the nuisance is excessive and unlawful. The neighbour must also demonstrate that the nuisance occurs continuously or repeatedly. A single occurrence of such a nuisance would be insufficient to obtain an interdict or any similar relief. Moreover, the said nuisance must not be tolerable to the "reasonable man".