Transform Real Estate Vol. 2 by MA PUBLISHING

ISSUE NO.2 / 2019/

SPOTLIGHT: WHAT IS AFFORDABLE HOUSING

BUY-TO-LE T

How to make money through property investment in South Africa, and turn rental properties into personal wealth.

CASPER NYOVEST

Transform Real Estate had the pleasure of chatting with Cassper Nyovest about music, family and real estate.

Vaal | Soweto | Ekurhuleni

On show daily

New Houses by DVR Property Development Prices from R410 000 REACH US ON Rhoda Name: Grootboom Themba Thuntubele Tel: 011 243 5012 083 637 8242

Tel:

072 021 3915

Email: rhoda@awcihomeloans.co.za

Email : themba@awcihomes.co.za

Website: www.awciproperty.co.za info@awcihomes.co.za 011 243 5012

CONTENTS REGULARS

Investing in the Future About AWCI Investment & Property.

From the Chairperson We speak to the Chairperson Ms. Elizabeth Sangion.

SPOTLIGHT

Affordable Housing for All Affordable housing is an often misunderstood term and for many includes everything from RDP housing and other government housing initiatives.

CONVERSATIONS

Housing for the Missing Middle Transform Real Estate magazine had the opportunity to sit down with Nonhlanhla Buthelezi, Chief Director: Operational Policy Frameworks at the Department of Human Settlement.

The Ins & Outs of Real Estate Penny Mboyi, the eldest of four children, grew up during the 1960s in Kwa Thema in the East Rand of Gauteng. Gwynedd Peters sat down with Penny to find out how she transitioned from teaching to banking, and finally settling down as the principal of her own estate agency with AWCI Homes.

LEGAL

What 1st time buyers should know Buying a home for the first time can be a scary process, especially if you have no idea of what the process entails.

Housing Subsidies Did you know that as an employee of the South African Government, such a dream could be that much easier to achieve?

26 38 NEWS BUY-TO-LET

How to make money through property investment in South Africa.

GIRLS WITH PROPERTY

Securing my Future through Property Nano Shadung is a 26-year-old marketing coordinator living in Johannesburg who believes she is securing her future through property ownership.

Becoming an AirBnb Mogul

Mthuthu Msibi is a worldly woman taking strides to be Johannesburgâ&#x20AC;&#x2122;s next property mogul.

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

Breaking Down the House Unpacking the impacts of customary marriage on estate planning, inheritance and property ownership.

HISTORY

THE TEAM CHAIRPERSON: Elizabeth Sangion EDITOR: Gwynedd Peters MANAGING EDITOR: Nthabiseng Rapuleng PHOTOGRAPHY: Sanmari Marais (Sammy Shoots Photography) ADDITIONAL PHOTOGRAPHY: Adobe Stock, Shutterstock, Cassper Nyovest Instagram, Gauteng Department of Human Settlements, Mthuthu Msibi, Nano Shadung, TGR Attorneys, DVR Property Development, Penny Mboyi, Brand South Africa, AWCI, Elizabeth Sangion, EDITORIAL CONTRIBUTORS:

STORIES

Rap, Family & Real Estate Transform Real Estate had the pleasure of chatting with Cassper Nyovest about music, family and real estate.

Civil Servant: Now Home Owner Bontle wasn’t born in Johannesburg, but for as long as she can remember she has had dreams of the big city life. After marrying her husband, and qualifying as a nurse, they made the decision together to head to the City of Gold, and have since settled in Cosmo City.

