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Property 24/10 - 171

29 August 2013

Maintenance and repairs when renting
Negotiation of the responsibilities of each party in a rental agreement, i.e. the tenant and the landlord, can sometimes have some 'grey' areas.

Michael Bauer, general manager of IHFM, says this often happens when it comes to dealing with general maintenance of the building and repairs.

The law isn’t specific as to who is responsible for what as far as maintenance and repairs to a home go, but simply put 'fair wear and tear' must be accepted by the landlord and he must keep the property in a fit manner to live in, says Bauer.

The interpretation of 'fair wear and tear' differs from person to person, as does a fit state to live in. Some people would not notice a worn carpet for instance while others would find it unacceptable, and some would accept the nicks and scrapes on walls from little children being in the house whereas others would not.
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Do it right to avoid illegal eviction
Once DIY landlords have bought their investment property or built additional accommodation on their premises, they are often eager to get tenants into their units quickly.

However, it has to be remembered that all the necessary checking processes must be done before signing a lease agreement with a tenant.

Lanice Steward, managing director of Knight Frank Anne Porter, says if the tenant later realises he can no longer afford the rent but does not want to vacate the property, the landlord will have a problem on his hands. The law in South Africa provides more protection to tenants than before and it is not unsurprising that landlords feel the current legislation enables tenants to get away with not paying rent or that it offers more protection to the tenant, she says.

Landlords can't simply change the locks or restrict access to the unit, as it is necessary for them to go through all the procedures as prescribed in the Prevention of Illegal Eviction (PIE) Act. This act aims to protect the tenant’s and landlord’s rights simultaneously, it prevents unlawful eviction but it also allows for legitimate eviction of unlawful tenants.
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Tenant reneging on lease renewal
What happens if a tenant’s lease for the year has expired (in the original contract it stated that he had an option to renew the lease for a further year, with a negotiated increase) and he says he’ll be renewing the contract but decides to cancel it after a few months?

Michael Bauer, managing director of IHPC estate agents, says this does happen from time to time and any communication going back and forth between the landlord and tenant should be put into writing. Even if the confirmation of the agreement is via email, that is still legal and binding, he says.

If the tenant says he would renew his lease, this is seen to be a contract as there was an offer and an acceptance of the offer. Therefore, even though the tenant might have changed his mind he is still, in effect, held by the agreement via email or telephone to stay on for an additional year.

The fact that he may not have signed an official lease agreement document does not make the agreement any less valid, says Bauer.
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Tips for SMEs looking for rental space
Before signing a lease, small to medium enterprises (SMEs) need to do their research, know their requirements, and plan for the future.

This is according to Michelle Dickens, Founder and Managing Director of the Tenant Profile Network (TPN), who says tenants need to be aware that their information is being recorded to their credit profiles. She says your payment behaviour will affect your credit profile and the knock-on effects of defaulting could be extensive.

A variety of functions come into play when SMEs are looking for rental space that will suit their specific business needs. Many of these considerations, such as size and location, are obvious. However, as Dickens points out, there are other important questions you need to have answered before you sign into a lease.
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Training key to meeting clients'needs
The primary aim of all estate agents' training has to be the increase of the agent’s ability to be sensitive and sympathetic to the client’s needs.

This is according to Tony Clarke, Managing Director of the Rawson Property Group, who says all too often estate agents are accused of being insensitive and there is perhaps nothing clients dislike more than the feeling that the estate agent is focusing on achieving a sale and not on their needs. He says the culture at the Rawson Property Group is non-exploitative and the primary aim of their agents is to always focus on the people and not the sale. The group’s training courses emphasise this attitude further by promoting the belief, ‘we sell homes, not properties’. This, he says, is the only attitude that will ensure sustained success.

Clarke says training that genuinely results in estate agents adopting this approach has shown to be pivotal to their achievements and to building up a base of satisfied clients.
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Credit amnesty looming
There’s a credit amnesty coming and it will make it even more important for property sellers and landlords to enlist the help of qualified and experienced estate agents.

This is the word from Jan Davel, MD of the RealNet estate agency group, who says the amnesty will no doubt be welcomed by many, but will make it difficult to assess the creditworthiness of potential home buyers and tenants. The amnesty, proposed by the Department of Trade and Industry (DTI) and the National Credit Regulator (NCR), is expected to become law before the end of the year, and the most likely effect will be that the credit bureaux is required to remove all adverse listings relating to debts of less than R10 000 going back to 2006 (irrespective of whether these have been settled or not), as well as all adverse information about paid up debts or judgments on a continuing basis.

It is anticipated that this will immediately apply to between 1.5 million and two million people with impaired credit records, most of them understood to be earning less than R15 000 a month.
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FNB's e-learning homeownership course
FNB’s Housing Finance division has taken its compulsory homeownership education programme for first-time buyers, out of the classroom and onto the web with great success.

First-time homeowners applying for a Smart Bond are expected to complete the course before registration of their bond. Seventy five percent of bond applicants are now choosing to use the e-learning system and since the introduction of e-learning in February 2013, FNB has seen an 87 percent decrease in turnaround time for completion of the course from 9.8 days to an average of 1.3 days.

Marius Marais, CEO of FNB Housing Finance, says their homeowners programme has always been an important aspect of the bond registration process for their customer. He says good quality financial education on owning a home is vital in order to ensure that homeowners understand the financial impact of their decisions and make the most of their biggest asset.

The bulk of homeowner or borrower education occurs in a traditional classroom setting with training courses falling over the weekends. He says while the effectiveness of a motivated, knowledgeable trainer is undisputed, there are a few challenges that they have found using the traditional classroom method.
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Is your home loan cover enough?
It is disturbing how often the surviving spouse in a marriage, usually the wife, is forced to sell the home to meet outstanding bond payments when the breadwinner dies.

This is according to Daphney Klopper, Rawson Property Group’s franchisee for Table View and a co-franchisee for Parklands, who says quite often, the sum raised by the sale of the home is insufficient to enable the surviving spouse to buy again, even at a much reduced price level, and then she becomes a tenant in perpetuity.

In days gone by, Klopper says this almost never happened because the bank granting the bond would insist on the borrower taking out sufficient life insurance to repay the whole bond and to have something over on which to live.

Nowadays, however, she says the banks, in an effort to make home buying more affordable, will often insist only that the structure of the home is insured.
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