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150 150 Prevance - Bridging Finance South Africa

Subdivision and Rezoning of Your Land / Hoe Verlening van Opsie Waarde Toevoeg

 

‘n Jare-lange vriend, wie op ‘n groot erf in ‘n prestige deel van die Kaap woon, vertel dat hy voortdurend deur ontwikkelaars en agente verpes word om ontwikkelings-regte te bekom vir die eiendom. Die vriend het natuurlik ‘n buitengewone en ietwat onrealistiese prys in gedagte, want hy het gehoor wat ander eienaars al vir hul eiendomme in daardie area gekry het. Hy soek advies.

The interested parties are of course apprehensive about buying the land outright, but they are prepared to conclude some type of an agreement to obtain rights to acquire the land, on the condition that sufficient security is provided, to ensure that they will not be at risk with planning costs but have no real claim to the land when the rights are granted.

Vir die vriend sou so ‘n reëling natuurlik beteken dat die beplannings-potensiaal verwesenlik word sonder dat hy die koste daarvan sal moet dra en ook nie opgeskeep sal wees met die administratiewe uitdagings wat met ‘n hersonering en onderverdeling aansoek gepaard gaan nie.

For landowners that find themselves in a similar situation it would be best to engage a strategy that would be advantageous for both landowner and the prospective developer.  A landowner should be vigilant against so called development agreements where the developer merely tries to gain control over the property with the intention of passing such right on to a third party against payment of an opportunity fee.

Grondeienaars word aangeraai om slegs deur ‘n prokureur te werk indien daar sodanige belangstelling in hul grond is. Dit sal verseker dat die meeste risiko’s grotendeels uitgeskakel word en prokureurs, wat spesialiseer in eiendomsreg, is gewoonlik deeglik bewus van met watter ontwikkelaars ‘n ooreenkoms aangegaan kan word, met wie daar met groot omsigtigheid onderhandel moet word en wie selfs liefs vermy moet word.

One of the better legal structures to employ under such circumstances is an Option Agreement that gives the developer the option (known as a “call option”) to purchase the land (usually at an agreed sum, or at a future market related price, as determined by a third party less certain pre-agreed deductions upon very specific terms) which affords the option holder  the ability to acquire the development right for the property, without the risk that they will be compelled to acquire a parcel of land without the benefit of planning. Entering into an Option Agreement normally also benefits a landowner as it can realise a higher than normal price for their land without having to put forward their own funds in obtaining the rights.

Indien kontantvloei belangrik is vir die grondeienaar, kan hy in die gepaste omstandighede altyd die betaling van ‘n opsie-geld onderhandel. Hierdie opsie-geld sal gewoonlik betaalbaar wees as ‘n vaste bedrag by verlening van die opsie, of teen ‘n onbepaalde bedrag betaalbaar in vaste maandelikse paaiemente, vanaf verlening van die Opsie, totdat die eiendom oorgedra is nadat die Opsie uitgeoefen word.  Wanneer die Opsie uitgeoefen word, word die opsie-geld gewoonlik teen die verkoopprys afgespeel terwyl dit deur die ontwikkelaar verbeur word, indien die Opsie nie uitgeoefen word teen die ooreengekome sperdatum nie.

The developer can apply for planning permission once the option agreement has been signed, knowing that if the planning application is unsuccessful, it will not be obliged to proceed to purchase the plot of land, but that if planning rights are granted and produces a viable scheme, they have the ability to acquire the land on terms already fixed with the land owner.

Indien dit vir die ontwikkelaar belangrik is, sou die partye die opsie-ooreenkoms afdwingbaar kon maak teen derde partye, deur dit by wyse van ‘n notariële kontrak as ‘n verbod op vervreemding teen die titelakte van die eiendom te laat aanteken.  Dit sal natuurlik addisionele koste meebring, insluitende koste vir toestemming daartoe, deur die verbandnemer, maar die gemoedsrus wat dit meebring behoort vir die ontwikkelaar van groot waarde te wees.

Call options are useful to landowners as they can put forward their land for development without having to go through the complexities and costs involved with obtaining planning permission. The added benefit to landowners is that the price payable for the land under the option is usually based on the site being a viable development site, and therefore the owner will benefit from a higher price reflective of the true planning potential.

Kontak enige van ons aktebesorgers indien jy meer in die verband wou verneem of enige ander eiendom verwante vrae het.

Source: VAN ZYL KRUGER INCORPORATED

150 150 Prevance - Bridging Finance South Africa

Does the CPA afford any remedies to the purchaser of immovable property?

