17 January 2009

Restriction on purchase and rental of immovable property

Real Estate agents and sellers alike should be aware of the pitfalls involved in selling or letting immovable property to foreigners present in South Africa.

In terms of section 42 of the Immigration Act 13 of 2002 (the Act), no one may let or sell or in any other manner make available immovable property to an illegal foreigner. Anyone residing in South Africa without a temporary or permanent residence permit is regarded as an illegal foreigner, and anyone who does not comply with the Act and aids or abets an illegal foreigner, is guilty of an offence and liable to a fine or imprisonment for up to 18 months (section 49(6))

Crucially, the Act provides that, in the event of any criminal proceedings arising from a contravention of these provisions, the accused cannot rely on not knowing the illegal status of the foreigner if it is proved that the accused ought to have had reasonable knowledge of that status.

An agent or seller contracting with a foreigner present in South Africa has a duty to ensure that the person is in possession of one of the permits referred to in the Act, including, but not limited to a:

  • temporary residence permit;
  • visitors permit (which is normally granted for a three month period and is renewable);
  • study permit;
  • business permit;
  • medical treatment permit;
  • relative's permit;
  • work permit;
  • retired person permit; or
  • permanent residence permit.

Estate agents are advised to incorporate validating residence status of purchasers into their pre-sales checklist to limit the risk presented by such transactions.

Carol Wiggett & Ashley Meyer

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