Gwynedd Peters, Elizabeth Sangion, Bronwen Bartlett, Nthabiseng Rapuleng, Leshoko Mokgobu, Bibi Smit, Francois Janse van Rensburg, Nonhlanhla Buthelezi, Nano Shadung, Mthuthu Msibi, Penny Mboyi. EDITORIAL ENQUIRES info@transformrealestate.co.za 011 243 5012 www.transformrealestate.co.za ADVERTISING AND MARKETING ENQUIRES nthabiseng@transformrealestate.co.za leshoko@transformrealestate.co.za 011 243 5012 SUBSCRIPTIONS info@transformrealestate.co.za www.transformrealestate.co.za 011 243 5012

VOL.2 / JANUARY 2019/

SPOTLIGHT: AFFORDABLE HOUSING FOR EVERYONE

TRANSFORM MAGAZINE PUBLISHED ON BEHALF OF: AWCI PROPERTY PUBLISHERS: Main Angel Publishing, 2 De Oude Waterkloof, Petrus Street, Rietvalleirand, Pretoria

BUY-TO-LE T

CASPER NYOVEST

Transform speaks to an expert in this field for the inside scoop on how to turn rental properties into personal wealth.

Unless otherwise agreed to, all contributions are the property of Transform Magazine, and its publishers. All editorial, business and production correspondence should be addressed to Main Angel Publishing: 462 Grysbok Street, Waterkloof Ridge, Pretoria. © Copyright by Main Angel Publishing. All rights reserved. The opinions expressed in Transform Magazine are not necessarily those of AWCI Property, the publishers, its suppliers, subsidiaries or affiliates. The editor and publisher reserve the right to alter copy and visual material as deemed necessary.

Transform speaks to this superstar about his house, his family and putting his wealth to good use through property.

THE COVER

Affordable housing development, by Gert Prinsloo of GP Drawing Services for DVR Property Development.

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

INVESTING IN THE FUTURE WITH African Women Co-ordinated Investments (Pty) Ltd (AWCI) is a new-generation BEE women empowerment company with a proven track record in not only deal making, but also in growing shareholder value for its wide shareholder base. AWCI was established in the latter part of 2003 as a broad representative business and investment organisation. Dedicated to the economic empowerment of South African women from previously disadvantaged backgrounds, AWCI is represented across all nine provinces. The company’s unique structure consists of a registered holding company AWCI (Pty) Ltd. This represents nine registered provincial companies who collectively make up the majority shareholders. The result is meaningful empowerment and national representation. AWCI was established on the principle that South Africa needs to grow its economy organically, to afford its majority citizens fair economic opportunities and prospects.

Our Mission:

• • •

To encourage a culture of constant progress and economic empowerment of women. To help develop women through skills transfer, job creation and financial assistance and empowerment. To create strategic women business leaders across every sector of our economy.

Strategy It is 100-percent owned, controlled and managed by previously disadvantaged women representing various professions, businesses and industries.

AWCI’s founding objectives include the following:

• • • • • • •

To promote a culture of constant advancement and improvement for all black women, from both rural and urban backgrounds. To encourage investing businesses and industries to recognise that business can no longer be a male-dominated domain. To ensure fair competition between men and women in business. To facilitate the development of women through skills transfer, job creation, financial assistance and empowerment. To develop strategic business leaders in all areas of the South African economy. To ensure that black women are properly and strategically positioned and utilised for The purposes of securing BEE opportunities and projects.

The emergence of AWCI in the BEE landscape was a direct response to a call by Government to the South African business community to commit to the empowerment of previously disadvantaged individuals, especially women. As part of the company’s growth strategies and plans going forward, the company will leverage its deal- making experience, internal skills base and asset base to pursue opportunities for women in the various sectors of our economy. The company’s internal skills capacity helped set the foundation for what later proved to be a solid base in the growth plans of the business. AWCI has received admirable recognition as a serious player in the country’s economic landscape. It is part of our strategy to continue doing so. AWCI is committed to building and developing local talent through our involvement in communities across South Africa. This determination remains one of our core goals and the most essential ingredient of our economic empowerment success.

Our Vision: Our vision is to become the foremost broad empowerment vehicle for total economic emancipation of women from previously disadvantaged communities.

