Property 24/10 - 223

New Property Management Trading Entity
Government has spelled out details of how the new Property Management Trading Entity (PMTE) will operate, after Cabinet last week approved the establishment of the entity to be located within the Ministry of Public Works.

Unlike other agencies, the PMTE will not have a board and will report directly to the Minister of Public works and the Director-General. An advisory committee may be formed in the future to advise the Minister on technical issues.

It’s a culmination of two years of work and part of the Department of Public Works’ Turnaround Strategy, which aims to tighten the screws on how the department deals with managing its approximately 11 000 properties.

The department has come under fire in recent years over its handling of some of the State leased properties.

Over 60s PDE agent workshops
A workshop was held aimed at those over 60 who need help with compiling their Portfolios of Evidence in order to apply for exemption from doing their NQF4 and NQF5 qualifications or their PDEs.

After the fully subscribed, and successful, over 60s PDE exemption workshop held by the Institute of Estate Agents, Western Cape, Annette Evans, regional general manager of the Institute, says this is an event that will have to be repeated a few times, in order for the number of agents who still have to get their exemption before June next year sorted out as required by the Estate Agency Affairs Board.

This is to assist those who are currently in the industry and who have held their Fidelity Fund Certificates for a continuous period of five years, and have a valid FFC for this year, she says.

Insult posts on social media by agents
Can an estate agency be held liable for defamatory messages posted on social media by an estate agent?

This question can best be answered by looking at a case study recently cited by the Law Department of the University of South Africa.

Let’s say that Tina, an estate agent, works at Horizon Realty Group in Johannesburg. She commissions a well- known clothing designer, Sizulu, who has a design shop in Cape Town and London, to create several dresses for her. They have a dispute over payment and Sizulu suspends her work on Tina’s dresses. Tina hears about this while she is working at the office and immediately sends out various tweets on Twitter and posts messages on Facebook accusing Sizulu of making “delusional accusations” and referring to the designer as a “thief who uses unethical business practices”, “a drug addict, a prostitute and an unfit mother who had lost custody of her child."

Interest on overdue levies reduced
As of the beginning of August, the prescribed rate of interest charged on overdue levies in sectional title schemes has been reduced from 15.5 percent to nine percent per annum.

Michael Bauer, general manager of IHFM, says while Prescribed Management Rule 31 (6) allows trustees to charge interest on arrear levy amounts, the amount is not stipulated, so the rate of interest is calculated according to the Prescribed Rate of Interest Act, whereby section 1(2) dictates what interest rate is charged on overdue amounts, which has now been reset by the Minister of Justice to nine percent.

Bauer says trustees can only charge the rate of interest above, unless it has been expressly decided by the owners at a general meeting and they have instructed the trustees to charge more. He says previous case law, in the case of Body Corporate Lynwood Gardens v Mureli Yegi, shows that even though interest charged on overdue amounts is not meant to exceed the rate set by the minister, if the instruction comes from the owners within the scheme, they can set it as high as they like.

Property value vs marketability
Homeowners who are looking to sell their property will be looking for ways to maximise the potential selling price that they are able to obtain in today’s property market.

The first distinction that sellers will need to make is the difference between the value of their property and the home’s current marketability. Adrian Goslett, CEO of RE/MAX of Southern Africa, says there are several factors that determine a home’s value, much as there are distinguishing elements that influence a property’s marketability in the current market phase and economic environment.

Goslett explains that the value of a property is determined by taking into account aspects such as the home’s type, size and physical features such as the number of bedrooms or whether it has a garden, whereas marketability is more about the readiness of the property to be sold, which points to its aesthetic appeal and condition.

Ins and outs of Capital Gains Tax
There are many different Capital Gains Tax (CGT) theories and opinions, but when this tax is analysed, it is not so daunting or complicated.

This is according to Craig Hutchison, CEO of Engel & Völkers Southern Africa, who says everyone is liable for CGT when they sell their fixed assets or following the death of the asset owner. CGT is a transaction based tax where gains or losses are brought to account annually by inclusion in the tax payer's annual income tax return.

The effective date of implementing this tax was 1 October 2001 at which stage a valuation should have been done of your property, and it then applies to the disposal of an asset on or after that date. Any profits accrued from this date onwards on the sale of specific capital assets will be taxed with CGT. Normal rental income from a property is revenue which is declared on your annual income statement and therefore not subject to CGT.

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