Page 13 - Nexia SAB&T Property & Tax Guide 2022

LEGAL PRACTICE ACT
Section 86(4) of the Legal Practice Act (28 of 2014) allows legal practitioners to invest client
monies in a separate trust savings account where there is an underlying transaction with an
explicit mandate from the client to do so. 5% of the interest earned will automatically be paid
monthly to the Legal Practitioners Fidelity Fund by the bank (which has been approved by
the LPFF). In addition, the Act requires an attorney who receives written instructions from a
client, to set out the intended scope of the engagement with clarity and in writing, including
estimated costs for the services to be provided.
FATCA
In order to invest funds, the requirement of disclosure of world-wide tax registration is
required in terms of the US Foreign Account Tax Compliance Act, and an Inter-Governmental
Agreement (IGA).

OCCUPATIONAL INTEREST
Where occupation takes place on a particular date and transfer takes place after the date of
occupation, occupational interest is paid at an agreed amount for the period of occupation
until transfer. In most cases this is paid by the purchaser, who may take occupation prior to
transfer being registered. The terms should be stipulated in the deed of sale. In some cases,
it is the seller who is the one who has to stay on in the property he or she has sold and where
transfer has been registered. In this case, the seller will be required to pay occupational
interest to the purchaser. In general, on occupation, risk passes to the purchaser. Clauses
dealing with occupational interest and risk (who is at risk while the purchaser is in occupation)
should be included in the deed of sale.
COMPLIANCE CERTIFICATES
The contract of sale is required to include clauses which deal with the Electrical, Beetle, Gas
and Plumbing Certificate (where applicable). The City of Cape Town: Water Amendment By-law,
2018 provides that the seller must, before the transfer of a property, submit a plumbing
Certificate of Compliance from a registered plumber (who must be registered with CoCT),
certifying that any water installation (including alternative water connections) conform to the
by-law and any National Building Regulations and Standards. Conveyancers attending to the
transfer of a property are required to ensure that the requisite compliance certificates are
received well before registration at the Deeds Office.

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