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Property 24/10 - 142

7 February 2013

Buy-to-let and tenant trends in 2013
The Tenant Profile Network (TPN) data for the third quarter of 2012 indicated that tenants were making their rental payments responsibly.

According to Michelle Dickens, managing director of TPN, in the buy-to-let market currently, demand outstrips supply and landlords owning properties in these price ranges can pick and choose the right tenant.

However, she warns that although there may be lots of tenants waiting to snap up a property, landlords and property owners and estate agents should not ignore the basic rules of checking the previous tenant behaviour and credit check information.

“Property investments require active involvement from the investor – managing the rental agent, managing agent and tenant,” she says.

Dickens says buy-to-let investors want returns on their investments and non-paying tenants will put pressure on the owner to meet the monthly property expenses without earning an income.
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Tips for buying sectional title homes
Buying a house in a complex or a flat often seems to be a more affordable home ownership option than a freestanding house.

For one thing, sectional title can give you access to property in the area of your choice that would otherwise be too expensive to buy outright.

And, being part of a like-minded community of home owners is a huge draw card.

However, sectional title home ownership is also quite complicated. If you don’t do your homework, you could end up losing money.

When you buy a section of a property, it means you acquire access to an undivided share of a common property. The two together are known as a unit. All the owners collectively own everything that is not part of a specific section.

What people don’t realise is that sectional title is a form of joint ownership
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5 mistakes to avoid in home insurance
Thousands of South Africans who have made significant sacrifices to buy homes could face financial hardship in the event of their homes being damaged or destroyed, simply because they didn’t take the basic steps required to make sure that their houses were correctly insured.

Denise Shaw, head of Standard Insurance Limited, says South Africans tend to take homeowners’ insurance for granted and are driven by the market value of homes in the area when purchasing cover.

While this assumption is logical, it is the incorrect way of insuring a home and could lead to financial loss if homes are extensively damaged.

“Homeowners need to remember that major repairs to a house will incur costs at the rates that apply to materials, labour and so forth at the time that the damage occurs.”

Rates will differ depending on finishes, design, location of property, and so on and these costs will apply regardless of the age of the house.
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How long must I pay occupational rent?
A Property24 reader asks:

Is there a set period for how long an occupational rent agreement should be honoured after signing the sales agreement? For example 1, 2, 3 months or must a buyer keep on paying occupational rent until the transfer of the property takes place? 

Arnold Maritz, co-owner of the Lew Geffen Sotheby’s International Realty franchises in the Southern Suburbs and False Bay, Cape Town, advises:

No, there is no statutory limit for the period for which occupational interest may be paid. It is generally a term of a deed of sale that occupation will take place on a particular date and if the transfer takes place after the date of occupation, occupational interest is paid at an agreed amount for the period from occupation until transfer. It is important to have a market related occupational interest, or otherwise the purchaser might be tempted to delay the transfer. 
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Can levy double & non-paying owners?
A Property24 reader asks:

My first question pertains to a special levy that our body corporate in our estate has imposed. They have decided that we should pay a once off special levy of R5 900 to offset the debt that was created through non-payments of the owners in the estate. Is this our problem? There was promise of an AGM to discuss this special levy which was never held. Is this allowed? 

My second question is with regards to our normal monthly levy. The body corporate have decided to increase our monthly levy contributions to more than double the monthly amount. The reason they gave was that there has never been an increase before (the estate is only a few years old). Can they so this? 
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Can I cancel my sole mandate?
A Property24 reader asks:

Should a sole mandate be cancelled before the time period (for whatever reason), is the seller liable for anything? What must the seller do to clear their name/mandate?

Francois Venter, Director of Jawitz Properties advises:

The seller needs to first check the terms of the written sole mandate agreement. If the contract is for a fixed period then it is subject to the terms of the Consumer Protection Act (CPA) 68 of 2008. In terms of the Act, a cooling off period may apply, depending on how the estate agent and the seller made contact with each other. If the seller made contact with the agent, no cooling off period will apply once the agreement has been signed, but if the estate agent made contact with the seller, a five day cooling off period will stand from the day the sole mandate agreement was signed. If the seller chooses to cancel within the five day cooling off period, this will not trigger any financial or legal consequences. In other words, if the estate agent approached the seller directly, or used direct marketing tactics such as dropping off a leaflet in the seller’s mailbox and then  a sole mandate was signed, the seller has five days to change his/her mind, no questions asked.
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Buying property and your credit record
Unless you have a clean record of servicing debt, your bank will be unlikely to grant you a home loan. But since a credit record isn’t something that most people think about unless they are in financial trouble, how do you go about making sure yours is in good condition? 

“When you start planning to buy a house, the most important thing to do is get your financial affairs in order early,” says Kay Geldenhuys, manager of property finance processing at bond originator ooba. “A good credit rating can’t be achieved overnight, so if you are considering buying a house in the next few years, you should do what you can to score well right away.” 

The golden rule
The golden rule of credit is that you can’t get it until you’ve had it. This isn’t as impossible as it sounds – it simply means that you should start small to prove that you’re responsible so that your bank will look favourably on your home loan application when the time comes. “While it may seem financially responsible not to get into debt, the banks have no other way of assessing what you will do with credit.” 
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