We also intend to invest actively in sectors and seek opportunities that will contribute to the economic empowerment of women. AWCI will do this through building meaningful and empowering longterm partnerships with key players in the South African economy.

AWCI PROPERTY AWCI Property is a black women-owned, full-service property group dedicated to providing excellent, professional and top class service. We are passionate about making a difference in peopleâ&#x20AC;&#x2122;s lives and our vision of creating wealth for black people through property ownership is what drives us. The mission at AWCI Property is to enable black individuals to participate in the property economy, restoring dignity and hope, creating wealth and enabling you to leave a legacy for the next generation. The AWCI Property portfolio consists of the following organisations: AWCI Bonds; AWCI Homeloans; AWCI Homes; AWCI Rentals and AWCI Wealth. Our mission is to enable black individuals to participate in the property economy. Restoring dignity and hope, creating wealth and enabling you to leave a legacy for the next generation.

Some of what AWCI can do for you - learn about these and more right here in TRANSFORM REAL ESTATE MAGAZINE Wealth The greatest investment you can make is property ownership. Homes We aspire to produce high calibre black women Real Estate Practitioners. Property and Rental Management At AWCI Rentals we pride ourselves in putting Landlords and Tenants first. We provide professional service and guidance for all types of family housing, residential and commercial properties. Property Institute When it comes to selling and buying a home, it is important to trust in a Real Estate Agent who cares about your neighbourhood as much as you do. We train such agents to be the best and most knowledgable in the business. Home Loans We pre-qualify you and source the best home loan. Do you qualify for a home loan? How much will you qualify for? These are the questions that go through your mind and which can make buying a home feel very scary and intimidating.

Elizabeth Sangion a word from chairPERSON Addressing inequality through property ownership - South Africa is known for its extreme income inequality, which is amongst the highest in the world. There is no doubt that the severe inequality in our country is the cause of the devastating poverty that currently exists and creates havoc in our people’s lives. As a country, we have made significant progress, but unfortunately, the economic disparities continue to torment us and are the biggest obstacle to the growth of the economy. It is important to recognise that to overcome inequality we have to allow people their property rights, in doing this we create a sense of security. A sense of security that comes in owning an asset which leads to feelings of self-respect, independence and pride. As the World Bank puts it, “These assets interact with the market and social opportunities to generate income, a better quality of life and a sense of psychological well-being.” It is essential therefore to encourage property ownership for the majority of black people in our country to increase their buying power and stimulate economic growth, property ownership gives a feeling of pride and makes one feel valuable to society. It also creates stability in the country which means that it has a positive impact on both the individual and the nation. For many white people who were fortunate enough to have access to property ownership, they were able to amass generational wealth, and their children have in many cases gone on to become wealthy adults as a result of generation wealth. It is a fact that generational wealth definitely plays a role in enabling family members to follow their dreams.

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

Property ownership has always played a central part in this equation that allows families to leverage opportunities to create further wealth for themselves and their children. By contrast (historically) black people were not allowed to own property and as a result were not able to cultivate generational wealth to draw from when facing financial disruption. Which is one of the factors contributing towards what many refer to as black tax. Hernando de Soto Polar is a Peruvian economist known for his work on the informal economy and the importance of business and property rights. He believes that wealthy individuals who don’t realise that it is in their best interest to allow the productive power of the disadvantaged to be brought into the economy, are an obstacle to realising the full impact that property rights can have on those less advantaged. Rampant socioeconomic inequality weakens economies by increasing the burden on taxpayers. So, it is visibly apparent that by increasing ownership of assets through access to land and property we can easily diminish poverty and inequality and share prosperity, which will be for the betterment of our society and country. This issue of Transform Real Estate tackles the issue of inequality head-on, and from start to finish we give you valuable information on accumulating wealth through property and how to become involved in the property market, as well as real life stories of women who have come from different backgrounds and changed their lives through buying property.

