For homeowners wanting to increase the value of their property, property renovation offers one of the most effective and simple ways to boost property values – something that in today’s tough property market goes a very long way indeed. How does renovation help exactly however, and is it worth the cost of endless building, fixing and remodelling? Here are three of the biggest reasons to consider the benefits of renovating your property:
Category : General
We are at the end stages of our various expansion projects, some of which include, bigger offices, additional staff, a revamped website and new partnerships which have been put in place to ensure our clients maximum growth and optimum service at all times.
It seems 2010 has given the much needed injection of excitement and motivation into the industry evidenced by the increased movement in the market which seems to be growing on a monthly basis as the long awaited Soccer World Cup draws closer and closer to a reality.
As most Property Management agencies begin to increase their prices for 2010, our pricing structure will remain as per usual for the foreseeable future as the pockets of South African citizens will be one of the major casualties of the Soccer World Cup. We are doing everything possible to protect the investments of our clients, both short and long term.
Our primary objective is to maintain the wealth of South Africans by not jumping on the 2010 bandwagon of increased prices motivated by the attraction to the abundance of foreign currency which will be flowing through our country this June.
The publication of articles written by both myself and other staff members form the beginning of the new (and hopefully improved) interface of the company, through which we hope you will learn more about us and the team behind our property division.
- Insurers and underwriters often have specific contractors that must quote on insurance related repairs;
- Insurance will not cover any damage caused as a result of a failure to maintain any item;
- Insurance will not pay for replacing any item which can be saved or repaired;
- Insurers will not accept an incomplete claim form;
- The cause of the damage must be repaired and proof thereof is often required;
- Neither of the above mentioned insurances cover the contents of any property, this will only be covered in a policy specific to your contents
From 2011 and after the implementation of the Consumer Protection Act (“The Act” or “CPA”), South African consumers will be among the best protected consumers in the world. South Africa, a company with a diverse population and history of persecution has been the breeding ground for many empires preying on not only the uninformed but also the misfortunate consumers.
The CPA will have far-reaching implications, much further than most business operators currently anticipate by promoting and advancing the Social and Economic welfare of consumers in South Africa with regard to both products and services, and in essence, prohibit certain unfair marketing and business practices in order to protect against exploitation in respect of transactions concluded and the promotion of goods within the Republic of South Africa. The Act places great emphasis on honest and fair dealings as well as responsible conduct of service providers within the Republic of South Africa.
The Acting Deputy Director General in the Department of Trade and Industry, Ms Nomfundo Maseti, says “the primary purpose of the Act is to protect consumers from exploitation and unfair practices in the marketplace from unscrupulous businesses, and to empower consumers to make wise purchasing decisions. It achieves this by introducing, amongst others, a system of product liability and improved redress.”
“Producers, distributors or suppliers, will be liable for any damages in the form of death, injury, loss, or damage to property and economic loss, to the consumer or third party. This Act decriminalises certain conduct and subjects it to administrative sanctions, while also enables consumers to demand refund if the goods are of inferior quality”.
“Consumers may return the goods to the supplier, without penalty and at the supplier’s risk and expense, if the goods fail to meet the required standard”, added Maseti.
The CPA is a further development of South African Law which challenges both product and service-based industries which focuses on promoting a fair, accessible and sustainable platform upon which service providers and retailers must conform to and for that purpose:
- Establish national norms and standards of consumer information,
- To prohibit unfair marketing and business practices
- To promote responsible consumer behaviour
- To promote a consistent legislative and enforcement framework relating to customer transactions and agreements
The Act extends further than just to transactions of a sales and service based nature but also includes the way in which these companies market themselves to the end-user consumers.
The Act is a definite step in the direction of ensuring the protection and equality of all consumers. Some of the provisions, although seemingly Draconian in nature expose companies which otherwise would have been indemnified against risks inherent to their trade including both their acts and omissions.
It is extremely important for the interpretation of the Act to understand the definition clauses of both the Supplier as well as the Consumer.
Definition of a Supplier:
A person or an entity who markets Goods and Services, irrespective of whether the supplier:
- Resides or has its principal office within or outside the Republic
- Operates on a for-profit basis or otherwise
- Is an individual, company, close corporation, partnership, trust, organ of state, an entity owned or directed by an organ of state, a person contracted or licensed by an organ of state … or is a public-private partnership
- Is required or licensed in terms of any public regulation to make the supply of the particular goods or services available.
Definition of a Consumer:
- A person to whom particular goods or services are marketed in the ordinary course of the supplier’s business
- A person who has entered into a transaction with a supplier in the ordinary course of the supplier’s business
- A user of those particular goods or recipient or beneficiary of those particular services, irrespective whether that user, recipient or beneficiary was a party to a transaction …
- A franchisee in terms of a franchise agreement
Managing Agents are appointed for Bodies Corporate to fulfill certain operational, administrative and legal duties or requirements.
Managing Agents are also expected to stay up to date with changes in legislation, both in Sectional Title as well as other areas of law.
The administration of levy accounts is one of the most important and often overlooked areas of administration. No Body Corporate can function efficiently without a healthy bank balance and it is with the guidance of the Managing Agents that foreseeable expenses are planned for well in advance.
The insurances of the property is also an extremely important aspect of the functions of a Managing Agent. No building or property should ever be under insured, over insured, uninsurable or void of certain policies. It is in this area that the guidance of an experienced Managing Agent can make all the difference.
A Body Corporate, by its very nature and design, must be properly maintained or repaired. Any inaction in this area could expose a Body Corporate to the legal elements, particularly in cases where a failure to do so could result in a potential void, either wholly or partially to the insurance policy.
