Property 24/10 - 166

Watch out for dodgy landlords
Tips on avoiding dodgy tenants are plentiful, but what about avoiding dodgy landlords?  Unfortunately, there are just as many landlords who neglect their responsibilities towards their properties as there are tenants who do the same.This is according to Francois Venter, Director of Jawitz Properties, who says the most important thing is to know upfront, before signing a lease, what your prospective landlord is responsible for and whether or not these responsibilities are reflected in the lease.

He says the landlord or owner of a rental property is responsible primarily for structural maintenance. “This would generally include maintaining the roof, exterior walls, attending to any problems with damp, and the geyser.”

Tenants are responsible for wear and tear maintenance such as keeping gutters clean, maintaining the swimming pool and treating the property with respect. When the lease is up and a property is handed back to a landlord, it should be in the same condition as it was when the tenant moved in. Venter says the only grey area that can become an issue is what is fair wear and tear. He says it can be difficult to determine.

REITS and tax implications
The Real Estate Investment Trust (REIT) regime is set to usher in a new era for the listed property sector by affording certain tax advantages to qualifying entities and providing certainty in respect of the tax treatment of property loan stock companies. However, as the legislation is new and untested, uncertainties and anomalies exist, which could result in unforeseen tax implications for any company wishing to list as a REIT or a joint venture company where a shareholder is about to become a REIT.

This is according to Gary Vogelman, executive at ENS (Edward Nathan Sonnenbergs), who says in spite of the tax benefits that can be enjoyed by a property company and its shareholders upon the listing of such property company as a REIT, it’s crucial to be well-read in the potential pitfalls of the legislation.

“It is highly recommended that any company wishing to list as a REIT or a joint venture company where a shareholder is about to become a REIT obtain detailed tax advice in relation to the tax implications which may arise in this regard and obtain an understanding of the potentially relevant anomalies which may arise in respect of the implementation of such listing as a REIT,” he says.

Over 60s agent exemption workshop
The Institute of Estate Agents, Western Cape, is running a workshop for those who are over 60 and need help with compiling their Portfolios of Evidence in order to apply for exemption from doing their NQF4 and NQF5 qualifications or their PDEs. The workshop will be held on the 15th August 2013, from 10am to 12:30pm at the IEA, Western Cape offices in Sheldon Way,Pinelands, and costs R450 for members and R650 for visitors.

The requirements for applying for exemption are: the agents must have held their Fidelity Fund Certificates for a continuous period of five years, have a valid FFC for 2013 and be 60 years or over.

Annette Evans, regional manager for the Institute of Estate Agents Western Cape says that any principals or agents who are over 60 who wish to receive exemption need to get their applications in as soon as possible.

Buying and selling property at auctions
South Africa is currently experiencing a surge of interest from both buyers and sellers of property at auctions, and in some cases, this translates to huge amounts of money being achieved at auctions.  According to Wikipedia, an auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder. In economic theory, an auction may refer to any mechanism or set of trading rules for exchange.

The auctions began with the woman the auctioneer considered to be the most beautiful and progressed to the least. It was considered illegal to allow a daughter to be sold outside of the auction method.

The Romans used auctions to liquidate the assets of debtors whose property had been confiscated.

Rethink your home selling strategy
If your property is spending months and months, or worse, years on the market, it’s time to rethink your strategy. This is the word according to Mike Greeff, CEO of Greeff Properties,  who says consider the fact that many buyers start looking for a home months before they actually make an offer to purchase, so if your home has been advertised in the same way, week after week, buyers tend to start ignoring it.

He suggests making use of new photographs to highlight completely different angles. “Show some interior shots if the outside shots are not causing a stir, find a higher angle or a lower one, or shoot the house from a different angle. Try an evening shot as opposed to a daytime image.” 

Greeff advises sellers to approach the exercise with the view to marketing a lifestyle as opposed to a house. He says let your agent know what you enjoy most about your home so he or she can add emotive impact to a sales pitch, and ideally rewrite the advertising blurb.

How to avoid buyer's remorse
Worldwide, in good and bad economic times, financial consultants have always advocated investing a significant portion of their clients’ portfolio in property.This is according to Tony Clarke, Managing Director of theRawson Property Group, who says in South Africa certain commentators have been advising people to stay away from property assets, which has led to ongoing debates with, as yet, no firm conclusion. 

Clarke says the impression he gets is that those who have come out so firmly against property as an asset class have in some cases invested unwisely in property and are now damning the whole sector on account of their own mistakes. "Such people will often point to the probability that, in the next two or three years, residential house price growth is likely to be no higher than three percent in real terms." 

He says there are, however, many others who, having done their research before buying, are happy with their purchases and are not suffering from buyer’s remorse. 

Buyers must check building compliance
The best advice that can be given to a prospective buyer of a residential property is to first check that the dwelling is built in accordance with the approved municipal plans. Alternatively the buyer should include a suspensive condition in the Offer to Purchase that puts the obligation on the seller to provide a copy of the municipal approved plans of the dwelling, within a reasonable period of time so that the buyer can compare the dwelling to the plans.

This is according to Wayne Albutt, the Rawson Property Group’s Regional Sales Manager for the Western Cape, who says where a buyer accepts the transfer of a property and then discovers that it does not conform to the approved plans, he can find himself in serious trouble. He explains that the reason for this is, in terms of the Consumer Protection Act (CPA), if the seller is engaged in a one-off transaction (i.e. if the sale is not part of his usual day-to-day business) the Voetstoots Clause still applies, subject to any other relevant clauses agreed to in the Deed of Sale.

He says this means that the buyer is in effect buying the property as it is, regardless of whether it conforms to the plans or not.

Increase in Green star rated buildings
In June, the Green Building Council of South Africa (GBCSA) approved six new buildings for green certifications, showing an escalation in green buildings as developers and progressive businesses increasingly embrace sustainable building practices.  According to the GBCSA, these new ratings take the total number of Green Star rated buildings in South Africa to 36, and include buildings such as the Department of Environmental Affairs Head Office, which has scored a 6 Star Green Star SA rating – the highest rating possible and a first for a national government owned building in South Africa.

“The GBCSA is very encouraged to see this spike in the number of buildings achieving Green Star SA ratings,” says BrianWilkinson, chief executive officer at GBCSA.

justify;"> He says they are confident that the green building movement in South Africa will continue this upward trajectory and that they will increasingly see green building practices becoming the norm. 

“The industry is embracing this absolutely necessary shift towards sustainable practices and it is exciting to be part of this change,” he says.

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