HISTORY

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

NEWS

BUY-TO-LET HOW TO MAKE MONEY THROUGH PROPERTY INVESTMENT IN SOUTH AFRICA Francois Janse van Resnburg of Franmar Property consulting, and author of the book Making Money Through Buy-to-Let in South Africa, sits down with Transform Real Estate to speak about his experience, advise and tips for entering into the property investment market. Transform speaks to this expert for the inside scoop. According to Janse van Rensburg, his passion for entrepreneurship started at an early age: “I grew up in a small town and from a very young age I was very intrigued by people who are considered as being successful in life. I have also read a lot of biographies about successful people and love their stories of how they achieved success – Richard Branson, Steve Jobs, Elon Musk, Robert Kiyosaki to mention a few. I have also realized that they were ordinary people who had a dream and a vision and who became extraordinary.” He goes on to say: “After school, most youngsters have dreams of becoming successful and be financially free but, as soon as reality kicks in and they have to commit to responsibilities of a family, buying a home, medical aid, insurance premiums, those dreams start to fade and they lose focus. I was no different and realised that a job on its own will not allow me enough time and money to enjoy life to the fullest. I have also realised that working a 9-to-5 job wouldn’t provide me with a sustainable income after retirement.” It was in 2002 when Janse van Resnburg attended a property investment seminar that he clearly remembers one speaker talking about how the money you earn must work for you. “Immediately after the seminar, I started researching all the options. The ‘aha moment’ came when I realised that you can buy assets – buy-to-let property which can be utilised to generate a sustainable income for the rest of your life. I further discovered that you are actually using the bank and tenant’s money to pay for that asset which, once paid off will give you a constant inflation-linked income. My next step was to form a legal entity through which we bought our first property.” But what exactly is Buy-to-Let property, according to this expert? Buy-to-let is property, typically an apartment, you buy to rent out. There are a number of options when it comes to investing in residential property such as buy-and-flip, buy to renovate

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

and sell for a profit, buy low or from a distressed owner and sell high, buy and increase income potential, and rent out. I believe your risk with buy-to-let is much lower than all the other options. “I believe people are more informed and educated about property and the economy nowadays. Want-to-be investors are learning that they can get more than one home loan from a bank to buy additional property or properties. People also realised that the Government can’t provide for the housing shortage - especially in urban areas - and that the demand way exceeds the supply. In the current economic situation in South Africa, people have less disposable income to qualify for a home loan and the additional costs involved in owning their own home and therefore have to rent.” What are the benefits? Says Janse van Rensburg: “The number one benefit is that buy-to-let property, once paid off gives you an inflation-linked income for as long as you keep that property. “Another benefit is that you need very little of your own money to invest in property as a bank will be more than willing to give you a home loan to buy such a property and the tenant will pay that bond plus all the other expenses provided you have bought the right investment property. “The third biggest benefit to me is the fact that you can leverage the equity in property to buy more. It is important for any investor to be in control of your investment, therefore, investing in property gives you that control such as where to buy, when to buy, what price you want to offer, selecting your tenant, monthly rental amount and to make the rules. “Lastly, buy-to-let property provides you with time and money to plan a prosperous future and to leave a legacy for your family.”

NEWS

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NEWS

What to look out for/be careful of when starting out in the buy-to-let market? “Most new investors are so anxious when buying their first property that they sometimes pay too much for a property. A word of advice would be to practice patience and to look at as many properties as possible, keep a spreadsheet with all the details of each property, then short-list two or three properties and do the sums and the one which is making financial sense would be the best one at the best price. Ideally, a property which is cash flow positive is usually the best option”, advises Janse van Rensburg. “I think the best piece of advice would be to have a plan” he goes on to say. “Ask yourself why do you want to invest in buy-to-let and what would your objectives be and how will you achieve them. Different investors will have different reasons for investing in property such as paying for a child’s tertiary education, travel overseas, to be financially free or to provide for retirement.” You never stop learning “Through the years I’ve kept educating myself on property investment and I have also learned a lot from mistakes I have made. I believe no one can grow or become successful in life unless you have learned from your mistakes. I am so glad I made the decision 16 years ago to research the property 10

