'Estate agents are breaking the law'
CityVision - South Africa
There is an urgent need for consumer education in the township property market, says Thabo Manganyi, transformation director of the Institute of Estate Agents (IEA) in the Western Cape. He says that many buyers, sellers and estate agents simply have no idea of the basics of property laws and practice. As a result, many people aren't the legal owners of the houses for which they have paid, and many estate agents break the law daily by operating without being licensed - and get paid for it.
"Buying and selling property isn't child's play," says Manganyi. "To protect property owners' interests and to ensure that taxes are paid, there are minimum legal requirements that must be met. The seller and buyer must sign a contract. A conveyancing attorney must register the sale in the Deeds Office and see to it that there's a valid electrical compliance certificate and that the seller pays the current year's rates on the property, that the buyer pays the transfer duty and the legal costs and, of course, that he pays the seller".
Yet, says Manganyi, many people buy and sell property simply by agreeing on the terms, recording them in writing in the form of sworn statements, and handing over the property in exchange for payment. The change of ownership isn't recorded in the Deeds Office, which means that the buyer isn't the legal owner of the property.
Ensure your estate agent complies with FICA or you may be party to a shady deal
Personal Finance - South Africa
Protect yourself from becoming an unwitting participant in organised crime when you buy or sell property by ensuring that your estate agent is registered with the Estate Agency Affairs Board and by asking for proof that your agent is well versed in the requirements of the Financial Intelligence Centre Act (FICA).
And your estate agent must also be able to confirm to you that his or her agency has rules to ensure that it complies with FICA. The Act is designed to prevent organised crime, terrorism and money laundering.
You may not be breaking any laws by not insisting on this information, but if your estate agent has not met the requirements of FICA and you unwittingly become involved in a shady deal, you could well face severe financial consequences if the deal is subsequently cancelled.
The Financial Intelligence Centre is conducting an awareness campaign aimed at estate agents and casinos, which local and international experience has shown are vulnerable to money launderers.
Murray Michell, the director of the Financial Intelligence Centre, says estate agents must understand their obligations and responsibilities in terms of FICA.
Checked by interest rate rise
BusinessDay - South Africa
Rising interest rates will limit building contractors' ability to push through price increases, states research conducted by Medium-Term Forecasting Associates (MFA).
MFA's research shows that tender price increases peaked in the first quarter of last year at 20,2%, with an average 17,5% rise for 2005. This is in stark contrast to the 5% rise in tender costs in the first quarter of this year.
These findings were confirmed by the Bureau for Economic Research (BER) at Stellenbosch University last week. A BER report on the building and construction sector forecasts that building costs were "likely to rise at more moderate rates in the year ahead".
MFA director Johan Snyman says the change between the two numbers can best be explained as a stabilisation due to comparative base effects, meaning that current levels were being compared with the very high levels of 2005. This year, the rate of construction price increases looks set to come down sharply.
Getting ugly going bust
Financial Mail - South Africa
Market forces are about to punish developers for stupidly densifying city suburbs
Developers who have been rampaging through SA's expensive suburbs, slicing large properties into swathes of cheek-by-jowl cluster homes, are headed for trouble. Stagnant prices, slow sales, and rising interest rates and building costs are about to converge - and, perhaps, put them out of business.
Many developers have entered the arena since 1999 with little understanding of their markets, less concern for aesthetics and no research. They have employed "designers" without architectural degrees and tried to maximise their profits by squeezing as many units onto one piece of land as planning authorities will allow them.
Early success in a time of rampant buyer demand has led many to believe that whatever they build will sell. But slowing sales and a profit squeeze will soon punish them for this assumption.
'Estate agents are breaking the law'