Knowing who’s in the lead when it comes to the property market is difficult. The traditional progression used to be: Finish your studies; find a job in which you’ll stay until retirement; get married; buy a starter home; start a family; work hard and finally retire. That tradition has faded away entirely.

The generational divide is nowhere more apparent than in the property market. But is the property market evolving as quickly as society? And is the change happening where it needs to?

Statistics show that the average age of home buyers is 44, smack dab in the middle of the Generation X age bracket, which is 38-53. But Gen Xers may have taken in a difficult niche in the real estate market. Currently, more focus is placed on the generations on both other ends, the Millennials (22-37) and Baby Boomers (54-72), trying to accommodate an older generation that is still thriving and looking for ways to enrich their lifestyles, while also trying to find ways to shape the market for the younger generations.

On one hand, Gen Xers are often as up to date with technology as Millennials, being comfortable with the digital evolution they’ve been a part of since their first antennaed mobile phones and orange-screened Dos computers. In The Dark Knight Rises, Bane says to Batman, “You merely adopted the dark; I was born in it, moulded by it.” With Generation Xers, it may be the fact that they had to adapt to the changing world and be moulded by it that gives them the head start in the real estate market. On the other hand, Gen Xers are more settled in their careers and focused on their families, bringing with them similar financial stability as Baby Boomers.

What makes the Gen X generation so uniquely placed in the economy, is that they incorporate the best of both worlds — being more financially stable, and looking for that stability in their real estate as well, just like the Boomers; but also being able to utilise the advantages of technology and be as connected with the world around them as the Millennials.

That said, Baby Boomers are still proving to play an increasingly active part in the shaping of the real estate industry as the norm of retirement accommodations and “old age homes” drastically fall out of vogue. Those nearing retirement no longer want to be locked up in a room that is barely bigger than a school boarder’s hostel room and have three meals and a corner-mounted television provided in the common room. Thanks to improved health, with regular exercise and a healthier diet, Baby Boomers are looking for ways to make the most of their lives after retirement, creating a demand in the real estate market that had been missing for a long time.

Millennials, while still the largest percentage of first-time home buyers, owning roughly 38% of the market, play a reasonably small part in property sales. But Millennials choosing to rent rather than buy may be out of their hands if one considers the inflation rate was 5.2% in 2018, and salary increases only averaging at 4.9% (resulting in a take-home increase of only about 0.4%, according to BankservAfrica’s Take-home pay Index). Many Millennials are only now entering their careers, and even when they have started a family, they do not have the same financial stability needed to properly invest in their families or become key players in the buying and selling market just yet.

It’s clear to see that shifting the focus accordingly in both the rental and selling spheres has become an essential part of keeping the real estate industry up with the times.

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)

The post Is the real estate market catering to everyone? appeared first on Schnetler's Inc.

Finding a holiday home isn’t as simple as choosing your favourite holiday spot and packing your bags – a decision like this demands time and careful consideration. Let it simmer. This is not a holiday – this is an investment.

Just like those of us who want to avoid over-crowded beaches and rush-hour-like traffic when travelling, you may want to wait for the off-season. Property prices, as well as both the buyer’s and seller’s expectations, may be affected by the holiday buzz.

Be sure to conduct the necessary research. Owning property in an area is different from simply visiting for a week or two during the holidays. Make sure you choose a location suitable for a home, not just a pit-stop. Consider the area’s liveability both in and out of season. Quite often holiday destinations become ghost towns when the holiday season ends. If that is exactly the peace and quiet you want, perfect! If it’s not, you may want to continue your search, because, contrary to their names, holiday homes can’t only be lived in during holidays.

Homes need constant maintenance and care. Staying close to your holiday home will allow you to break away for weekends, making sure the home receives the necessary attention. If your holiday home is a bit too far from your current residence, consider renting it out for the periods when you are not there. This will ensure your property is well-maintained as well as offering you an extra income. When choosing to rent out your property it becomes especially important to make sure the area provides the necessary amenities for everyday living.

The most important aspect, though, is enjoyment. A holiday home is meant to be enjoyed. Make sure you enjoy yours for the longest possible time by making an informed decision.

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)

The post It’s not all fun and games with Holiday Homes appeared first on Schnetler's Inc.