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investment opportunity as this gave me hope for the future and made my dreams come true.” Finally, he says: Buy-to-let property investment gave me the opportunity to retire early and live my passion to teach and mentor youngsters and other people in investing in property and most importantly to help ordinary people become extraordinary.” Just by reading and applying the easy-to-follow processes in Making Money Through Buy-to-Let in South Africa, you will realise that ordinary people can become extraordinary. This book explains why buy-to-let property investment is the only sensible opportunity to earn an inflation-linked, passive income for the rest of your life. It gives ordinary South Africans the hope that they might enjoy a financially secure retirement by building a substantial property portfolio, either when they start at a very young age or by supplementing their lifetime savings or pension pay-out at a later stage. Making Money Through Buy-to-Let in South Africa addresses all the questions would-be property investors would ask, including how to: establish legal entities; determine which properties have the best return on investment; leverage other people’s money and use very little of their own; obtain finance and register a bond; manage the transfer process; and select and manage the best tenants.

NEWS

Are you the next AWCI Homes Brand Partner?

Become part of an innovative Real Estate Agency which allows you the flexibility to grow whilst also developing your own flourishing Real Estate business. In conjunction with our AWCI Institute, AWCI Homes aims to give self-driven, experienced NQF 4 Real Estate Agents the support and training they need to obtain an NQF 5 qualification. Above and beyond the NQF 5 qualification AWCI Homes will help you set up your own Real Estate Agency giving you the opportunity to become a Brand Partner. For more information please visit www.awciproperty.co.za or alternatively contact info@awciproperty.co.za 011 243 5012

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

SPOTLIGHT

WHAT IS AFFORDABLE HOUSING? Affordable housing is an often-misunderstood term which for some includes everything from RDP housing and other government housing initiatives. Transform Real Estate magazine talks with Elizabeth Sangion and Cornell Klassen to get a better understanding of the term. The four affordable housing types found in government policy, local government developments and some of the national government frameworks around human settlements are: gap, transitional, social and inclusionary.

1. Gap housing: Housing subsidies and products provided by government and financial institutions to enable households with a monthly income of between R3 500 and R20 000 to purchase property.

Transitional housing: This is housing that is temporary afforded to individuals and households which helps them prepare to transition to more permanent options.

Social housing: This is described as statesubsidised rental housing for households with a monthly income of less than R15,000 that is developed and operated by an accredited social housing company or institution otherwise known as SHIs.

Inclusionary housing: This is housing developed by the private sector for a market that would not have had access to the development or the area within which the development takes place. Due to the national and local government’s lack of resources to tackle the country’s housing issues alone, one way that developers are able to contribute, whilst still ensuring the profitability of their projects, is through securing additional development rights from the city for free.

According to AWCI Homes, affordable housing is considered housing that is affordable to people earning R18 000 and above per month. These houses can also be described

using their sizes varying from 80 Sqm or less with the property value starting at R550 000. Although different industry players such as banks, policy makers, developers, Real Estate Agents etc. have different definitions for affordable housing, one common factor is that affordable housing should address the housing needs of the middle-income households. Elizabeth Sangion, Chairperson of AWCI Property says; affordable housing promotes economic vitality, whilst it also has enormous potential in addressing inequality through the asset component that home ownership offers. Through our Home Ownership education, we emphasize to first time home owners that their home not only provide shelter but that it is a critical component of their household wealth and a focus of most of their savings. Having identified the enormous need for affordable housing, Cornel Klassen of DVR Property Development has been involved in this market for more than 17 years and has built up a wealth of knowledge and experience. Recently having teamed up with AWCI Homes, he believes the recent increase in demand stems directly from the fact that this market is where the buying power lies. “In South Africa, not many people earn above R35 000 per month, so there is a very high demand to provide adequate housing and property ownership opportunities for families and individuals.” He goes on to say: “In today’s tough economic climate people are also looking for value for money from their property, where their home is situated with regards to schools, and where they work, how far they are from shops, and services and public transport routes. South TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

