Monthly Archives :

January 2017

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Bridging Finance for Estate Agents

Bridging finance gives agents peace of mind and helps them focus on what’s really important – selling.

Money worries plague most of us at some point and unfortunately this can affect our performance levels. While this may not be much of an issue for those who enjoy full time, paid employment, it can be catastrophic for those who work on a commission basis.

Estate agents are in a worse position than most as although they do all the running around and all the hard work behind the scenes in order to get a property sold, more often than not, they have to wait months for the commission to be paid out. And therein lies the problem…cash flow.

We all have monthly obligations which need to be met and stressing about finances undermines our performance and production levels. This, in turn, causes more stress and so the cycle continues.

Fortunately there are ways to overcome this in the form of bridging finance. Essentially, bridging finance will advance a portion of the commission earned before the transaction has been finalised, allowing the agent to continue to focus on the most important aspect of his job – making more money.

Prevance Property Bridging Finance understands estate agents’ requirements and as such has designed a package specifically aimed at servicing their financial needs.

“We pride ourselves on offering a seamless, hassle-free online service that gives an agent access to 75% of their commission within 24 hours of approval,” says Christo Jonker –Marketing Manager for Prevance Capital Pty Ltd.

“Our track record in the industry speaks for itself and we are immensely proud of the way our company has paved the way for those who are passionate about their real estate careers.”

For further information go to: or log on to the Prevance FaceBook page:!/PrevanceCapital?fref=ts

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Sectional Title Levy Increases You Can Expect

4661c401-3eb2-4001-a88d-5205883fc609“My body corporate has warned that due to recent changes in the sectional title legislation we should be expecting higher than normal levy increases. I live on a tight budget and this news has me very worried. Is it true that my levies will increase or is the body corporate just making this up?”

New legislation affecting the sectional title environment came into effect recently, namely the Sectional Titles Schemes Management Act 8 of 2011 (“STSMA”) and the Community Schemes Ombud Service Act 9 of 2011 (“CSOSA”), with both pieces of legislation potentially having an impact on sectional title levies.

The STSMA requires a body corporate to establish and maintain two funds, namely 1.) an administrative fund,  and 2.) a reserve fund.

The administrative fund must be used to fund the estimated annual operating expenses of the body corporate for the particular financial year. Such expenses will include maintenance, repair, management and administration of the common property, and rates, taxes and other municipal charges and insurance premiums relating to the sectional buildings or land. The reserve fund in turn must primarily be used to cover the (unexpected) costs of future maintenance and repairs of the common property.

The STSMA regulations prescribe specific formulas that a body corporate must use to determine the minimum contribution to the reserve fund. There are three categories:

Category 1 – If the amount of money in the reserve fund, at the end of the previous financial year, is less than 25% of the total contributions to the administrative fund for that previous financial year, the contribution to the reserve fund must be at least 15% of the total budgeted contribution to the administrative fund.

Category 2 – If the amount of money in the reserve fund, at the end of the previous financial year, is equal to, or greater than, 100% of the total contributions to the administrative fund for that previous financial year, then there is no minimum contribution to the reserve fund. There is thus enough “reserves” for future maintenance.

Category 3 – This is when the amount of money in the reserve fund, at the end of the previous financial year, is more than 25%, but less than 100% of the total contributions to the administrative fund for the previous financial year. The budgeted contribution to the reserve fund must then be at least the amount budgeted to be spent from the administrative fund, on repairs and maintenance to the common property, in the financial year being budgeted for.

If your Sectional Title Scheme does not have any reserve fund in place, you fall under category 1 and your levies are likely to increase in order for the body corporate to implement the practice of a reserve fund.

In general, there is no limit to what the levies can be increased to, but the management rules do determine that the body corporate may, on the authority of a written trustee resolution, increase the contributions due by the members by a maximum of 10% at the end of a financial year to take account of the anticipated increased liabilities of the body corporate.

The second piece of legislation – CSOSA – is intended to establish the Community Schemes Ombud Service (“the Ombud Service”) and to provide for a dispute resolution mechanism to resolve disputes in community schemes (sectional title schemes, home owners associations, housing schemes for retired persons, etc) and to ensure their good governance.

Every community scheme must in each calendar year, on a quarterly basis pay to the Ombud Service a compulsory levy, subject to discounts or waivers as may be prescribed. The compulsory contribution is calculated according to the following formula:

The lesser of R40, or 2% of the amount by which the monthly levy charged by the Scheme exceeds R500 i.e. (your levy minus R500) x 2% up to a maximum of R40.

Based on the above pieces of legislation now in place, there is a realistic chance that your levies may increase in order to allow your sectional title scheme to start recovering contributions from you and the other units, in order to pay the levy to the Ombud Service and establish a reserve fund for the scheme. How much your levies may increase, will differ from one scheme to the next. But nonetheless, prepare yourself for the possibility of a higher than usual levy increase this year.


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What Should a Conveyancer do?

4661c401-3eb2-4001-a88d-5205883fc609Conveyancing (or conveyance) is the legal term for the process whereby a person, company, close corporation or trust becomes the registered and legal owner of immovable property and ensures that this ownership cannot be challenged. It also covers the process of the registration of mortgages.

Conveyancing in South Africa can only be carried out by a licensed conveyancer, i.e. a lawyer who has passed the National Conveyancing Examination.

After an agreement of sale has been made, a conveyancer is appointed (normally by the seller, although the buyer will pay the fees) and instructions are sent to him by the estate agent. These include the names of both the buyer and the seller, a copy of the agreement of sale, and the passport numbers and marital status of the buyer and seller.

The conveyancer should:

  1. protect the interest of his client, the Seller, at all times and these interests should outweigh all other considerations except of course issues of legality;
  1. inform the seller of the conveyancing procedure and keep the seller informed of the progress of the transaction;
  1. advise the seller on the content of the Offer to Purchase, especially regarding suspensive conditions;
  1. advise the seller on the cancellation of his bond, any penalties, notice periods and other administrative charges which may affect the settlement figure;
  1. obtain the seller’s instruction before issuing any guarantees in respect of the transaction;
  1. do everything in his power to register the transaction on or as close as possible to the date agreed to in the offer to purchase;
  1. advise the seller on his obligations in terms of the offer to purchase, so as to ensure that the transfer is not delayed;
  1. meet with the seller to explain, as well as sign the necessary documentation in order to conclude the transaction;
  1. prepare the deeds for lodgement with care, so as to minimise the risk of rejection of the documentation by the Deeds Office;
  1. inform the seller of the transfer on the day of registration;

The process of selling and transferring your valued property can have many pitfalls if the correct advice is not received. This is why it is imperative to be cautious and maintain a serious regard for your own interests when choosing the right attorney to take responsibility for the transfer of ownership.

When looking for a conveyancer one must examine the following pre-requisites:

  1. Is the conveyancer known?
  1. Is the conveyancing firm well established?
  1. Does the conveyancer have experience? Is the firm of appointed attorneys outsourcing the transaction to a conveyancing firm unknown to the seller? Not all firms have conveyancers.
  1. Does the conveyancer have experience in what you require to be done?

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Taken from: Pagdens

Head Office : 011-274-1700