Hi Dale
You say 24 months is the max.
in terms of what, have you found this as the Act says 5 years.
Glad you can help with some practical experience.
Hi Dale
You say 24 months is the max.
in terms of what, have you found this as the Act says 5 years.
Glad you can help with some practical experience.
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Been doing quite a bit of investigating into this and one thing that is quite clear - very few people have a grasp or understanding on this. What i have picked up -
Getting the buyer to buy via a CC saves alot of time effort etc and confusion with the NCA and excludes consequences there
The attorney drawing the agreement must be experienced with this - from what i am getting, there are very few which have researched or involved themselves so far, possibly a fear of the NCA???
The agreement must be more than 1 year, not more but up to 5 years
Anything over 500K is considered to fall under the NCA, however an attorney has suggested it can be worded and drawn to skirt this.
The courts could easily find for reckless lending in an installment agreement registered or not with the NCA, whether there is interest or not!! - this opens a nasty can of worms.
The only way i ever see this being cleared up with a clear channel is when there is finally a court case with a case study to rely on - a bit scary.
Its a matter of time before we are involved in an installement sale and only going to enter if it involves one particular attorney (we not supposed to do that) but i feel that in order to protect the parties, including ourselves, we have no choice. Rather walk away otherwise!
The really scary bit is that the talk i am hearing is to sell via installment, then the buyer can get a bond in 2- 5 years to pay off the difference. This is a fairly standard agreement and type - I dont need an attorney or the NCA to tell me that this is reckless lending without even a doubt. How do you know he's going to get the bond, if he cant now, then it shouldnt have been loaned etc etc.
Sellers operating on the basis they are safe should really beware as when/if the court finds for the buyer, the buyer could end up with a free house! ( a whole tangle of mess with the banks as first on the list, rates etc)
The first legal battle over all of this is going to be one to be watched!!
Garth
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"Getting the buyer to buy via a CC saves a lot of time effort etc and confusion with the NCA and excludes consequences there "
With regard to buying a property in a legal entity: In my humble opinion, anyone NOT buying a property in a Trust either never received advise or is just bloody reckless. I thought estate agents would cash on to the fact that legal entities fall outside the protection of the NCA any time now and then the next step would be to advise their buyers to register a cc. Regardless of the advise being sound or not. Not to speak of the increased transfer duty payable. I think a cc is chosen because it is the cheapest, estate agents are not known for their financial knowledge (present company excluded)
"The courts could easily find for reckless lending in an installment agreement registered or not with the NCA, whether there is interest or not!! - this opens a nasty can of worms." I disagree, there is no more danger of reckless lending than any other agreement. The act is not very clear as to what is considered reckless and do we have any case law were a credit provider was penalised for reckless lending? I think the whole NCA issue is blown out of proportion, every one is to scared to act.
I have just hear of a case were a person involved in an ASA applied for debt review and the ASA was excluded.
A proper due diligence of every transaction should be done. If your buyer can afford the payments, but can not obtain a bond due to the banks credit policy(read ) then I see no problem.
It leaves things open for abuse but we South Africans are known for pushing the envelope
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