Cape property's remarkable recovery
In just under seven years the residential property market in key areas of the Western Cape is again approaching the levels last seen before the spectacular downturn in 2007/ 2008, when it lost 39 percent of its value and dropped 46 percent in unit sales. This has emerged in statistics highlighted by Pam Golding Properties (PGP).
The recovery is remarkable, and most notable in the traditionally, top-end value quarters of Cape Town. Not surprisingly, the best performers in the recovery have been where the money has mostly always been - the Atlantic Seaboard, City Bowl, CBD, and certain areas of the Southern Suburbs.
With a proven track record, these sought-after locations remain sustainable throughout the various property cycles, enjoying a high demand from local buyers as well as those from around the country. This includes regions such as Gauteng and KwaZulu-Natal, a factor further contributing towards the stock shortages being experienced in these popular Western Cape suburbs.
IEASA Western Cape to hold AGM
The Institute of Estate Agents, Western Cape, will hold their Annual General Meeting at Kelvin Grove, 144 Campground Road, Newlands, on 18 September from 11am to12 noon. The Institute is celebrating 77 years of service to the industry and the AGM will be followed by a lunch event.
Annette Evans, regional general manager of the Institute says Bill Rawson has been in the real estate industry for 43 years and he will be talking on ‘Balance’, something which many estate agents possibly struggle with as they work erratic hours.
More training needed for agents
There are certain agents who are complaining about the stringent requirements now necessary to enter the real estate industry, which will necessitate new agents becoming interns for at least a year, completing their NQF4 in real estate, a logbook for a year that is assessed through the Estate Agency Affairs Board and a final four-hour open book exam.
In addition to this, agents will have to gain Continuing Professional Development (CPD) points each year through various means. This is according to Lanice Steward, managing director of Knight Frank Residential SA, who says a recent court case highlighted in a Smith Tabata Buchanan Boyes property law update shows just how all this training for agents becomes necessary.
Theft of sectional title scheme funds
According to a recent Personal Finance report, the Estate Agency Affairs Board (EAAB) is dealing with another theft by a managing agent - this being the most recent in an ongoing series of similar thefts of substantial sums of money.
The legal officer for the EAAB confirmed that the Cape Town-based managing agent involved has agreed to repay R400 000 to one body corporate and that another theft is being investigated. The prospect of the managing agent repaying the stolen money sounds positive, but it does not address the scheme’s current cash flow needs. However, any owner who sells his or her unit before the full amount is repaid will not recoup the loss.
The fact that the EAAB operates a Fidelity Fund against which schemes can claim when managing agents steal their savings is also some comfort. However, such a claim can only be progressed once the persons who stole the savings have been sequestrated, so it can take four to seven years to finalise the claim and receive the compensation. This is cold comfort to owners facing the choice of paying special levies or borrowing funds at high interest rates.
Property sales and deposit refunds
Under South African common law, the general rule that applies when an agreement fails is that the parties must restore the status to the position they were in before the agreement was signed, unless both parties have agreed that there is an exception to this rule.
Lanice Steward, managing director of Knight Frank Residential South Africa, says when there is a sale of a property involved and the buyer puts down a deposit but is seen to have defaulted on the agreement, the seller can cancel and keep the deposit.
But what does this mean for the buyer and why would he pay a deposit?
Usually the payment of a deposit is advisable when a buyer wishes to show his good intent and commitment to the purchase of the property. In the majority of cases, the buyer is required to get finance and in most contracts there is a 20 to 30 day provision made so that the buyer can apply for a bond (and this time frame should be enough). She says the seller would have to take his home off the market for this period, so it only seems fair that the buyer commits in some way, hence the deposit payment.
Transfer of property to heirs
One of the facts that those drawing up wills are not frequently aware of is that no transfer duty is payable on property bequeathed to heirs.
This is according to Grant Gunston, Senior Partner of the Cape legal firm Gunston Attorneys, who says this applies even when the heirs agree to distribute the property or properties amongst themselves, in a different way to that envisaged by the testator (conveyancing fees are however, still payable.)
If the heirs decide to sell the property (out of the estate) to an outsider, transfer duty will then apply - but in most cases will be paid for by the buyer.
Where a property is transferred to heirs, this can only take place at the end of the winding up process, i.e. when the Liquidation and Distribution account have lain open for inspection and objection for the prescribed period of time. If there are then no objections, the Master of the Court authorises the executor to go ahead with the distribution, including transfer of the property.