 

“I recently purchased a house through an estate agency. Prior to purchasing the house, I did a few viewings with one of their agents, and he assured me that there were no major defects. Transfer has taken place and I have been living in the house for 1 month now and my bathrooms walls are cracking. A plumber has advised that there is a leakage which seems to have been there for a long time. Can I rely specifically on the Consumer Protection Act in any way considering that registration has already taken place? “

The Consumer Protection Act No. 68 of 2008 (CPA) was mainly enacted to promote a fair, accessible and sustainable marketplace for consumer products and services.[1] It applies to every transaction which happens within the Republic of South Africa.[2] If your property transaction happened in South Africa, which it probably did, then the CPA definitely protects you.

An estate agency carries out work related to immovable property in the ordinary course of their business. In most instances they provide a service for the seller. The CPA defines a service as “any work or undertaking performed by one person for the direct or indirect benefit of another.”[3] A supplier is defined as a person who markets goods or services. The agent – who markets the house (thereby rendering a service and marketing goods) then becomes the supplier, and the seller (who is receiving the service) becomes the consumer. Likewise you, as the purchaser, are also a consumer as the goods (in this case the immovable property) were marketed to you. It is clear therefore that the Consumer Protection Act applies in this instance, but only with regards to the relationship between either the agent and the seller, or the agent and yourself. You will not be able to rely on the CPA in any action against the seller, as he most likely would be found not to sell properties in the ordinary course of his business, and would therefore not fall under the CPA definition of a supplier.

The estate agent however also represents the seller and acts as the seller’s agent, creating a fiduciary relationship.  A person is in a fiduciary relationship with another when he or she has rights and powers which he is bound to exercise for the benefit of that other person.[4] [5] This then means that an estate agent will have some liability for a defect such as the one you have in your house because they are the ones supplying you with the service (marketing of the property) on behalf of the seller.

Liability of Sellers in circumstances such as yours, is a question that legal practitioners have interpreted differently. Our view is that a seller is fully responsible and liable for their property, as they are the party who best knows the condition of their property. You have an option, according to the law of contracts, to go back to the contract signed between yourself and the seller, and make sure that there was no mention of defects in the house. If the contract stipulated that any leaking pipes will be repaired by the Seller, he will then be liable to repair the leak(s) and resultant damage, or to compensate you for any costs that you incurred for such repairs. If the Seller knew that there was a leaking pipe, or could reasonably have been expected to know about the leak, and wilfully withheld this information from you or tried to hide it, the leak will be considered a latent defect and the Seller will also be liable. Your claim will however not be in terms of the Consumer Protection Act, for reasons stated earlier, ie the seller is not a supplier.

 The estate agent has a responsibility, under the CPA, to sell goods or to promote the sale of goods and to honestly present the goods that are being sold. If an estate agent neglects to inform you that there is a defect in the house that they sold and marketed to you, then the agency has failed to discharge their duty and have in fact falsely represented the house to you. You can hold the estate agent liable under the CPA as they are the suppliers of the service and goods that they have marketed to you.

Of course an estate agency will not be liable for the repair of the house because the previous owner is liable for such defects, especially if they were aware of them. However, estate agents must be careful of negligent conduct and filling out property condition reports on behalf of sellers without making 100% sure of the actual condition of the property, as they can incur liability.  False representation of goods goes against the purpose which the CPA was enacted for. Apart from having to forfeit their commission income, estate agents may face long-term consequences like losing credibility and having their licence revoked because of bad conduct.

Another remedy for the purchaser would be to hold the seller vicariously liable for the misrepresentation. This means that the seller would be liable for the agent’s negligence in assessing the property and carrying out their duty.

The best option, though, is to hold the seller liable for the defects that he should have reasonably known about and communicated to the agent. It would also be reasonable for the agent to lose some – or all – of their commission for not carrying out their work and providing the service as they should have.

Source: Tonkin Clacey Inc.

150 150 Prevance - Bridging Finance South Africa

Beware of Property Cyber Scammers

“Forewarned is Forearmed!” (Wise old saying)

Why yet another warning about cyber-scams in the property industry? It’s because the hard fact is that the criminals are winning this war. In fact we are now reportedly the “second most targeted country in the world with regard to cyber-attacks” (Law Society of South Africa).

Hence, no doubt, the Legal Practitioners Indemnity Insurance Fund report of “over 110 cybercrime related claims with a total value of R70m” in the period July 2016 to August 2018.

The scammers are using more and more sophisticated techniques to lull their victims into complacency, and your best protection is your own vigilance – forewarned is definitely forearmed!

And remember that property transactions will always remain a firm favourite with online fraudsters for two simple reasons –

  • Property sales usually involve large amounts of money.
  • Electronic communication between attorneys and clients is a fertile ground for interception and deception.