SPOTLIGHT

Africans across the board are concerned with security, by creating affordable housing opportunities that answer all these needs, we can answer the demand and make a big differenceâ&#x20AC;?. But why would someone take the leap and buy in this type of new development, rather than older more established neighbourhoods? Sangion says: Although one can buy second hand property that fits in the affordable price bracket of around R800 000, depending on the area, new developments offer brand new homes, and buyers can save a lot of money on transfer duties. There are also no nasty surprises like burst geysers, faulty electrics, plumbing and broken gutters as everything is new. These homes are also easier to secure, they have lower rates and taxes. You have peace of mind as you get five years of major structural defects warranty as well as a one-year roof leak warranty from a building contractor registered with the National Home Builders Registration Council (NHBRC).â&#x20AC;? She goes on to say that: If your plan is to buy this type of property for investment purposes, in order to maximize your profits through off-plan purchase, it is essential to buy early. Developers usually offer great deals at the start of a project and you need to take advantage of that. With steady growth in prices, your investment should also increase in value by the

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SPOTLIGHT

time the development is completed and also the first investors in a development have the opportunity to select the best properties and choice units. This way you will receive the highest capital appreciation in the shortest time. In addition, the best units command a higher rental income.”

and fittings that you will get and be aware of any clauses that allow the developer to use cheaper substitutes.

»»

A reputable developer will ask you to draw up a list of defects and submit it to them within a certain time frame so that they can be attended to.

Things to look out for when buying from a developer

»»

The land must be registered in the Seller’s name (being the developer),

»»

Developer must be registered with NHBRC;

»»

Buy from an established developer with a proven track record.

»»

Find out if the developer has completed other projects and check them out.

»»

Search online to check if the developer has had any bad press for work on other developments.

»»

The fixtures and fittings in the show house on the development may be different to those that you end up getting. Make sure that your contract specifies the fixtures

Some things to look for when drawing up a list of defects include:

»»

Straightness of the walls

»»

Taps, shower, bath and plumbing are in working order;

»»

Cupboards correctly installed;

»»

Hairline cracks in tiles and tiles neatly laid;

»»

Stove in working order;

»»

Silicon sealing in bathrooms and kitchen;

»»

Plugs in working order;

»»

Scratches, cracks or marks.

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GIRLS WITH PROPERTY

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GIRLS WITH PROPERTY

SECURING my FUTURE THROUGH PROPERTY Nano Shadung is a 26-year-old marketing coordinator for one of South Africa’s foremost casinos. If you ask her about herself, the first thing she will tell you proudly, is that she is the daughter of Michaeline Shadung, a single mother who worked tirelessly and selflessly as a domestic worker to provide a better life for her two daughters. Nano spent her formative years growing up in Alexandra Township. She says of her journey into buying property: “I grew up in a one roomed house in Alexandra and for many years I wanted a place my family could call home. But as I grew up I realised that buying a house is not only living up to my long life dream of providing a home for my family, but it also means I am creating a long term investment for myself.” Originally, she says, “I decided to enter the property market as a retirement plan or a backup plan should I find

myself unemployed. The plan then extended to wanting to buy multiple properties and then rent them out until all my properties are paid up but currently I just have one property so I am one step to the plan.” Nano took ownership of her first house in February of 2018, at the age of 25. And while she understands that owning property will eventually mean financial freedom, she says she has struggled to see the big picture at times. She even spent time saving for a deposit on her house, but ended up

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GIRLS WITH PROPERTY

needing to spend the money on some repairs and renovations to the house. As such she took a 100% home loan from the bank, but is doing everything she can to ensure her bond is paid off early. She says: “The initial plan when I bought my house was to pay what I can when I can over and above the required home loan amount, to pay off the bond faster, but with interest rate increasing it has made that impossible thus far, so I plan to take 50% of my bonus to put into the house to make up for all the months I could not pay the extra. I also am aware that when I pay extra it helps me with paying off my bond quicker and decreases the interest to the house so it’s something I’m looking into. She admits that monthly payments on a property may seem like a big commitment to a lot of people, and that she needs to sacrifice other luxuries at times, but says that the independence she knows owning such a large asset will bring her in the future, makes the sacrifices worth it.