The Minister of Finance, Tito Mboweni, announced in South Africa’s 2020 Budget Speech “to support the property market, the threshold for transfer duties is adjusted”. This news will be welcomed by property sellers, and more particularly, those in the market to purchase property, as the Transfer Duty exemption has now been increased to R1 million. This means that property costing R1 million or less will not be subject to Transfer Duty.

Prior to 1 March 2020, this exemption threshold was R900 000.00.

Transfer Duty is a tax payable on any immovable property which is acquired by way of a transaction or otherwise, including sale, donation, cession or exchange of property.

Transfer Duty is payable at the following rates on transactions which are not subject to VAT:

2021 (1 March 2020 – 28 February 2021)

Calculate the Transfer Duty, Transfer Fees and other amounts payable when purchasing a property by using our free Bond Calculator on our website: https://www.schnetlers.bondcalculatoronline.co.za/.

Contact our offices for any queries on Transfer Duty amounts or Transfer Fees when purchasing an immovable property.

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)

The post 2020 Budget speech: Transfer duty exemption relief appeared first on Schnetler's Inc.

If, on the other hand, one of the parties wants to cancel because the other is in breach of the contract, then certain notice periods come into effect – the first of which being, of course, that the aggrieved party is required to “give written notice for the breach to be remedied. Failure to remedy the breach in the stipulated time period, will entitle the innocent party to cancel the lease and (where relevant) claim damages suffered from the offending party.”

A tenant has the RIGHT to cancel a lease agreement, be it in the 1st month, 4th month or second-to-last month of the lease agreement. He cannot be ‘punished’ for doing this and the cancellation does not constitute a breach of the lease agreement.

What must an agent do if a tenant decides to cancel?

1. Obtain the cancellation in writing from the tenant.
2. Ensure the cancellation gives the requisite 20 business days’ notice.
3. Charge rental until the end of the 20 business days (even if this is not a full month’s rental).
4. Log on to TPN and end the lease as at the end of the 20 business days.
5. Keep in mind the lease now ends as at the end of that 20 business days.
6. Should the tenant remains in the premises a new lease MUST be signed as once cancelled, a lease cannot be revived at law. If you fail to do this, you essentially have no long-term lease in place.
7. Begin advertising the property immediately- the onus is on the agent/landlord to find a replacement.
8. Keep all invoices from the advertising as this is one of the costs you may pass along to the tenant in terms of a ‘reasonable cancellation penalty’.

What can an agent charge the tenant that cancels early?

The idea behind this reasonable cancellation penalty is not to penalise the tenant, but to recover any actual loss suffered by the landlord as a result of the cancellation. The following cost could be applicable:

• Credit check costs for any prospective replacement tenants (even those who are not accepted);
• Advertising costs (only the actual amounts on the invoices);
• Rental – the exact number of days that the unit remains vacant after the tenant vacates.

It is important to keep in mind that all calculations of the penalty can only be made once a replacement tenant has been found. It must also be kept in mind that where a tenant cancels, for example, in month 10 or 11 of a 12-month lease, you cannot charge the tenant the full remainder of the lease as this would negate the cancellation. The principles behind cancellation penalties lie in our law of undue enrichment. A landlord/agent cannot make a financial gain or benefit off of a tenant’s cancellation.

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)

References:

http://www.privateproperty.co.za/advice/property/articles/how-to-cancel-a-residential-lease/3315    http://www.melcoproperties.co.za/template/ArticleDisplay.vm/articleid/2243

The post Cancelling a lease agreement early appeared first on Schnetler's Inc.

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.

2.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.

3.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.

4.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.

5.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)

The post WHAT TO LOOK OUT FOR BEFORE BUYING A PROPERTY appeared first on Schnetler's Inc.

When a person dies, they leave behind an estate which includes everything they own. Estate Duty is payable on the estate of every person who dies and whose nett estate is in excess of R3,5 million. It is charged at the rate of 20%. Currently, SARS is responsible for collecting the Estate Duty of a deceased person.

How does an estate get reported to SARS?

Even if Estate Duty does not apply to you, it is still necessary to inform SARS that the person is deceased. It is recommended that you consult with a legal expert when going through such as process.