How your money gets taken – 2 main scenarios

Cyber criminals are resourceful, creative and constantly updating their methods so this is by no means an exhaustive list of your risk areas. To date however the two main categories of scam remain –

  1. Your attorney’s payments to you: As a seller, when you give the transfer instruction to your attorney you will nominate a bank account – account A in this example – to receive the sale proceeds. Before transfer however (often at the very last minute) the conveyancing firm receives a genuine-looking email “from you” changing your banking details to “my new account, account B”. Your emails to and from your attorney have been intercepted, and your details cleverly spoofed. Your money is gone – forever. Of course if you chose the right attorney to attend to your transfer in the first place this shouldn’t happen to you – but, as we shall see below, the scammers are so sophisticated now that you can never ever let your guard down, no matter how trustworthy the firm.

  2. Your payments to the attorney: The main risk here is to the buyer paying the whole or a large portion of the purchase price to the transferring attorney. Of course transfer duty and other costs of transfer can also add up to a tidy sum, whilst as a seller you will be paying for things like bond cancellation costs, rates, agent’s commission and so on.

    The scam here is that once again emails are intercepted, and this time you receive an authentic-looking but entirely fraudulent email asking you to pay into “account C”. The email appears to come from the conveyancing firm but of course it is again a clever (often very sophisticated) impersonation, this time of the firm’s branding, details and email address.

    The false account details might be in the email itself or in a falsified attachment – nothing is safe. The email may be in the form of a “we’ve changed our banking details” notification, or the criminal may work on the basis that you just won’t notice the change. And of course account C isn’t the conveyancer’s trust account at all, and the minute you make a payment into it your money is – once again – gone forever.

Who can you recover your loss from?

By the time you realise you have been duped, the criminals are long gone and your chances of catching up with them are remote to say the least.

So could the attorney possibly be liable? A recent High Court judgment deals with that very issue…

Court: Attorney negligent, must pay

In this case a transferring attorney was ordered to pay her client damages of almost R1m for negligence.

In a nutshell, the attorney had attended to a property transfer for the sellers, and a scammer intercepted emails between the sellers and the attorney’s secretary. This was a classic “Scenario 1” operation, and seemingly a sophisticated one – the scammer persuaded the secretary to accept an emailed “my bank account details have changed” instruction and to pay the proceeds into the scammer’s account.

The sellers sued the attorney for damages, the attorney denied any negligence whatsoever, but the Court found that she had indeed failed to carry out her mandate with the “due care, skill and diligence expected of a reasonable attorney and a conveyancer in the circumstances.”

What is important for you is that the Court reached this conclusion on the particular facts of this matter. There were specific factors present here such that a “diligent, reasonable attorney” would, said the Court, have taken steps to verify the information in the fraudulent emails.

That suggests that there are many possible sets of facts which would have left the seller unable to prove any failure of duty by the attorney. Your risk is that if you try to hold the attorney liable you will have to prove that your loss resulted from his/her fault and not from yours – that’s never going to be easy and if you fail, you are left high and dry.

Protect yourself. Be vigilant!

So prevention really is much better than cure here. Litigation will be expensive and risky, and even if you succeed in your damages claim the attorney’s normal indemnity insurance excludes these types of claims so your victory could be a hollow one.

Fortunately there are several common sense steps you can take to minimise your risk –

  • If you have the choice of transferring attorney (which you normally would have if you are the seller), choose an attorney you trust to do the job properly, carefully and professionally.
  • Having said that, no matter how much security your attorneys have put in place on their side, if it is your system that is vulnerable that is what the criminals will exploit. So keep all your anti-virus, anti-malware and other security software updated, learn all about protecting yourself from malware/spyware/phishing attacks, and generally treat all electronic communications with caution – even those appearing to come from a trusted source like your attorney.
  • Read “Is That Sender For Real? Three Ways to Verify the Identity of An Email” on FRSecure’s blog. All the tips given there are important, but at the very least use the methods given to find out where the email really comes from. Then check back to see that it matches in every detail the email address you were given at the start of the transfer process.
  • Be suspicious if anything in an email just feels “not-quite-right” – perhaps only a cell phone number is given, or a free generic email address (like Gmail) is used, or the wording is somehow “off”. If the email makes you even the slightest bit uneasy, err on the side of caution and investigate further.
  • Most importantly, never accept notification of any supposed change in your attorney’s banking details without visiting or phoning your attorney to check all is in order (don’t of course use the contact details given in the suspicious email, they could also have been doctored!). 

Source: Tanners &  LawDotNews

150 150 Prevance - Bridging Finance South Africa

Prevance introduces Evance Online – a revolutionary deal management platform

 

As the old saying goes “time is money.” In today’s fast-paced business environment, improving efficiency can go a long way to making your life easier. As leaders in the industry, we are always on the lookout for innovative solutions that improve the lives of our customers.

We are pleased to introduce our new, online deal management platform – Evance Online.

