Property 24/10 - 222

SAPOA: speed up spatial planning
The South African Property Owners’ Association (SAPOA) is appealing to the Minister of Rural Development and Land Affairs Gugile Nkwinti to invoke discretionary powers available to him in the Spatial Planning and Land Use Management Act, 2013 (SPLUMA) to prevent damaging logjams in the property development sector. SPLUMA replaces the much-vaunted Development Facilitation Act, 1995 and is supported by SAPOA from a legislative perspective. However, property development applications, and appeals - among other matters, are being affected by the transition, creating not only significant delays but also unnecessary bureaucracy.

“For this reason, SAPOA is requesting that Minister Nkwinti invoke subsection d) of Section 60 of SPLUMA. “This provision allows the Minister to prescribe a date by which property development applications, appeals and other matters must be dealt with,” says SAPOA CEO, Neil Gopal.

New agency to manage state property
The establishment of the State Property Management Agency, which will oversee the management of government’s massive property portfolio, has been approved. The announcement was made at the post-Cabinet media briefing in Cape Town on Thursday.

Minister of Public Works, Thulas Nxesi, explained that the agency was aimed at professionalising the state property portfolio, saving costs for client departments and improving government services to the public by improving the quality of public buildings. Minister Nxesi said the agency would ensure more productive use of vacant properties, because there were many unutilised properties across the country, especially in small towns and cities. He said the intention was also to create employment.

Home buyers start to put on the brakes
The latest statistics from BetterBond Home Loans show that the interest rate increases announced in January and again in July, are finally starting to have an effect on buying activity in the residential property market.

August’s figures show that the net number of home loan applications received by BetterBond declined year-on-year by 2.8 percent, which was the first such decline since interest rates were increased by 50 basis points in January.

BetterBond CEO, Shaun Rademeyer, says it was the second rate increase of 0.25 basis points in July that seems to have finally made a dent in the robust demand the market has been experiencing for the past two years, and then only because it made prospective buyers pause to think more carefully about being able to afford a home loan instalment as well as their other debt repayments if rates should rise again.

Commercial sublets and bankruptcy
With commercial property management, there are cases that differ from residential letting in that there tend to be more sub-leases than in residential rentals.

This is according to Michael Bauer, general manager of the property management company IHFM, who says it often happens that one company will rent a whole building and then sublet portions of the space they have signed for, and it must be remembered in these cases that the entity ultimately responsible for the rent is the company that signed the original lease with the landlord.

But what happens in cases where the company that holds the lease goes bankrupt?

He says most commercial leases will be held by a juristic person, that is, a company or a close corporation. If the company were to go under, the liquidator steps in and performs the duties of the tenant, and must collect rent from sub-lets as well as pay over rental to the landlord.

Maximise your rental property returns
Are you in the market for a rental investment property? If so, then it is imperative to take your time and do the necessary research to ensure that the property you buy suits your needs perfectly.

A reputable, experienced estate agent can be of valuable assistance in this regard, says Adrian Goslett, CEO of RE/MAX of Southern Africa, who says it is vital to gather as much information as possible from reliable sources before venturing into the rental property market.

“The adage that ignorance is bliss may apply to certain aspects of life; however, property investment is certainly not one of them. As a tangible asset, a rental property should appreciate in value over time. While this is not always guaranteed, there are certain factors that investors should consider to assist them in maximising their rental property’s potential investment returns,” says Goslett.

Property in trusts: trustee changes
There are still people who prefer to buy property in a trust, where the property has become part of the overall financial planning of the family or where there is a large estate.

The procedures are that the trustees must apply to the Master of the High Court, and be registered with the Master’s Office. The will or trust deed will be lodged at the Master’s Office with documentation and if the Master is satisfied that the requirements have been met, he will name the trustees as such.

“But what happens after a time, one of these trustees dies or resigns?” asks Lanice Steward, managing director of Knight Frank Residential SA.

Often if one of the trustees has died or one of them resigns, the others forget to go through the necessary procedures to get them removed.

Who owns your property's title deed?
A title deed is the legal document which legally confirms the ownership of a property and is filed at the Deeds Office, and it contains details of the property.

From the time that you register a mortgage bond with your bank on the property that you purchased, they keep your title deed in safe custody until such time as your home loan is fully paid. Up to that stage they are legally entitled to keep the title deed as it effectively belongs to the bank who has loaned you the money to buy the home.

It is a custom for the banks to provide homeowners' insurance (HOC – homeowner's cover) for owners with a home loan, which insures the property against damages; this is a requirement of the home loan before it is granted. You may opt to arrange your own insurance, and if the bank is satisfied with the underwriters, they will allow this.

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