Daan on adventure

Gentle reader 

The hiatus in these newsletters was caused by my elder son seeking to accelerate his inheritance by taking me on a motorbike tour in the Eastern Cape followed by a mountain bike sojourn with a bunch of old farts in the Outeniquas. Both exhilarating and depressing. Aside from occasional butt-clenching, one has time to reflect:

  • Generally, the area West of the N2, above East London, comprises wonderfully tinted rolling grass on hills and mountains – East of that road is a dustbowl: dry, over-populated, over grazed, and under-resourced. There are houses everywhere, but few towns.
  • As one moves towards the Karroo, the towns mostly comprise swathes of RDP housing mated to now decrepit historic towns which obviously cannot sustain the number of people staying there.
  • On my return to Pietermaritzburg, following on George, the first thing I noticed was the grime and lack of maintenance. I do not like George, but one cannot miss the obviously superior effort that goes into its maintenance.

Cloistered on a bouncing seat allows one to reflect on why, which leads one to the larger issues in South Africa; depressing stuff, but still:

  • South Africa is verging on insolvency, much of it owing to services extended to those promised a better life (laudable but is it affordable?) and by political reward (not laudable, not affordable) which resulted in mismanagement and corruption.
    • At municipal level, most public service providers are broke, badly run and are besieged by disgruntled citizens. Yes, we did expand services to many which had none before – the difficulty is that the existing infrastructure was often inadequate to cope with the expansion, capital and know-how was not available to maintain the existing infrastructure and those serviced cannot or will not pay for what they receive. Tweaks to legislation, proposed by NDZ will not solve this.
    • At central government level, we are also broke and, despite the Prez maintaining a brave face, the fact is that we on the verge of being sucked into a debt trap (a Bloomberg article holds that we are in the twilight zone): the causes are similar but more political. A recent report held that only R3 out of every R10 collected by the state is used for service delivery; an unsustainable situation, yet we cannot cut our bloated civil service bill, as so doing will increase unemployment and cost those in power votes.
    • Unemployment is rife. The promises, by those controlling our state, to provide employment, over the past 20 years, if brought to fruition, would have had all of us employed by now! The fact is that the state does not have the money and the wherewithal to engineer jobs. On our current trajectory, meaningful employment for most of us will not happen in my lifetime.
    • Tradition enslaves us – take the old Transkei as an example: one can erect a two-storey building anywhere with no plans, no access and no services. In town, public safety and planning is paramount, but not in the areas controlled by traditional leadership. In “white” farm areas one may not subdivide for very cogent reasons (lest one produces unsustainable farms) yet, in the “traditional” areas, sustainability is not insisted upon, resulting in communal farming allotments which are uneconomic and building practices which are questionable. I have little doubt that many such practices (take for instance the statements by the Ingonyama Trust that granting access by black women to land is not traditional) are maintained because our government does not have the b*lls or leadership to dump harmful traditions. 
    • We cannot sustain our population growth and birth control needs to be implemented for us to provide for proper facilities for all.

The result of all this is there for all to see –

  • South Africans semi-migrate to safer/better run/solvent municipalities and many of those who are able, emigrate, personally or financially, sequester their pensions, educate their children to enable them to emigrate, and so on. The result is that risky /badly run areas bleed those who would otherwise help to maintain them financially.
  • Foreigners may need to invest elsewhere but are obviously aware that South Africa is not in a good financial space, hence capital flight and a drop in FDI.

Fortunately, the beer was plentiful and cold, South Africans make excellent brandy and lamb shank risotto is fantastic. The  Garden Route Trail Park, near Karatera, sports the best single-track trails I have ever ridden and, best of all, we understand how this country works, ordinary folk are generally good people – go into any shebeen, smile, buy a quart and see for yourself.

Daan

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Business

Snippets:

  • A newspaper reported that Transnet had made a mistake in rehiring errant CEO Gama – a mistake!
  • The taxi industry declares itself ready for regulation – amazing!
  • Eskom accepts renewable energy then discovers this that its network cannot handle a greater supply. Oops!
  • Xenophobia in Gauteng dictates who may be employed – are immigrants not generally the braver/better souls in a society and therefore worth gaining? The real issue is control of who comes in – a pipe dream.
  • The SABC is desperately casting around for others to collect its revenue: do you remember that politicians dumped the idea of encoding signal to ensure that those who connect, pay? Clearly unreasonable!
  • Traffic fines by WhatsApp: why not? It’s cheap, quick and everyone uses it – as opposed to registered letters which, practically speaking, have ceased to exist.
  • Cell C is going down the drain – to the detriment of the empowerment dreams that went with it.