Evance Online provides a powerful dashboard enabling customers to instantly submit deals, offering unprecedented speed and accuracy.

Prevance strives to be at the forefront of new technology with modern day online applications and processes, while at the same time being environmentally conscious.

Worldwide consumption of paper has increased 400% in the past 40 years and the paper industry is the fifth largest consumer of energy in the world. Environmentally conscious companies are looking for cost effective, impactful ways to help reduce their carbon footprint.

With Evance Online, the need to physically print out documents is dramatically reduced. Going paperless clearly helps to save the environment, not only by reducing the number of trees that are cut down, but also by reducing pollution and saving water. The benefit for companies is a more efficient system and cost savings.

Not only is the system paperless, but it is speedy and efficient. Deals can be submitted online in a few minutes, agreements are automatically captured and signed electronically, and active deals are monitored online. You can also keep track of all your correspondence in one place.

In addition, there is an online quote calculator and settlement figures are generated online. An algorithm is used for credit analysis, providing you with credit information in a matter of minutes.

Selling a property can be a stressful time. While your home may be officially sold, there can be a long delay until you finally receive the proceeds from the sale. Your cash flow may be tight while you wait for the proceeds to come through and you need to pay the deposit on your next property purchase.

With Sellers Advance, you can have access to your funds as soon as your home has been sold. This means that once the purchase price has been secured by your buyer, Prevance may be able to offer you up to 75% of your total nett proceeds (after deducting the bond amount and all costs associated with the sale). Applying for a Sellers Advance is quick and easy through Evance Online, enabling you to receive a cash injection when you need it most.

Ask your conveyancing attorney to submit an application online for advance funding on the sale of your property. It’s quick and easy.

Conveyancers can benefit greatly with increased efficiency and less paperwork with simplified application procedures, using Evance Online. Give Prevance a call on 0860 987 987 or email them on info@prevance.co.za to have one of their skilled consultants provide a demonstration of Evance
Online.

150 150 Prevance - Bridging Finance South Africa

Property Transfers and Trust Account Theft: A R720,000 Warning

Property Transfers and Trust Account Theft: A R720,000 Warning

“The issue of whether a conveyancing attorney receives the money as the agent of the seller, or of the purchaser, or of both, or as trustee for both to await the event, is a somewhat vexed question … and each case must be considered in the light of its own facts and the particular contractual terms under which the conveyancer received payment” (Extract from judgment below)

A lot of money changes hands in property sales, and for many of us buying or selling a house is the largest single financial transaction of our lives.

A recent High Court judgment involving a theft of R720,000 by a dishonest conveyancer (transferring attorney) provides a timely warning to both buyers and sellers to proceed with extreme caution. And as always, the core message to both is this: Sign nothing without your lawyer’s advice!

The conveyancer who stole from her trust account
A seller sold a sectional title unit to a buyer for R720,000. The sale agreement provided for payment in full by the buyer to the conveyancer, the funds to be held in trust in an interest-bearing account until transfer, interest to accrue for the buyer’s benefit.

The conveyancer had, as is usual unless otherwise negotiated, been nominated by the seller. In this case the buyer asked to use her own attorneys but the seller “vehemently” insisted on nominating his attorney.

On request from the conveyancer, the buyer paid the R720,000 (plus R16,700 towards the transfer costs payable by her) into the conveyancer’s trust account.

When later it became clear that the conveyancer had stolen these funds, the buyer demanded transfer from the seller. The seller refused – the money was gone and he wasn’t prepared to lose both his property and the purchase price.

At the same time however he (the seller) lodged a claim with the Legal Practitioners Fidelity Fund, which was at that time still called the Attorneys Fidelity Fund and is referred to below as “the Fund”. In the event of such a theft, the Fund will in its own words “assist you with the reimbursement of your monies if your claim is valid.”

However, the Fund refused to pay the seller’s claim because of its view that the loss was sustained by the buyer, not by the seller.

The buyer disagreed. It wasn’t, she said, her loss, it was the seller’s. She wasn’t going to now pay the purchase price over again and then have to claim from the Fund. So she asked the High Court to order the seller to pass transfer to her.

What the Court had to decide is whether or not the conveyancer was the seller’s agent to receive payment of the purchase price from the buyer. If so, the buyer had paid and was entitled to transfer. If not, the buyer had not paid and had no right to transfer.

The danger for both seller and buyer here is that as the Court put it “the issue of whether a conveyancing attorney receives the money as the agent of the seller, or of the purchaser, or of both, or as trustee for both to await the event, is a somewhat vexed question … and each case must be considered in the light of its own facts and the particular contractual terms under which the conveyancer received payment.”

So whose agent was the conveyancer?

