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17 July 2014

The five essentials of sectional title insurance
Trafalgar - South Africa
Insurance is frequently the cause of disagreements and disputes in sectional title schemes, but it need not be if unit owners, trustees and their managing agents just keep a few basic principles in mind.

“The first of these,” says Andrew Schaefer, MD of leading national property management group Trafalgar, “is that the body corporate insurance (and the extent of that insurance) is a legal requirement in terms of the Sectional Titles Act. The trustees thus have to ensure that it is in place and there can be no debate among owners about whether it is needed or not.”

The second thing to note, he says, is that every owner in the complex, by default, pays part of the cost of this insurance. This cost (the premium) is typically included in the annual budget for the complex, and paid for out of the owners’ monthly levies. Indeed, the percentage of the premium to be paid by each owner should be calculated on the same basis as their monthly levies – usually the participation quota (PQ) applicable to each sectional title unit.
The five essentials of sectional title insurance

Property market steaming ahead, says BetterBond
BetterBond - South Africa
The latest statistics from BetterBond Home Loans, SA’s leading mortgage origination group, show ongoing positive activity in the residential property market. The figures reveal a 12,05% increase in the number of home loan applications received by BetterBond in the month of June compared with the same month of 2013, and a 9,23% increase in the value of applications submitted to the major lending banks.

They also show, notes BetterBond CEO Shaun Rademeyer, that there was an increase of 4,11% in the value of home loan approvals. “In addition, in the 12 months to end-June, there was an increase of 4,19% in the total number of bonds for which we secured approvals, and a 6,57% increase in the total value of those bonds to more than R36,2bn, compared to just under R34bn in the previous 12 months.”
Property market steaming ahead

Why your home is an asset
Moneyweb - South Africa
Craig Gradidge's rebuttal to Ann Wilson's view.

I read Patrick Cairns’ article “Your house is not an asset” recently, not realising that it would be a feature of my day. I had gone to see a new client (who had also read the article) and while he was filling in the balance sheet section of the information sheet, he started the debate of whether or not to include his primary residence as an asset. After a reasonably lengthy discussion on the issue, he included it but maintained some reservation, referring to the article a number of times.

While driving back to the office from that meeting, an advertisement on a local talk radio station caught my attention. It went something like “what have you done recently to develop your company’s biggest asset – your staff?” As a business owner I have never seen my staff as an asset, it seems to smack of slavery. Would I value the younger, stronger staff members at a higher price? Maybe those with qualifications and experience are worth more than those without? When I look at the financials I see more expenses associated with staff, rather than them being an asset of some sort. Don’t get me wrong, I understand their importance, and I value their contribution to the business, but are they really assets?

These seemingly unrelated issues have a common basis.
Moneyweb

Check contract before deducting costs from rent
IolProperty - South Africa
The tenant of a residential lease is under duty to pay rent regularly, on time and in full as required by section 4 (5) (a) of the Rental Housing Act 50 of 1999.

Failure to pay rent on time or withholding rent is a material breach and may lead to the cancellation of lease, or the landlord's refusal to renew it.

In common law, a tenant has a weapon, a right to deduct from the rent (set-off) where the landlord is in default.

However, the tenant cannot rely on set-off if the lease has a clause for parties to contract out of this common-law right. It is a general practice to include a clause that restricts the tenant's common-law right to prevent any deduction or set-off.

The following are examples of such a clause:
IolProperty

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