Property 24/10 - 6

Global housing markets face double-dip
Standard Bank has warned that housing markets in a number of countries now face the dreaded double-dip scenario, with South Africa's residential property market also not yet entirely out of the woods.

Standard Bank economist Johan Botha says in the bank's latest monthly housing overview that hopes of a rapid V-shaped recovery in global housing markets have been dashed with latest data from the United States pointing to a sharp drop in sales volumes in recent months.

Botha says housing sales in the United States, the world's biggest property market, declined more steeply in December 2009 than in any month in the four decades that such data have been tracked. Sales declined further in January and February. Botha says it's therefore not unlikely that house prices in the United States may weaken noticeably over the coming months. "A double-dip is highly likely."

Luxury 'bargains' abound
Liquidated developers in the super-luxurious property market are leading to luxurious "bargains".

Bidders on these properties at auctions can expect to buy them for up to 20% below market value.

So says Rael Levitt, CE of Auction Alliance, which is bringing a growing number of luxury properties to the market as developers experience cash-flow problems.

Insure your property properly
It's a good idea to review your insurance provisions from time to time and make sure you have the correct cover for your home and any other properties you own.

"As a priority, you need a policy that protects you in the event of damage to your home by storms, fire, flooding or any other major disaster. This is called homeowner's insurance and is essential even if your home is not bonded, or you could find yourself having to meet substantial repair bills or rebuilding costs out of your own pocket," says Harcourts Africa CEO Martin Schultheiss.

"Even worse, if your property is bonded and you don't have the proper insurance, you could end up without a home but still owing the bank the outstanding amount on your home loan."

Court: Imprecise documents a no-no
In a recent case heard in the KwaZulu Natal High Court, the lessee of a property, who claimed that in terms of his lease agreement he had an optional right to buy it, was ruled against by the court on the grounds that the description of the property in the lease agreement was imprecise and likely to lead to confusion.

Mike Greeff, CEO of Greeff Properties, has pointed out that this is one of a number of cases heard over the last few years in which a lack of clarity in the documentation scotched the appellant's case.

Agents must disclose defects to buyers
Estate agents are obliged in terms of their code of conduct to disclose any known defects to potential buyers.

Harcourts Africa CEO Martin Schultheiss says although agents usually act on behalf of the sellers in property transactions, their code binds them to also protect the interests of buyers throughout the transaction - and thus to ensure that sales contracts are not one-sided or full of loopholes.

"And this has become even more important since a recent Supreme Court of Appeal decision that strengthens the position of sellers who might be challenged on the 'voetstoots' clause.

New law no threat to HOA rules
Even when it becomes law in October, the new Consumer Protection Act will not give homeowners in residential estates unlimited rights to do as they please without regard to the management and conduct rules of their homeowners' associations (HOAs).

So says Jeff Gilmour, president of the Association of Residential Communities (ARC), in response to recent reports that HOAs will be infringing the consumer's "right to choose", entrenched by the new legislation, if it accredits only certain suppliers and service providers to work on their estates - and that residents of the estates will thus be justified in challenging or ignoring such accreditations.

"Following this line of reasoning, it would then also be true to say that the HOA is interfering with the homeowner's 'right to choose' when it sets down architectural guidelines for the estate, or makes rules about parking and pets, or even when it requires residents to pay their levies.

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