In the end the Court ordered the seller to pass transfer to the buyer, finding on the facts and on the Court’s interpretation of this particular payment clause that –
The conveyancer in this matter had acted as agent for both the buyer and the seller – as agent for the buyer in investing the funds pending transfer, but as agent for the seller in receiving payment of the purchase price.

Accordingly the buyer “complied with her obligation in terms of the deed of sale by making payment of the purchase price to the [conveyancer] who was nominated by the [seller] to receive payment of the purchase price on the latter’s behalf”.

“In addition, the Deed of Sale provided for the mode of actual payment of the purchase price and once this was done, the [buyer] had discharged her obligations. She did what was required contractually in respect of the purchase price and had no control of the process thereafter.”
The seller is therefore down R720,000 plus costs, and will be hoping that the Fund will now pay out his claim without further ado.

Sellers

Choose a competent and trustworthy conveyancer. Don’t ever be railroaded by anyone into appointing someone else! And if your attorney isn’t also an admitted conveyancer, ask him/her for a referral to a trusted colleague who is.

Buyers

As we saw above, the wording of the sale agreement is central to the level of risk you run – it should be clear that in paying the purchase price to the conveyancer you are paying the seller in complete discharge of your obligations under the sale agreement.

Bottom line – as always, ask your attorney for advice and assistance before you sign anything!

Source: ©DotNews. This article first appeared in LawDotNews and is republished with authority from Gerings Attorneys Notaries and Conveyancers (email nita@gerings.co.za), and from LawDotNews

150 150 Prevance - Bridging Finance South Africa

You Signed a Property Sale Agreement, Can You Still Accept a Better Offer?

You Signed a Property Sale Agreement, Can You Still Accept a Better Offer?

You put your property on the market and an acceptable but not-perfect offer comes in. On the “a bird in the hand is worth two in the bush” principle you want to accept the offer even though it’s not ideal.

Perhaps it’s not perfect because it’s subject to a suspensive condition – common ones give the buyer time to sell his/her current house or to obtain a bond. In both scenarios your sale will fall through if the buyer is unsuccessful within the stated time, and if that happens you are back to square one after a long and fruitless delay. Bear in mind that that delay could be a protracted one depending on what your sale agreement actually provides – normally no less than 30 days to get a bond, sometimes several months to sell an existing house. That’s a lot of very valuable marketing time lost – and you’ll never know for sure whether you just missed out on that “perfect offer”.

The “72-hour clause” and what it does

This is where the “72-hour”, “continued marketing” or “escape” clause comes in handy.

In a nutshell, it allows you to continue marketing your property until suspensive conditions are met. If your marketing pays off and an unconditional offer does come in, you can give your existing buyer 72 hours’ notice to match it. So the buyer would have an opportunity to make the sale unconditional – either by waiving (abandoning) the condition or by fulfilling it.

If the buyer fails to do whatever the clause requires within the 72 hours, you are clear to accept the new offer. If on the other hand the buyer does perform in time, the existing sale immediately becomes fully binding and the transfer process can get underway.

A note for buyers

The clause is usually there for the seller’s benefit so perhaps avoid it when you can. But if it’s a choice between your offer being accepted or not, bear in mind that having a signed sale agreement at least gives you a solid base for a full bond application and/or a concerted effort to finalise your own house sale.

Just be ready to react quickly if the seller does indeed give you the 72 hour notice – you don’t want to be rushing around in a last-minute panic.

Buyers and sellers – check the wording!

Although 72-hour clauses are common in standard sale agreements, the exact wording can vary substantially, and may need tailoring to meet your specific needs. You might for example want to be given proof of availability of funds together with a bond clause waiver, or proof that the sale of the buyer’s house is a viable one – every situation will be different.

Apart from everything else, make sure that –

The 72 hour period specifically excludes Saturdays, Sundays and Public Holidays (religious holidays too if important to you),
You can extend the 72 hours by mutual agreement if you want to,
There are clear requirements for the method and timing of giving notice and of waiving conditions, and
You aren’t binding yourself to anything else that could turn around and bite you down the line.
Delete the clause if it doesn’t apply.

As always, have your lawyer check it all for you before you sign anything!

Source: ©DotNews. This article first appeared in LawDotNews and is republished with authority from Tanners & Associates Attorneys Notaries and Conveyancers, and from LawDotNews

150 150 Prevance - Bridging Finance South Africa

Sub-divide and ruled / Duet housing

Most people interested in properties and specifically property developments are probably aware that the City of Cape Town (and certainly other local authorities) nowadays allow a second residence to be built on a single residential zoned property and may be inhabited.

Up and until 1 July 2016, such owner would either have to apply to the City for a consent use or to have the property rezoned to a category which permits of a second dwelling. These applications would not necessarily have succeeded and were rather time consuming and expensive.

