Landlords: Check would-be tenants
South African landlords are urged to protect themselves by thoroughly considering the financial background and affordability of prospective tenants.
This is according to Francois Venter, a director of Jawitz Properties who says a full credit check gives insight into how tenants manage their financial affairs.
A reference check with their previous landlord helps you find out if they paid their rent on time and kept the property in good condition, he says.
Venter notes that the latest Rental Payment Monitor from the Tenant Profile Network reports that 32 percent of tenants pay their rent late.
The first quarter of 2012 saw only 68 percent of tenants pay their rent promptly, while 8 percent of tenants made a partial payment, 13 percent paid late and 11 percent did not pay at all.
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What to consider when buying into HOAs
Gated communities and private estates have become common place in South Africa mainly due to their perceived feelings of added security and safety. What most people might not realise is that each of these communities and estates are ruled by a Home Owners Association (HOA) that has their own set of rules and regulations with regards to what can and cannot be done.
“HOAs are often confused with Sectional Title Schemes or Bodies Corporate, and whilst the two are similar there are many differences,” says Johann Le Roux, Director of Propell.
Before buying into a gated community or private estate, Le Roux advises that you ask the following questions with regards to the HOA for that estate:
- Make sure you know what the HOA rules and regulations are. For example are you able to sublet any parts of your property or run a business from your property? What are the styles and colours allowed? Are you allowed pets within the estate; and if you are allowed dogs, must they be walked on a leash when out in the common area? If you are unsure of any of the rules and regulations stated, seek legal advice.
Unscrupulous body corporate - remedy
While the majority of bodies corporate around South Africa are managed by well meaning, hardworking trustees, there are select schemes that are being unscrupulously run to the detriment of the owners involved.
In situations like this members of the body corporate or creditors are entitled to apply legally to have an administrator appointed to run the scheme on their behalf.
To apply for an administration order and have an administrator take over the decision making at the scheme, sufficient evidence needs to be presented and proven before this can happen. Evidence of maladministration, neglect, willfulness or dishonesty of the trustees or a risk for owners of units who may suffer substantial prejudice, etc. - are just a few of the points that need to be proven.
Because the Sectional Titles Act is not defining and clear enough with regards to the appointment of administrators, each case needs to be assessed individually before a court of law in making a decision about whether there is a need for an administrator.
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Other ways of scoring a home loan
With home loans no longer as readily available as they were in boom days, new ways of raising finance for property purchases are emerging.
According to Lanice Steward, managing director of the Cape estate agency Anne Porter Knight Frank, traditionally, potential home buyers got the necessary finance by going directly to a bank (usually the one with which they already dealt) or to a bond originator.
Before the National Credit Act this usually resulted in a satisfactory arrangement – and it has to be acknowledged that bond originators were often highly effective in obtaining favourable terms and conditions.
Steward says things are not so simple anymore.
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Investing in student accommodation
South African universities are struggling to find suitable accommodation and many institutions have now reached student accommodation crisis levels.
According to Seeff Randburg, students come from all over the country to attend universities in the main centres.
In Gauteng particularly, students are faced with a chronic shortage of safe, secure and affordable accommodation.
Academic institutions have identified the problem as being one of great concern.
Appeals for assistance to the Department of Higher Education, citing the effect of inappropriate or no accommodation near educational institutions on academic performance, resulted in various research projects that clearly indicated that many students are forced to live in appalling conditions, says the agency.
They are often far away from their universities, while many others tolerate unsafe, overcrowded, unhygienic accommodation not conducive to studying.
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Commercial property buying vs. renting
For many businesses, the question of owning their premises versus renting is not new since property for many is seen as both an asset and expense.
According to Jorge da Costa, chief executive officer of Improvon, factors for specific companies need to include plans for growth as well as the current and foreseeable economic climate, which influences the decision-making process.
The expenses involved in industrial and commercial property development indicate that buying or leasing can be costly.
Da Costa explains that property is seen as an asset, but can also be viewed as a massive expense.
Thus property decisions should never be made without comprehensive insight into your company’s future.
In the current economic cycle, companies are watching their finances closely and credit is tight.
A business may need anything up to half of the purchase price as a deposit and in the commercial and industrial property industry this could amount to millions of rands, he says.
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Home defects and dodgy sellers
South African home buyers are urged to conduct a home inspection before signing the property sale agreement, according to Eric Bell of Inspect-A-Home.
Property24 recently published an article on why it is important to hire a property inspector. Read the article here.
In the article, Bell explained how a couple ended up paying R150 000 over and above the purchase price of their new home.
What they didn’t know when they signed the sales agreement was that they would need to replace the roof sheeting, rotten door frames, and a leaking geyser before they moved in.
They signed a disclosure document stating that the house was in good working order, so they couldn’t return to the seller or estate agent with their complaints or bills, he said at the time.
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