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10 October 2013

Be wary of unscrupulous administrators
Over-indebted consumers who are under administration need to be aware of unscrupulous administrators who abuse the process by taking advantage of their lack of knowledge, warns the National Debt Mediation Association (NDMA).

NDMA CEO, Magauta Mphahlele, says many consumers are put under administration without even knowing it- and without the process, its costs and implications being explained to them.

Credit Bureau statistics show that more than 2.7 million consumers have judgments or administration orders against their names.

An administration order is a legal remedy available to consumers who are unable to pay their debt and whose total debt does not exceed R50 000. An administrator, who is appointed by a court, is empowered to take control of the consumer’s financial affairs and manages the repayment of debts due to creditors.

Mphahlele says the intended purpose of administration orders is to help some consumers to get on top of their debt, as all legal action is placed on hold once it is granted and debt repayments are rescheduled to affordable monthly instalments. But, she says in many instances the process does not achieve anything except to dig a deeper hole for consumers due to the costs of the process and abusive practices by some administrators.
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More SA tenants paying on time
According to the latest TPN Rental Payment Monitor, the second quarter of 2013 saw the highest percentage of residential tenants in good standing since 2007.

Nationally, 71 percent of tenants paid their rent on time and in full, four percent paid within a grace period of up to seven days, and 11 percent paid late.

Francois Venter, Director of Jawitz Properties, says this adds up to 86 percent of tenants being in good standing.

Gauteng has the most rental accommodation, with 41 percent of South African households renting in the province. He says the report indicates that Gauteng tenants are now on par with the national average of tenants in good standing - this being the first time since the inception of the Rental Payment Monitor.

Another pleasing statistic from the report shows that only six percent of tenants in South Africa did not pay their rent at all. Venter says this figure has decreased by two percent compared to the first quarter of the year.

Despite non-payers decreasing, Venter says there are concerns in the bottom end of the rental market. He says nearly a quarter of tenants are renting in the below R3 000 per month bracket which has the highest non-payment rate.
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Buying property before selling
Imagine being in a predicament where you would like to buy new property, but could miss out on the opportunity due to receiving a less-than-desired offer on your existing property. Do you accept the low offer in order to secure the necessary finance in time for the new property, or do you risk losing out by waiting for a better offer on your existing property?

According to Gary Palmer, CEO of Paragon Lending Solutions, homeowners often find themselves in these situations and either sell at a lower value, or miss out on buying a new property altogether, as they are unable to put down a substantial deposit in time.

He says the cost of home finance in South Africa has increased, and with difficulties in managing personal debt, many potential property buyers do not have the additional finances to buy a new property before the sale of an existing property.

He adds that this situation is further compounded by banks taking much more time to complete a loan because of their focus on unsecured lending (due to regulations like Basel 3), which means that long-term loans held by the banks would become more expensive.
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Illegal building - I bought the house
A Property24 reader asks:

My wife and I purchased a property in January this year in Lakeside, Cape Town. We are wanting to do a few alterations so my architect went to Council and it has come to light that the previous owners went ahead with building, despite being told by Council that they couldn’t. So we’re sitting on an illegal dwelling. We were never told any of this by the estate agent.

Are we, as the new owners, now completely liable to 're-do' the whole house?

Sika Ackotia of Schindlers Attorneys, Notaries & Conveyancers advises:

The absence of approved building plans for your home, constitute a latent defect in terms of Odendaal v Ferraris (422/2007) [2008] ZASCA 85. However, most sale agreements contain voetstoots clauses, which basically mean that the property is sold in the condition ‘as it stands’, meaning with all defects, and that the purchaser accepts the property in this condition (in your case, without plans).

If there was no voetstoots clause in your agreement, then you can claim from the seller for the cost of legalising your home (in getting plans drawn up and approved, and for any alterations that you might have to make to get the plans approved). If the cost of legalising your plans is very high, then you could also cancel the agreement, return the house to the seller, and claim a refund of your purchase price. However, since this recourse is based on common law remedies called the aedilitian remedies, there is a limit on the time periods within which you need to claim from the seller and we would advise you to consult further with your attorney in this respect.
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Institute fo Estate Agents WC 76th AGM
The Institute of Estate Agents, Western Cape, is to hold its 76th Annual General Meeting on the 17th October, at 6pm for 6:30pm, at their offices in Sheldon Way, Pinelands.

Minister Madikizela, Department of Human Settlements, will be the guest speaker and will be talking on “Transforming the estate agency sector in South Africa”, something that has been much discussed over the last few years, says Annette Evans, regional manager for the Institute.

There will be cheese and wine and the meeting is free of charge to members. Non members are welcome to attend at a cost of R100. Voting at the meeting will only be open to members of the Institute.
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Applying for a home loan - read this
When applying for a home loan, one of your most important considerations should be securing the lowest interest rate possible. And when the home loan is granted, you should do everything you can to reduce the term and the interest that you pay. This will save you a great deal of money in the long term.

Kay Geldenhuys, Property Finance Processing manager at ooba, says people tend to accept that their bonds require a monthly payment that they have no way of influencing. In fact, she says there are many things that you can do that may alter the amount of interest you end up paying and the term of your repayments.

A deposit makes all the difference

If at all possible, raise the biggest deposit that you can before buying a home, or save up for a large first payment while you are waiting for transfer to go through. “With a deposit, you will save money on your monthly repayments and be able to pay off your loan faster, saving thousands of rands and years off the lifespan of your bond. A R20 000 deposit on a R1 million home loan will reduce your total repayments by R41 656.”

And, the bigger your deposit, the better your chance of getting a lower interest rate and reducing the total interest charged on your bond.
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Global house price growth at a glance
House prices around the world rose by 2.4 percent in Q2 2013 with European property prices rising for the first time since 2010, according to Knight Frank’s Global House Price Index.

Prices rose in 37 of the 55 countries tracked by the index in the second quarter of 2013 (two years ago, prices rose in 27 countries).

The report reveals that Dubai leads the annual rankings, recording price growth of 21.7 percent in the year to the end of June.

Furthermore, it would appear, the Emirate’s housing market has gained momentum since late 2012, while its prime market led the way, mainstream prices are now following suit, explains Kate Everett-Allen, Knight Frank international residential research.
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