Copies of the following documents must be sent to SARS:

• Death certificate or death notice.
• Identity document of the deceased.
• Letters of Executorship (J238) (if applicable).
• Letter of Authority (J170) (in cases where the estate is less than R250 000).
• Certified copy of the executor’s identity document.
• Power of attorney (if applicable).
• The name, address and contact details of the executor or agent.
• The last Will and Testament of the deceased.
• An inventory of the deceased’s assets.
• The liquidation and distribution accounts (if available).

These documents may be sent to the relevant Centralised Processing Centres that is closest to the Master of the High Court where the estate is being administered.

How does Estate Duty work in relation to an inheritance?

All income received or accrued before the deceased’s death is taxable in the hands of the deceased up until the date of death, and will be administered by the executor or administrator acting as the deceased’s representative taxpayer.

• After the date of death of a person, a new taxable entity comes into existence – the “estate”.
• The assets of the deceased will be held by the estate until the liquidation and distribution account has lain for inspection and become final under section 35(12) of the Administration of Estates Act after which the assets will be either handed over to the heirs or delivered to the trustee of a trust estate.

References:

• http://www.sars.gov.za/TaxTypes/EstateDuty/Pages/default.aspx
• http://www.sars.gov.za/ClientSegments/Individuals/Tax-Stages/Pages/Tax-and-Inheritance.aspx

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)

The post THE BASICS OF ESTATE DUTY appeared first on Schnetler's Inc.

Formed in 2001, the tribunal is comprised of five members (including a chair and vice chairperson) appointed by the Provincial Minister of Human Settlements, who each have expertise in property management, housing development and consumer matters pertaining to rental housing.

The tribunal seeks to:

1. Harmonise relationships between landlords and tenants in the rental housing sector.
2. Resolve disputes that arise due to unfair practices.
3. Inform landlords and tenants about their rights and obligations in terms of the Rental Housing Act.
4. Make recommendations to relevant stakeholders.

How do I lodge a complaint?

1. First complete the relevant forms available from the Rental Housing Tribunal.
2. The Rental Housing Tribunal will investigate the matter and find out what the problem is and try to resolve it amicably and as soon as possible.

What will the Rental Housing Tribunal do?

1. They will establish whether there is any dispute between the landlord and tenant.
2. They will try to resolve the matter through mediation – if the dispute cannot be resolved it should be referred to a hearing.
3. They will conduct a hearing, where the landlord and tenant will be summoned for hearing by the Tribunal.
4. A just and fair ruling will be made.
5. Where a mediation agreement has been concluded, make such an agreement a ruling of the Tribunal. This ruling is binding on both parties.
6. The Tribunal may make a ruling as to who pays whose costs.

What happens after I have lodged a complaint?

1. After a complaint has been lodged with the Tribunal until the date of the ruling on the matter, the:
2. landlord may not evict the tenant;
3. tenant must continue to pay the rent; and
4. landlord must maintain the property.

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)

The post THE RENTAL HOUSING TRIBUNAL: I HAVE A COMPLAINT AGAINST MY LANDLORD/TENANT appeared first on Schnetler's Inc.

Questions, and sometimes disputes, often arise between landlords and tenants regarding where the responsibility lies with the maintenance of a property. The simple answer is that tenants can generally only be held responsible for repairs/replacement on the property if the damage was caused by the tenant’s actions, or items that have a short life span, such as light bulbs.

On the other hand, alarm systems, auto gates and doors, locks, fixtures and fittings, appliances, or anything provided to the tenant are generally the responsibility of the owner to repair, unless damaged by the tenant.

The post IS THE TENANT OR LANDLORD RESPONSIBLE FOR THE WATER LEAKS? appeared first on Schnetler's Inc.

When it comes to letting a property, both the tenant and the landlord should always enter into any letting agreements openly and honestly and intending for each party to get proper value. Often it’s the approach which the parties adopt which will determine whether the relationship between the parties and the benefits they derive therefrom is mutually satisfactory. Furthermore, there are important duties that each party is expected to carry out.

Non-Statutory Law (Common Law)

The tenant is obliged to:

• Pay the full amount of rent on the date and time agreed upon by both the tenant and the landlord. The tenant is not entitled to a seven day grace period.
• Take good care of the property and not use it for purposes other than for which it was let.
• Restore it to the same condition in which it was received, at termination of the lease.

