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Property 24/10 - 133

8 November 2012

Scoring commercial property finance
Although there is a general interest throughout South Africa in investing in commercial property, a high proportion of those wanting to do this are deterred from doing so because they cannot get bank finance, says Jason Lee, national head of Rawson Commercial. Lee explains that they come across cases where a potential investor has gone about things the wrong way. 

Having decided to invest in commercial property, he has travelled around until he has found a property which he regards as suitable. 

He then makes an offer, subject to getting a bond for which, usually 20 to 30 days are allowed. 

During that time he rushes desperately from bank to bank, but all too often fails to get their backing – and then has to opt out of the deal.

What many such potential investors do not realise is that there are alternative ways of financing a commercial property and, these have proved effective throughout most of the developed world.
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Can agent withhold my rental deposit?
A Property24 reader asks:
I vacated property on the 30th of September that I rented for a year. On that day the letting agent came to the property and collected the keys walking through the unit. The new tenants moved in the same afternoon. No outgoing inspection was done besides that. When I initially moved in I took it upon myself to complete a list of defects and emailed it to them. 

After enquiring about my deposit I received an email on the 11th of October stating that they have deducted R500 for cleaning of the unit and an additional R400 for repairing of a garage lock. I know the garage lock was in working order as I used it daily and the unit was cleaned before I handed over the keys. The agency are also keeping R1 500 of the deposit for the last electricity bill (the electricity deposit was only R1 000). 

According to the email the difference would be refunded to me on the 15th of October. So far I have not received one cent.  What grounds do I have to demand my full refund as they are being opportunistic retaining money from my deposit? 

Alan Levy, an attorney at Alan Levy Attorneys who specialises in evictions, rent recoupment and landlord/tenant law replies:
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E-tolls to shift home buying decisions
The introduction of e-tolling, which now seems imminent before Christmas, will have an immediate effect on home buying patterns as well as the use of public transport.  So says Jan Davel, MD of the RealNet real estate franchise group, who notes: “We expect, for example, that there will be much more demand among young buyers for flats and townhouses in inner city areas close to their workplaces and in those suburbs close to Gautrain and MetroRail stations and on convenient bus routes.

“In fact, we think that access to good public transport could become a factor almost as important as price, because being able to go without a car and all the related expenses may well make all the difference for such consumers between being able to buy a home and having to carry on renting."

He says "location, location, location" will in this sense become the top property consideration once more.”
 
Among older, more established buyers with families, he says, there is likely to be sharply increased demand in the heritage suburbs for homes with space for home offices – even if it’s just a garage or an outbuilding that can be converted – so that owners can cut down on office commutes and gain easy access to good schools and convenient shopping.
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Tax Admin Act aims to simplify
The Tax Administration Act (Act 28 of 2011) took effect from 1 October, apart from certain provisions relating to interest which will take effect from a date still to be determined.

Ilsa Groenewald, associate director, tax at BDO Durban, says according to the South African Revenue Services (SARS) Short Guide to the Tax Administration Act, the Act aims to simplify and consolidate, into one Act, a more logical and systematic way of dealing with the tax administration law.

"It eliminates duplication, removes redundant requirements and aligns different requirements that currently exist in different tax Acts”.

The concept of a single tax Act dealing with administration was first mooted by the Minister of Finance in the 2005 Budget review and has taken a long time to implement.
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Want to buy a home? Family can help
Home buying activity has increased substantially over the past 12 months, even though only about four out of every 10 bonds granted are for 100 percent of the purchase price.  This is according to Rudi Botha, chief executive officer of BetterBond who notes that the number of bond applications made by prospective buyers has been increasing steadily for the past 12 months.

Botha explains that this suggests that buyers have come to terms with the new home financing regime imposed in the wake of the National Credit Act and the global financial crisis, and are doing ‘whatever it takes’ to be able to go ahead with their home purchase plans.

“They see property prices going up again, and they don’t want to miss the boat, and at the same time, rentals are continuing to rise due to a shortage of properties to let.”
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Durban hit by commercial land shortage
The greater Durban area is reportedly experiencing a shortage of land zoned for commercial use with a growing and steady demand for property rentals.  According to David Hitch of the Rawson Property Group, it also takes time to find suitable premises for tenants and even when the rezoning of land in some areas has been identified as suitable, it is often time consuming.

“The market is now ideal for buyers looking to get in on the ground floor while prices are still low and purchases of unzoned properties will be worth substantially more once the rights are in place.”

Hitch’s commercial operation takes in the whole of the greater Durban area.

He explains that currently, there are relatively few companies looking to buy large industrial spaces or to establish themselves in big new premises.
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Reader Comments: 1
Sam 19/11/2012:

Please give advice - can we lay criminal charges? Die agent weier OM die bewys dat die  Deposito in n bank rekening is, te verskaf.    Hoe weet ons dat die geld nie verdwyn het nie. Wanneer die deposito terugbetaal  moet word is dit n bietjie laat.  Dan is dit " waarheen gehasie"!!!!!! Ons verhuur ons vakansiehuis.  Aan wie Moet ons hom rapporteer? Wat is die verdere stappe wat ons moet neem? Die agent Stuur n rekening dat die stoof vervang is, maar die stoof is nog nie n jaar Oud nie, en dit is onder Waarburg. Wat Gaan Aan? 

An answer from eab@eaab.org.za  Would be appreciated: The question is: Are Letting Agents also governed by the rules of conduct of Estate Agents, or may Letting Agents do what they want to do? Specifically as far as the Deposit?  Should the deposit be in a trust account?

Antoinette Bosman I read the following, but cannot find specific instructions or a code of conduct for letting agents or for managing agents of sectional title complexes. Which of following are applicable to letting agents and to managing agents - both of these fall in the property field, and both fall under the consumer protection agency. Estate Agency Affairs Board: Code of Conduct Estate agents in South Africa have to abide by the Code of Conduct regulated by the Estate Agency Affairs Board (EAAB), in terms of the Estate Agency Affairs Act. Selected relevant extracts of this EAAB Code are the following:

Estate Agents' General Duty to Protect the Public's Interest In terms of estate agents' general duty to members of the public and other persons or bodies, an estate agent: 2.1 shall not ... do or omit to do any act which is or may be contrary to the integrity of estate agents in general; 2.2 shall protect the interests of his client at all times to the best of his ability, with due regard to the interests of all other parties concerned; 2.3 shall not in his capacity as an estate agent wilfully or negligently fail to perform any work or duties with such degree of care and skill as might reasonably be expected of an estate agent; 2.4 shall comply with both the Act and the regulations promulgated thereunder; 2.5 shall not through the medium of a company, close corporation or third party, or by using such company, close corporation or third party as a front or nominee, do anything which would not be permissible for him to do if he were operating as an estate agent; 2.6 shall not deny equal services to any person for reasons of race, creed, sex, or country of national origin; 2.7 shall not discriminate against a prospective purchaser of immovable property on the grounds that such purchaser will not, or is unlikely to, make use of financial assistance made available by a specific person or financial institution and which the estate agent offers to arrange on his behalf.

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