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But what does independence look like to Nano? She elaborates: Independence, to me, means survival. It means I am able to provide for my family and myself without putting myself under financial strain. I watched my mother work hard to provide for us yet she was always under terrible financial strain, moving from one loan to the other trying to provide for us, while keeping a roof over our heads. Today my sister and I are who we are because of all the sacrifices she made for us, but for me my future financial independence will mean freedom from this same cycle. And what of her plans for the future? “The Plan is simple”, she says: “I want to pay up my current bond and buy another and another and another. I also wish I could also educate young women about the importance of buying property and the process. It was a very tricky one for me as I did not know how these things are done so I found myself not satisfied with the service my agent gave me”. Nano has since switched to AWCI Property as her preferred agents, and hopes to be able to buy her investment property in the near future.

GIRLS WITH PROPERTY

BECOMING AN

AIRBNB MOGAL

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GIRLS WITH PROPERTY

The house, in Brixton, was fully paid off, and an already established tenant in place. But very soon, Mthuthu decided she wanted to renovate and ‘flip’ the house. “I saved every Rand I could during this time and put everything into the renovation. By the time we put the house on the market, it was snatched up in an instant, and I started looking around for the next property I could sink my teeth into.” “When I first started looking for new properties to refurbish, I thought of my aunt’s apartment in Killarney. It was big and perfect for flipping, but the more I explored properties throughout the city, the more I felt like Joburg Central was growing faster and would be a better investment. “Using what I had saved from the sale of the Brixton house, I found my current apartment on auction and was able to snatch it up way below market value. This allowed me to spend some money on the refurbishment, including adding a second bedroom, and fixing it up as if I would want to live in it.” Shortly after wrapping up with this project Mthuthu put the apartment on the market, and while she had a lot of interested buyers, she found that on the whole due to the downturn in the market, banks were not approving bonds and loans. She went so far as to try and auction it again but wasn’t happy with the offers, and reluctantly opted instead to hold on to it. And what a good decision she made. Even though it cost her money, and she didn’t want to open up the property to full-time tenants, Mthuthu was advised to list the apartment on Airbnb.

Mthuthu Msibi is a worldly woman. She was born in exile in the USA in 1992, and her family returned to South Africa in 1994 after our first democratic elections, where she lived in Johannesburg. This is where you will find her today, where she’s taking strides to be Johannesburg’s next property mogul. Mthuthu, who is now based in the Gauteng, spent six years in Cape Town after finishing high school. During her time in the Mother City, she got her post-graduate degree in entrepreneurship, and charged with this entrepreneurial fervour started her own retail fashion business. Sadly, her business eventually had to close in 2016, which is when she left the Western Cape and settled in the City of Gold for good. “It was at this stage that I got into property, almost by accident”, says Mthuthu. “After closing my business, I was offered the opportunity to manage a property that had once belonged to my mother.”

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“I had to invest a little more into the property, by kitting it out with furniture and Wi-Fi, and I had to live in it for a while to understand what my guests might experience in terms of the little things like lighting and water pressure, but on the whole it sounded like the best option for earning money off my property, while keeping it listed.” The apartment has been on the booking platform ever since and is almost permanently occupied by everyone from tourists and travellers, to business people and overnighters. “So far the income that is generated via this model pays all the bills and allowing me some capital to put back into the property for further improvements so that I can get it listed on executive databases.” Mthuthu goes on to say: “Owning this property has so far provided me with a steady income while I’m able to explore other interests and avenues, all the while operating in an industry I am passionate about. So it allows me to grow my entrepreneurial ventures further.”

