New bill lays out development charges for property owners and developers
On 3 January 2020, the Minister of Finance published the Amendment Bill for public comment (to be submitted by 31 March 2020). The Amendment Bill has several important provisions which municipalities, land owners and property developers will need to be aware of. The official media statement released by National Treasury on the Amendment Bill can be accessed here.here
The purpose of the Amendment Bill, amongst other things, is to uniformly regulate the power of municipalities to levy development charges on land owners, to provide for policies and by-laws that will give effect to policies on the development charges, to establish an entitlement on the part of municipalities to withhold other approvals or clearance due to non-payment of development charges, and to provide for engineering services agreements.
In terms of the Spatial Planning and Land Use Management Act 16 of 2013 (SPLUMA), municipalities have the power to impose such conditions as are determined by the Municipal Planning Tribunal prior to the approval of a land development application. One such condition is the payment of a development charge. The power to impose this condition now appears to have been formalised by the Amendment Bill. Whilst the power to impose further conditions in terms of SPLUMA has not been revoked, the formalisation of development charges effectively creates an unambiguous basis for municipalities to recover costs incurred when installing or upgrading infrastructure for proposed developments.
Key features of the Amendment Bill of importance to municipalities, land owners and property developers are the following:
Some pitfalls of buying in a new development and how to avoid them
There is a need for the property sector to inform the public about potential difficulties and possible pitfalls that most buyers of new homes face when they come to making their choices.
This is according to Rowan Alexander, Director of Alexander Swart Property, who says that as this is unlikely to happen, the least estate agents can do is to repeatedly remind buyers that they must learn all they can about the negotiation and sale process, as well the dangers that might have to be avoided.
The first, is that the completed home could be significantly different from what the buyer thought they were getting, when they initially saw the plans and signed a purchase agreement.
He says laymen quite frequently misinterpret plans and some developers have a way of getting round 100% compliance with the plans. Those not familiar with plans can fail to realise that features such as cupboards, electrical plug points, floor and site levels, need to be explained and clarified. Buyers have been known to show surprise and annoyance when, for example, they discover that there are one or two steps between one rooms, or that cupboards cover only half the space they thought was allotted to them.
Get the best home loan interest rate: Fixed or variable?
Interest on credit is nobody’s friend, which is why it is always in your best interest to negotiate the most favourable rate, particularly on a big ticket item such as a home loan.
This is the sentiment of Carl Coetzee, CEO of bond origination specialists BetterBond, who explains that making an informed decision about the interest rate you’re committing to, whether fixed or variable, is a crucial part of purchasing a property.
With a variable interest rate the interest charged on the outstanding balance of the loan varies in accordance with changes to the market interest rate. A fixed interest rate, on the other hand, sees the rate of interest charged on the loan amount remaining unchanged for the duration of the loan/fixed period.
“The question around which is preferable, a variable or fixed interest rate, is largely contingent on the market conditions at the time of securing the loan, as well as the loan period,” Coetzee explains.