There are, at the margins, positive things happening… but I want to see more before I turn bullish on South Africa… The main issue is the absolute wastage that takes place through corruption, and that there are no consequences… those consequences must be furious… We’re starting to see some light at the end of the tunnel…

Piet Viljoen, Chairperson – RECM

The above sounds, and is, grim, however, there’s hope and at lower levels the pushback against corruption appears to be gaining momentum. Mr Magashule is (if guilty) the obvious target at the top level – if he’s prosecuted it will illustrate a commitment which all of us hold in doubt. Mr Zuma is a lost case.

Different: most companies make it difficult for employees to leave. King Price will pay an employee R50k, plus his first month’s salary, to leave if, directly after starting, he is miserable at work. The thinking is refreshing in that it only wants positive people to work there. Having fun rubs off on others and clients.

Property

It is common knowledge that property prices are down and that the middle sector of our housing market is buying rather than renting. The result is that, as conveyancers, we are working bed*nnered!  Marketers talk up a rise in homeowner sentiment but, on examination, the rise is marginal i.e. 1%: desperation marketing or a trend? Flat rentals show an 11% vacancy rate.

Part of the whole discourse is a grouping that believes that one should sell now as prices will inevitably drop as affordability issues bite.

Yesteryears darling, the listed property sector, is 50% down.

Snippets:

  • The investigation into timeshare, ongoing for some years, has not yet been put to bed. Clearly a hard nut to crack.
  • eThekwini has launched a 350 ha/ R10bn development on the old Corobrik site adjacent to Durban North.
  • Dispute resolution in community schemes: https://www.golegal.co.za/community-schemes-arbitration-csos/

Much more fun are the following:

  • Our state has at last un-clenched on state-owned farmland and will release some 530,000 ha for land reform. Good – kudos to Ms Didiza. 
  • The incestuous relationship between conveyancers and estate agents is (again) up for debate: there are many of us who buy work in one way or another – do you really want your reputation to be based on buttkissing? https://propertyprofessional.co.za/2020/10/22/attorneys-not-under-attack/
  • The fact is that default top-end sales commissions are indecently high and estate agents routinely give discounts on such sales. But wait, there’s more (see below).

Practice

Conveyancing is expensive and I do not think that the practice of subsidising bottom-end transactions by loading top-end transfers is sustainable. The fact is that top-end transfers mostly warrant a discount while bottom-end transactions are best avoided.

What leads me to this train of thought is having perused a Gauteng practice’s account this past week: the costs were clearly padded and were clearly excessive. 

This in turn is prompted by a synopsis of our Law Reform Commission’s recommendations on legal fees, which was published this week. Suggestions, described as ground-breaking, entails, amongst other things, that attorney-and-client fees be equated with party-and-party fees in litigious matters and that the poor would pay on a lower scale than the wealthy. See above!

The result is predictable – you would have to force the profession to take on non-paying work! If you do so, attention to detail might, ahem, be wanting? https://www.lssa.org.za/wp-content/uploads/2020/09/Legal-Fees-SALRC-Discussion-Paper-150.pdf

Bêtes noires of mine are:

  • The practice of declaring current estate values, in accrual antenuptial contracts, as zero to achieve an equal division of estates on divorce. This is not true and will potentially end as a dispute on divorce. If this is what is desired, simply say so instead of abusing a standard form to achieve the desired result.
  • Transfers to family, of property at under value: SARS routinely assess at a higher value and the transfer goes through on that basis. No thought, by those seek to save transfer duty, is given to the potential 20% donations tax which might follow.

I have not been able to find the judgement, but a report in News24, at the beginning of this month, held that intestate inheritances had been extended to opposite sex spouses by the Western Cape High Court. Confirmation by the Constitutional Court will need to follow. I would think a cinch.

Shorts:

Quotables

If you wish to seek peace of mind and happiness, then believe.

If you wish to be a disciple of truth, then investigate.

Nietzsche

Comment

I have a dream – a line most older people would remember; ex Martin Luther King. Great leaders inspire rather than just plan. We follow those who lead, not for them, but for ourselves. Not because we must, but because we want to. Worth a listen: https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action

Hallelujah! Pope Francis is set to take the Catholic Church out of the Middle Ages: “Homosexual people have a right to be in a family. They are children of God and have a right to a family. Nobody should be thrown out or be made miserable over it.” 

Lighten up

This week past oom Thysie, former conveyancer of Durban, died. Oom Thysie had a thing for a receptionist of ours, many years ago: she must’ve been 65 (clearly a hottie of yore – she had shown photos of her, attired in hotpants and one of those Texan blue  blokkies tie-above-the-navel shirts, posing seductively on a Cadillac bonnet) and he somewhat older. After about two hours of his dangling himself on our reception desk, I called him in and spoke earnestly of his being a pillar of society, an ouderling and married, nogal… His response was: Boetman, jy kan n hond vasmaak maar jy kan nie keer dat hy blaf nie! (You can tie a dog down, but you cannot keep him from barking).

Contributed by:
Daan Steenkamp Attorneys
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