Adrian Goslett, CEO of RE/MAX of Southern Africa, says there is no right or wrong answer to this question. However, each option should be cautiously worked out from a financial point of view and carefully considered according to individual requirements.
“In the past it was considered more cost effective to build a new home, but more recently the recession and reduction of property prices coupled with increased building costs has meant that buying an existing home is now often the more cost effective option,” says Goslett.
This is backed by a report released by Statistics SA which shows that building costs have increased substantially over the past year. This if reflected in the fact that the value of building plans passed by the larger municipalities increased by 4,9% during the period January to June 2011, compared to the same period in 2010. This calculation is concluded at the current building prices. The largest increase in building costs reported was for residential buildings, which increased by R1,12 million or 8,9% for the same period.
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What damages can my landlord claim?
A Property24 reader asks:
On termination of a lease agreement to what extent can the landlord claim for damages? Can items include painting of walls and general cleaning? And if items were defective before occupation and brought to the landlord's attention, can the landlord claim for those items if he did not fix them?
Alan Levy, an attorney at Alan Levy Attorneys who specialises in evictions, rent recoupment and landlord / tenant law replies:
The landlord, on termination of the lease agreement, can claim from the tenant damages for any defects to the premises i.e. if the walls were tarnished by the tenant or if the premises were left in an unclean way, these costs can be claimed by the landlord.
If items such as these were defective before occupation and brought to the landlord's attention, then the landlord cannot claim for these items, once the lease is terminated.
In general, any conduct by the tenant which causes damage to the premises may be reclaimed by the landlord. If the premises were damaged before occupation and this was properly recorded by the tenant then these damages cannot be claimed by the landlord from the tenant.
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Auctions attract buyers and investors
South African would-be home buyers are actively looking and placing their bids at auction houses in search of good value for money residential properties countrywide.
Auctioneers are reporting an influx and purchasing appetite from buyers and investors from all walks of life.
Buyers and investors turned out in great numbers at the recent auctioning of 49 sectional title units in Ruimsig area of Roodeport in Gauteng.
Park Village Auctions’ Michelle Liebenberg says the units are mostly two bedrooms and one bathroom in various estates located close to Monash University.
Currently, most of the units are rented and she expects demand to come partly from the existing tenants. She says the price bids were better than expected and compared with normal retail prices, they were genuine bargains.
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Attaching a tenant’s possessions
Obtaining a hypothec may be a way of achieving payment from a defaulting tenant, but is it worth the cost and the hassle?
The explanation of legal terms used in property can sometimes be so complicated that only the brightest minds eventually pick up the clear, usually simple, meaning for which they were aiming – and this, says Lanice Steward, MD of Anne Porter Knight Frank, is often the case when the term ‘hypothec’ crops up.
“A hypothec gives a creditor a non-possessory security interest in a debtor’s real property and a preferential right to claims paid out of that property if and when the debtor defaults.
“The hypothec, unlike a pledge, gives neither possession nor ownership – but does entitle the creditor to a preferential claim on the debtor’s goods,” she says.
Steward says this has particular relevance when a tenant falls behind on his rental payments over a long period. In these cases, the landlord may apply through the court for a hypothec on the tenant’s goods. "However, such an order does not allow the creditor to act on his own account: the attachment and removal of the goods for subsequent sale have to be done by the Sheriff of the Court."
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