However, since the aforementioned date, each owner now automatically has the right to build a second home on his property as part of the government’s efforts topromote urban densification . The City of Cape Town recently announced that they are in the process of putting the processes in place to allow up to three homes to be developed on each residential estate.

Although the right to construct a second (and perhaps even a third house) on a residential erf is now automatically the following challenges should be kept in mind:

  • First, there is a possibility that the title deed of the property in question may contain a condition prohibiting the erection of further dwellings on the property. Such a condition is legally stronger than the new automatic right and a process would have to be followed to abandon the condition of your title deed.

Having to follow such procedure would not only be long winded but is also expensive as the removal of restrictive conditions did not mean the simplest process and the owner will be advised to seek the assistance of a conveyancer or a registered town planner to undertake that process. Should the local authority not support the application the owner may even have to approach the High Court.

  • Next, the owner must also be aware that when the second dwelling is completed, it may not be sold or sold as a separate dwelling unit, since both buildings are kept under one title.

There are two ways to overcome this particular problem;

  • To subdivide the Erf and so create two, or more separate inheritances, each with its own number and title, whereupon the owner will be free to sell and transfer ownership of any of those. The problem with this is that there is no automatic right to subdivide your Erf. You will have to apply to local authority for permission to do so and this process is also lengthy and expensive. You will, for example, have to install services (water supply; sewers electrical supply). If the title is subdivision to your property prohibits, then and mentioned in item 1 above, you will be obliged to also apply for the removal of that condition thereby adding further time and expense to the process.

The applicant will also have to pay bulk service charges for the newly created erf and provide a separate service connection to the city’s services network.

These costs are prohibitively expensive and are not really viable.

  • The second option would be to convert ownership of the property to sectional title ownership. No consent from government roads is required for this, and conditions are rarely imposed in title deeds that prohibit such conversion. With such a conversion, the challenges associated with a physical subdivision are mostly addressed. The process is not only relatively quick but also not very expensive. The conversion to sectional title can either be undertaken if the construction of the second home is completed, or already before any construction has begun. In the latter case, a “right of extension” is simply created that can be sold and transferred. The latter involves the process of creating the right to build the second home, with properly detailed building plans submitted by the proposed home at the deeds office, ensuring that the new home will look no different than the building plan. By using exclusive areas of use, each owner’s rights to exclusive use of portions of the yard are protected for the garden or swimming pool.

If Sectional Title is to be preferred the Sectional Titles Act will have to be compiled with which means that a Body Corporate will need to be established in terms of the Sectional Titles Schemes Management Act and the registration of such scheme with the office of the Ombud for Community Housing Schemes.

Source:  https://www.dotnews.co.za/Code/online.aspx?qry=ZSpQuU5At1JrluIQsNfWTc2Jhw3dco00qmDitmB91yTeBeINshqJIYHhfiwQDekgVL2bNz0kgf9n+zA2uHceFtkJHbDmmJ1XzcW2KIgSk41vZlNHp1b/Ug1+GF1SRaWMeOR2ZR2F5ZAtRE39ZMEUrVPNYHhqL5fL0aUueNfkMP51pcs8zhHREsaB0cs/Ix1KtC29Lxp7gPKGG/Ikclm8EawzaytanhzeL5cDkuVT9YA=

Read more: http://vzk.co.za/

150 150 Prevance - Bridging Finance South Africa

What to look out for before buying a property

You’ve searched far and wide for the perfect home for you and your family, and you’ve finally found it, or so you thought. Buying a home, especially for the first time, is as overwhelming as it is exciting.

You’ve viewed your dream home, but remember, you receive so much information during your viewing, that you could easily become overwhelmed and miss important details. Especially if you have fallen in love with your potential new home. It is important to remember that there are various “red flags” that you need to look out for before purchasing, as missing these “red flags” could have significant financial repercussions. Before signing, make sure to look out for the following:

  1. Foundation and structural faults

What do you think is the most important part of a house? The double garage? The interior? How well-lit the rooms are? No. The most important part of the house, and arguably the costliest to repair, is the foundation of the house. Make sure to look out for large cracks in the walls, as this could be a sign of some serious structural problems with the foundation. Make sure to thoroughly investigate the door frames; if door frames don’t appear to be square or if the doors have difficulty closing, it could be a sign of structural problems.

  1. Poor drainage/grading

In most cases, water problems in a house are directly related to poor drainage or grading. However, it is often difficult to detect if a house has poor drainage or grading. An obvious sign of the above-mentioned faults is pools of water or a bouncy bathroom floor which could indicate that there is a leaking shower drain. Make sure to also look out for overflowing gutters, water stains and cracks in the foundation.