Statutory Law (The Rental Housing Act)

The tenant is obliged to:

• Make prompt and regular payment of rent and other charges payable in terms of the lease.
• Make payment of a deposit, the amount of which should be agreed upfront between the landlord and tenant.
• Take part in a joint incoming and outgoing inspection with the landlord.

The Property Owner

The prime duty of a property owner is to give a tenant occupation and control of the property. Furthermore, the owner has to maintain the property in its proper condition, subject to fair wear and tear (defined as the ‘unavoidable consequence of the passage of time’). The owner must also ensure that normal running repairs to the property are carried out.

A second important duty of the owner is the guarantee that the tenant will be afforded the undisturbed use and enjoyment of the property for the duration of the lease. This duty has three facets:

• The property owner must not unlawfully interfere with the tenant’s rights although he or she is entitled, in certain circumstances, to interfere lawfully if, for instance, the tenant has to vacate the premises temporarily to allow necessary repairs to be done. Although an owner also has a right of inspection, this right must be exercised in a reasonable manner.

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)

Reference:

http://www.privateproperty.co.za/advice/property/articles/tenants-rights-and-obligations/559

http://www.legalcity.net/Index.cfm?fuseaction=RIGHTS.article&ArticleID=2663821

http://www.chaseveritt.co.za/tenant-rights-south-africa

The post WHAT ARE THE DUTIES OF THE TENANT AND LANDLORD? appeared first on Schnetler's Inc.

Dear Mr Lawyer

I am the owner of a sectional title, and I have paid my levies every month as required, until the water started seeping through the ceiling of my enclosed balcony into my section when it rains. The leak was clearly emanating from a defect in the common property. I asked the body corporate on numerous occasions to repair the defect, yet after four months of writing letters and sending emails the body corporate still has not done anything to honour this simple request. As a frustrated owner I resorted to desperate measures and employed a contractor to repair the property defect. I settled the bill myself.

May I withhold my levies for a period to set off the money that is owed to me by the body corporate?

Dear Mr Owner

Although this action may sound reasonable, the right to stop paying or to set off a debt against levies is not legally justified and owners are not, under any circumstances, entitled to simply withhold levies.

There is no provision in the Sectional Titles Act 95 of 1986 or the rules that gives an owner the right to withhold levy payments. Even if an owner incurs expense in performing an emergency repair to the common property, and believes that the body corporate owes him money, the owner may only set off the debt against the levies once it becomes liquid.

An amount can only be liquid once it has been agreed upon. An owner cannot set off the amount he believes he is entitled to deduct. The trustees, judge or arbitrator must have confirmed the amount.

If Mr Owner does withhold his levies without the amount being liquid, he is subject to the following sanctions in terms of the prescribed rules:

l Firstly, the trustees are entitled to charge interest on arrear amounts at a rate determined by them, and so the defaulting owner may receive a larger account, due to the interest on his arrears, than if he had paid his levies.

l What is more, The Sectional Titles Act imposes a positive obligation on trustees to recover levies from defaulting owners. Not only does the Act empower them to charge interest, the scheme attorneys will most likely issue summons against the defaulter for all costs that the Body Corporate may incur in recovering any arrears.

l Secondly, the prescribed management rules provide that, except in the case of special and unanimous resolutions, an owner is not entitled to vote if any contributions payable by him in respect of his section have not been duly paid. Therefore, an owner who withholds his levies is unable to vote for ordinary resolutions in respect of the section that he is withholding levies on.

Mr Lawyer, how does an owner deal with a situation where he believes the body corporate is liable for payment?

A dispute must be declared with the Body Corporate by written notice of the dispute or query to the trustees. The trustees or Body Corporate then have 14 days from receipt to resolve the dispute. During this period, the parties should meet to try and resolve the dispute. If there is no resolution after the 14-day period, either party may demand that the dispute be referred to arbitration. The arbitrator must make his/her recommendations in settlement of the dispute within 7 days from the date of commencement of the dispute. The decision of the arbitrator shall be final and binding and may be made an order of the High Court.

It is clear that prescribed processes are in place according to which disputes and related issues can be settled. Not only will this ensure that you act within the legal guidelines, but it will also eliminate unnecessary frustration.

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).

The post PAY YOUR LEVIES, OR ELSE… appeared first on Schnetler's Inc.