South African families set to benefit from clearer understanding of property law
UK - University of Birmingham
Families living in South Africa’s former black townships are set to benefit from clearer understanding and fresh consideration of the laws on property and inheritance surrounding apartheid-era ‘family houses’, thanks to new research from the University of Birmingham.
Dr Maxim Bolt worked with South African-based NGO ProBono.Org to develop a toolkit to help guide discussions to develop policy changes to reduce the risk of people living in such properties – particularly women and children – becoming disadvantaged. The toolkit, which is being discussed by policy makers and legal experts at a special workshop in Johannesburg this month, recommends a number of actions, including:
Retail property fundamentals - consumer finances
South Africa - Propertywheel
While the emergence of online shopping as a retail alternative deserves to be taken seriously by the Retail Property Sector, the state of the economy and household sector finance remains arguably the biggest near-term source of pressure.
Disposable income growth under mounting pressure
The South African Reserve Bank March Quarterly Bulletin completed the 2018 picture for the consumer, and it did not make for good reading.
The recent economic growth weakness dampened real household disposable income growth, taking it down to a meagre 0.6% year-on-year in the final quarter of 2018, from 1% in the prior quarter. This continues a recent slowing growth trend from a relatively high of 3.7% year-on-year as at the third quarter of 2017.
Sweeping of the 5% of interest earned on Section 86(4) trust investments in terms of Section 86(5) of the Legal Practice Act
South Africa - Legal Practitioners Fidelity Fund
With effect from 1 March 2019 the Banks that have entered into a Banking Arrangement, and those Banks that will be entering into a Banking Arrangement with the LPFF will automatically sweep the 5% of trust interest earned on section 86(4) trust investments, in terms of section 86(5), to the nominated LPFF bank account.
The monthly sweep of 5% of interest earned will apply to all interest credited to a client’s section 86 (4) trust investment from 1 March 2019, irrespective of the date of the opening of the investment.
Legal Practitioners Fidelity Fund
I have noted this development with dismay and have two main concerns: 1 The money is being "swept out" of the investment accounts of persons who have no connection or relationship with the LPFF, without their prior knowledge or consent. (Unlike the interest on attorneys trust accounts, where the attorneys were at least LSSA members. 2. The sweeping is arbitrary in that not all persons/clients are affected, only those who happen to pay deposits. In effect this is a wealth tax of sorts.
It is not clear to me that these investments would then in future be covered by the AIIF insurance, since they were previously specifically excluded from cover because the interest accrued directly to the client in whose name the money was invested. Any thoughts on how advise clients on this issue?