  1. Patches of fresh paint

A coat of fresh paint is an excellent and quick way to spruce up your home, but if there are random patches of fresh paint around the house, it could be cause for concern. Why? Because it is possible that the seller is trying to hide something beneath the coat of paint.

  1. Faulty electrical wiring

If you are looking to buy an older home, make sure that the electrical wiring is not faulty, as house fires caused by faulty wiring is not as uncommon as we would hope. This is especially the case in older homes, as these homes don’t always have an ample supply of power and the number of electrical outlets like newer homes have. Also look out for any exposed wires, as this could cause significant harm to either the home or your family.

  1. Neighbourhood condition

When looking for your perfect home, always remember that you are not only investing in the property itself, but also in the neighbourhood. Make sure to ask enough questions about the neighbourhood. For example, if you move into a neighbourhood that is deteriorating or crime-ridden, it could have a significant impact on your return on investment.

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)

Source: https://madeleyn.co.za/2019/04/26/what-to-look-out-for-before-buying-a-property/

150 150 Prevance - Bridging Finance South Africa

Predicted change is here

Herschel Jawitz, CEO of Jawitz Properties, Chris Renecle, MD of Renprop and Dr. Andrew Golding, chief executive of the Pam Golding Property group, do all agree that the residential market is in for an interesting time in 2019 in South Africa.

Even though the majority in the country feel that things will continue to decline the enlightened among us states that all predictions for the year are positive. They believe that home buyers and investors who take the plunge and buy early will be well-rewarded. Buyers and investors should not allow the current unsettled state of the global and local economies to cloud their vision of long-term gains, states Berry Everitt, CEO of the Chas Everitt International property group in his article in BizCommunity.

This is, of course, terrific news for developers.

There is renewed confidence in buying property, especially in the major metros. Prospective buyers are moving closer to schools and parents change jobs to be closer to their homes. Gone are the sluggish real estate market of 2018. 2019 proves to be energised as the market and banks are more lenient towards the buyer.

2019 is the year for changes in the real estate market. Buyers and sellers, tenants and landlords can transact easily. Technology is being harnessed to allow a positive response to long-held client frustrations and traditional ways of business are being challenged. If we do not think differently, we will be left behind in this ever-changing world which is good news for end-consumers.

“Property transactions are going to be managed more efficiently and with greater transparency. They will be easier and less expensive. I don’t believe that systems and technology will replace real estate professionals; the circumstances around property transactions are too diverse, convoluted and unpredictable. I do believe that we have an opportunity to augment the skills of our real estate professionals using technologies, thereby delivering a far better level of service to our clients. This prospect is what I most look forward to in 2019.” Says Paul Stevens, CEO of Just Property Group Holding (Pty)

“If a buyer gains the post-election jump in the value of their property now, they will enjoy the benefits of smaller monthly bond repayment. This means that they stand to derive the maximum possible advantage out of the strong market recovery that they foresee taking place over the next four years.” Berry Everitt, CEO of the Chas Everitt International property group states

Although we are being subjected to increasingly loud and distracting political in-fighting ahead of the General Election in May, it is not surprising that many prospective buyers and investors are deciding to ‘wait and see’ how things turn out before making any further commitments to the market.” Berry Everitt concludes.

“One thing is for sure, now is not the time to delay residential property developments or put things on hold because of a shortage of cash,” says Prevance marketing manager, Christo Jonker. “We understand the day to day challenges which developers face. Often the biggest frustration for property developers is to obtain the final approval certificates or regulations from government council departments which is of the essence to be able to transfer to end- user buyers and this extends to cash flow issues. As the adage says, the best-laid plans of mice and men often go awry, and for this reason, its important to have a solid backup system in place because money worries should be the last thing on any developer’s mind.”

Jonker adds, “Our products have been developed through our vast experience in this important sector and we are immensely proud of the services we offer. Our team understands that speed is of the essence when dealing with short term finance solutions and our products have been specifically designed to not only allow developers access to cash in the shortest possible time but also to offer an array of options tailor-made for developers’ needs.”

In order to qualify for Prevance’s short term property finance the developer should:

  • Provide security in the form of a first mortgage bond of a property’s worth ± twice the
    value of the loan required, which need not to be the land being developed;
  • Should have invested his own funds into the development;
  • Demonstrate the viability of the project;
  • Should have a proven track record; and
  • Have obtained all relevant zoning regulations/certificates obtained.

As Prevance prides itself in giving a quick answer to all applications and makes the funds available soon after approval, the solution provided by Prevance is specifically for a short- term requirement and should be repaid within a few months. This limits the interest cost.

Those who meet the criteria could qualify for as much as R7-million per phase of development.

