If you’re one of the many thousands of people who’ve decided to run a business from your home, you may not now be able to sell that property legally unless it has first been advertised in the way prescribed by the Insolvency Act – even if you are not about to go insolvent. This is the effect of Section 34(1) of the Act, which applies to any “trader” who is buying and selling goods or property, exchanging or manufacturing goods or property, or carrying on any kind of building or construction business, notes Berry Everitt, CEO of the Chas Everitt International property group. “The section provides that any goods or assets that form part of such a business cannot be sold (except in the ordinary course of that business) unless a proper notice of the sale has been published – in the Government Gazette and two issues each of an Afrikaans and an English newspaper circulating in the area in which the business operates – at least 30 days in advance. “And the property from which the business is carried on is included in this provision if it is owned by the business or, as is the case with many small businesses, owned by the “trader” operating the business.” Writing in the Property Signposts newsletter, he says the main intention of this old legislation is obviously to stop business owners who may be facing bankruptcy from quickly stripping the business of assets such as equipment, land or buildings before their creditors move in, and it means that the sale can be set aside if it has not been properly conducted. “However, the law applies even when there is no prospect of insolvency and the property where the business operates is being sold in the normal way - which underlines the need for sellers to appoint only established, experienced estate agents familiar with the additional legal requirements for selling residential properties that are used or partly used for business purposes.”
Obstacles for the Unwary in Insolvency Act
Private Property South Africa
Tagged In:Chas Everitt
What home buyers are looking for
What to ask before signing a lease
Consider Everything Before You Buy
Given that it is much more cost-effective to buy an existing home than it is to build a new one, South African home buyers should consider their choices carefully. At one stage it was a ...
SARS Tightens up on Property Transfers
From this month (October 2012), a new system introduced by the SA Revenue Service (SARS).