When improvements or repair work is undertaken, a levy payer wants his or her value for money. The ability to assess quotations and oversee work is of fundamental importance.
The proper control of banking accounts should not be underestimated. The Managing Agents should have the ability to properly reconcile accounts, pay expenses on time and invest surplus funds at preferential rates.
The Managing Agents duties often extend far beyond the scope of their contract. Many aspects of property knowledge, law, building and municipal regulations are encountered on a daily basis.
When choosing a Managing Agent, choose one that’s right for you.
One of the most common questions we have been asked lately in practice is how to deal with troublesome Managing Agents and how to go about the process of changing Managing Agents.
As with many service providers, notice periods and the terms of cancellation depend entirely on the contract you have with your Managing Agent. Many contacts for management preceed the appointment of the current board of Trustees as well as Owners in the scheme.
Given the circumstances, many people are extremely hesitant to change service providers despite sub-standard service they have been receiving.
Although changing Managing Agents may appear, on the face of it, to be an act which incurs expenses beyond the scope of the Trustees authority, one should bear in mind that these restrictions are to be put in place for UNBUDGETED items only and therefore may not be effected by the restrictions.
Changes in regime will often be met with hostility and for this reason, one should handle the process of changing Managing Agents extremely carefully.
An exercise which we encourage in practice would be to list the non-negotiable aspects of the services one should reasonably expect from a Managing Agent and find a suitable candidate, capable of eliminating the current problems.
The reputation of a building tends to be subject to an accumulation of experiences of residents and owners experiences when dealing with matters relating to the Sectional Scheme and having a competent Managing Agent certainly goes a long way to extending the profitability and cultivating a good reputation for any long or short term relationship of a Sectional Scheme.
On occasion there have been claims submitted for walls that have either cracked or fallen over due to a tree’s roots that have grown under the wall and lifted it. These claims have been repudiated due to the fact that this is seen as an occurrence that could have been prevented by the trustees or owner prior to the tree been left that long in order to cause this problem. However, should a flood occur and the force of the water result in the wall falling over, this claim would be honoured as per PMR 29(1)(a)(iii).
The views contained herein are that of Biccari Bollo Mariano Inc , a firm of attorneys specialising in Sectional Title Legislation. For more information on this issue please contact:
Marianette Bubb - Sectional Title Consultant
BICCARI BOLLO MARIANO INC
Tel: (011) 628-9300 | email: email@example.com
If history is an indicator, Bodies Corporate need adequate protection against rogue Managing Agents.
There are various ways a Body Corporate can protect itself against unfortunate incidents.
Prescribed Management rule 29.2(b) states that the trustees obtain fidelity cover for the maximum funds held in the current account as well as investment accounts of the Body Corporate. We would further recommend that your broker be contacted for quotations and further advice on the additional cover required.
Investment accounts should be managed by the trustees of the Body Corporate and only be operated through signatures of these trustees.
We also recommend that a limited balance be held in the current account of the Body Corporate in order to cover daily operating expenses and thereafter invest surplus funds at regular intervals.
The Managing agents should keep full records for all transactions relating to Body Corporate expenses.
A Managing Agent MUST be registered with the Estate Agency Affairs Board and be in possession of a valid fidelity fund certificate. The trustees should also ensure that the Managing Agents holds additional fidelity insurance cover in order to cover itself against fraud and theft by its staff members. The Estate Agency Affairs Board fidelity fund covers only the agent concerned, not necessarily the staff of the agent and only covers funds held in the Managing Agents trust account. All other funds including bank accounts or investment accounts in the name of the Body Corporate are thus not covered. The trustees should also ensure that the Managing Agent holds professional indemnity insurance.
It is recommended that Managing Agents be registered with the National Association of Managing Agents (NAMA). This is a voluntary membership and registered members subscribe to a professional code of conduct.
People who default on their levies in sectional title complexes can expect to be harshly penalized with penalty interest and administration fees in accordance with Body Corporate policies as determined from time to time.
Levies represent the financial health of a Sectional Title scheme. Annual financial statements and debtors lists are becoming commonly requested by banks when determining the credit worthiness of clients for the particular scheme.
Too many owners are ‘piggy-backing’ off of the owners who do pay their levy timeously and are detrimentally effecting the financial statements and credit worthiness of buildings which in turn, decreases their investment.
Many complexes have adopted the approach of harsher penalties on non-payments due to the common trend of levies being last on the list of monthly payments to be made. Levies are prioritized far down the list as Owners feel the Body Corporate will not be in a position to take harsh action.
The principle of harsh penalties should be widely applied to ensure the Body Corporate can function optimally by making its monthly commitments and honor its monthly commitments.
This view is not contrary to any existing South African legislation including the National Credit Act.
Do you own property through a trust, company or CC? Transfer it into you own name before 31 December 2012 to avoid paying transfer tax
Those who own residential immovable property in the name of a juristic person (Ie. a trust, company or close corporation (CC)) have until 31 December 2012 to transfer the property into their own name without paying additional taxes if the beneficiaries or members meet certain conditions.
These conditions are set out in paragraph 51A of the Eighth Schedule to the Income Tax Act, 1962. One condition is that the property must be transferred to a person who ordinarily resided in the property for a certain period. But on 2 June 2011, the National Treasury announced that it intends changing the law to scrap this condition. The only requirement in this regard would be that the member or beneficiary had used the property for domestic purposes.
Proper advice should be sought before transferring property in terms of the new legislation as the property may still be subject to Donations tax in certain circumstances.