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25 June 2015

Residential building statistics
Absa - South Africa
Divergent trends in residential building activity

Levels of building activity in the South African market for new housing showed divergent trends in the first four months of 2015, with volumes in the planning phase growing while volumes in the construction phase declined from the corresponding period in 2014. This divergent course in levels of residential building activity originated from opposite trends on a segment level in both the planning and construction phases. These trends are based on data published by Statistics South Africa in respect of building activity related to private sector-financed housing (see explanatory notes).

The number of new housing units for which building plans were approved, increased by 4,6% year-on-year (y/y), or 813 units, to 18 441 units in the period January to April 2015. While the volume of plans approved for houses smaller than 80m² was down by 19% y/y up to April, the number of flat and townhouse units planned increased by almost 40% y/y over the same period.

The volume of new housing units reported as constructed declined by 5,2% y/y, or 628 units, to 11 492 units in the first four months of the year, mainly as a result of the flat and townhouse segment contracting by around 34% y/y in January to April. The construction of houses larger than 80m² saw growth of almost 18% y/y in the four-month period.

Although there can be a significant lag between the planning and completion of relatively large housing projects, such as flat and townhouse developments, the strong growth in respect of the planning phase in this segment of housing in the first four months of 2015 is expected to be eventually reflected in the construction phase later in the year.
Building stats Apr 2015

The importance of an incoming inspection on rented premises cannot be over-emphasized
Rawson - South Africa
One of the mistakes most often made by tenants renting commercial property is to move into the space for which they have signed without carrying out a thorough incoming inspection.

“Inspections of this kind by the landlord and the tenant form part of the lease agreement but it is surprising how frequently they are done inadequately,” says Leon Breytenbach, National Manager of Rawson Commercial.

“It is perfectly understandable,” adds Breytenbach, “that today’s entrepreneurs are in a hurry to get established and to keep their businesses moving ahead. However, the consequences of not properly inspecting the property before the tenant moves in can be very serious indeed and can often lead to ongoing disputes between the tenant and the landlord.”

Most of the complaints that are made after the tenant has taken occupation, adds Breytenbach, relate to the condition of the roof, the floor or the air conditioning – and in almost every case it later becomes evident that these matters were not checked on thoroughly at the incoming inspection.
Rawson

Be careful when signing surety for tenant
IolProperty - South Africa
The landlord can hold a third person who signed as surety and co-principal debtor, responsible for the payment of rental if the tenant is in default or unable to perform.

In terms of section 6 of the General Law Amendment Act 50 of 1956, suretyship must be in writing. The third party becomes responsible when he or she signs a surety agreement that may be a separate agreement or forms part of the tenant's lease agreement.

The suretyship binds the surety to the landlord who is entitled to demand performance of specific obligations included as part of the terms and conditions. These may relate to payment of rental, rates, damages and legal costs.

The surety may agree that the landlord can claim directly from the surety all amounts owed by the tenant, without claiming from the tenant.
IolProperty

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