“The beauty of applying for short term property finance through Prevance is that each application is assessed on its own merit by our highly experienced team. There are no finance raising fees – in fact, there are no hidden costs whatsoever. Our wide range of services includes providing end-user finance via our in house mortgage originator, Prevance Bonds as well as assistance with banks’ pre-valuations” says Jonker.

“Assistance in obtaining zoning rights and other regulation certificates can be provided by the added value service of our professionals with whom Prevance has a relationship and whose credibility is valued. This extends to assistance with a feasibility study of the entire project.” Jonker explains.

“We have a proven track record in the short-term property finance field and our products have helped numerous small to medium developers across the country to overcome cash flow issues. Part of the reason for this is that we don’t micromanage the project as long as the funds are utilised by developers to kick-start, continue or complete a project.”

“We, like the rest of the country, are excited about the changes in South Africa and are looking forward to a more vibrant economy that will be aided by an increase in development projects.” Christo Jonker, sales and marketing manager, Prevance.

To meet the people at Prevance, watch the Videoclip https://youtu.be/MJBDkEhXIfo or take a moment to visit our website: www.prevance.co.za for all the required information you will need to access the Prevance solution best suited to each developer. Dont forget to visit our Facebook page at https://www.facebook.com/PrevanceCapital for interesting and informative snippets we share on a regular basis.
For more information call us at 0860987987

 

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    150 150 Prevance - Bridging Finance South Africa

    Residential market in for an interesting time

    Berry Everitt, CEO, Chas Everitt International property group

    South Africa’s residential market is in for an interesting time in 2019, but our predictions for the year are all positive, and we believe that home buyers and investors who take the plunge and buy early will be well-rewarded. Buyers and investors should not allow the current unsettled state of the global and local economies to cloud their vision of long-term gains.

    With the US/ China trade war and the ongoing Brexit saga dominating the news, many investors around the world are just sitting on the sidelines at the moment and waiting to see how things turn out. But SA is actually benefiting from the current situation, with the weaker pound and dollar being good for the rand, and oil prices at very low levels. This helps to contain inflation, lowers the likelihood of another interest rate hike at the start of the year, and is a positive for economic growth and job creation.

    Increase in the demand for rental homes

    It is also expected to give a further boost to local home demand and sales, but as things are, the banks are keen to lend to home buyers, household debt is at a 10-year low and recent statistics from Lightstone and BetterBond show that SA is already quietly gaining about 77,000 new home owners a year. Urbanisation is also happening at a very rapid rate, and developers are anticipating a concomitant increase in the demand for rental homes by planning more than R40bn of new private sector housing over the next two years, most of which is sectional title flats and townhouses (StatsSA).

    Taking a broader view, the softer stance that the US Federal Reserve is now taking on interest rates is also good news for SA as it means that international investors may be more willing to invest here without the Reserve Bank raising rates. And the proof of SA’s attractiveness as an emerging market is in the fact that it has taken President Ramaphosa and his team just six months to reach the halfway mark on what was supposed to be a five-year quest to attract $100bn worth of foreign and corporate investment.

    Job creation

    Perhaps even more importantly, the president has also secured pledges from business and labour to help create at least 275,000 new jobs a year for the next five years, and already set in motion all sorts of programmes to repair infrastructure, restore municipalities and basic services, make education accessible and relevant, and address major deficiencies in healthcare.

    We also have a finance minister now who is firmly committed to containing government spending and bringing down the national deficit, so although it is probably going to be a long road back to prosperity for SA, there is a growing confidence that we are definitely going in the right direction, even among the ratings agencies like Moody’s and S&P.

    However, much of this positive outlook is currently being blurred by other problems that are also the legacy of state capture, including bankrupt or nearly-bankrupt state-owned enterprises like the SABC, SAA and Eskom, low GDP growth, high unemployment, crime and corruption.

    Expensive ‘wait and see’ approach

    Millions of SA consumers are also taking financial strain because of the VAT increase in April, the very high fuel prices in 2018 and the ever-rising cost of electricity and other utilities. And now we are being subjected to increasingly loud and distracting political in-fighting ahead of the General Election in May, so it is not really surprising that many prospective buyers and investors are deciding to ‘wait and see’ how things turn out before making any further commitments to the market.

    But this could end up being an expensive decision. Barring disaster, we are anticipating a surge in prices following the election, which will mean that buyers have to earn more to afford the homes they want, take out bigger bonds and pay higher monthly instalments. In addition, they will have missed out on the substantial value growth that they would have gained by buying now, while prices are still relatively suppressed.

    Those who do buy now, on the other hand, will gain that post-election jump in the value of their property, and enjoy the benefits of a smaller monthly bond repayment. In short, they stand to derive the maximum possible advantage out of the strong market recovery that we foresee taking place over the next four years.

    Source: Biznews and Chas Everitt

    Head Office : 011-274-1700