GIRLS WITH PROPERTY

“What I am really passionate about is entrepreneurship and as a child always thought the only way one could be an entrepreneur was to either be born into a trust fund, get outside investment, or do your entrepreneurial thing as a side-line gig.” “I was afforded a very special opportunity though, and had a chance to engage with Elizabeth Sangion, Chairperson of AWCI, and she advised me of all the options in the property sector, and how to create a property portfolio so that I wouldn’t need that side-line gig anymore. I now realise how misguided I was, and I recognise that I can use the property to pay bills and as collateral. My first business cost me dearly; this venture, so far, has a solid base and income stream.” She still goes to a lot of auctions, both public and private, just to see what is out there, to see what will and won’t work for Airbnb, and is steadily saving towards buying a second property. But Mthuthu admits what she actually has her eye on is buying an entire building in the future, that way turning herself from a small-time property owner into a bona fide mogul.

ABOUT THE AIRBNB MODEL Airbnb is an online marketplace which lets people rent out their properties or spare rooms to guests. You can rent a place to stay through Airbnb – or you can rent out your own home or apartment if you’d like to make some extra cash. Airbnb takes 3% commission of every booking from hosts, and between 6% and 12% from guests. According to one study by the platform in 2017 the typical Airbnb host in South Africa earns R28 000 a year by sharing their space for just 19 nights a year. There’s plenty of criteria to list for/search a property: from a shared room to an entire house, to having a swimming pool to having a washing machine. There are photos of the property, and the hosts/guests, with full map listing. It is simple to register and start advertising property by simply signing up at airbnb.com. Similarly, on a local front, investors can also sign up to afristay.com, which specialises in South African properties.

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

CONVERSATIONS

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

CONVERSATIONS

HOUSING FOR THE MISSING MIDDLE Transform Real Estate magazine had the opportunity to sit down with Nonhlanhla Buthelezi, Chief Director: Operational Policy Frameworks at the Department of Human Settlement.

According to Ms Buthelezi, “FLISP is an acronym for Finance Linked Individual Subsidy Programme, a financial intervention within the National Housing Code.” She goes on to explain that the Housing Code is a policy document and contains programmes that prescribe rules and guide how policies should be implemented. Ms Buthelezi tells us: “The programme was first implemented in 2006 after the approval of Breaking New Ground strategy which is officially known as the Comprehensive Strategy for the Delivery Of Sustainable Human Settlements. This was done after the government had conducted a clear diagnosis that confirmed that there was a missing middle which comprises beneficiaries that do not qualify for a full government subsidy. The programme has been amended twice to improve performance. The National Implementing agent has been allocated a role to administer FLISP for both mortgage and non-mortgage options.” She says “FLISP addresses this gap market, or the missing middle. The subsidy works as a down-payment assistance mechanism to reduce the principal loan amount which would ultimately reduce the monthly loan repayment instalments, rendering the loan affordable to a qualifying beneficiary.” “In previous iterations of FLISP, the rule was that beneficiaries first had to secure mortgage loan finance before the FLISP application can be launched. However, this has been changed to accommodate GEHS (Government Employee Housing Scheme, please see page xx for more info on this scheme) and non-mortgage options such as pension backed loans, housing loan facility, deed of sale option, incremental loans and stokvel options. The income threshold has been increased to R22 000.” But how many South Africans have benefitted from FLISP since its inception? “Since the inception of the FLISP Programme, the numbers of beneficiaries that have benefited have not been enormous, amounting to only about 10 000. Partly because the mortgage market has not performed well since the global financial crisis of 2008. We at DHS are, however, engaging with some stakeholders trying to find solutions. This includes workshops with the World Bank, National Treasury, NHFC, Provinces, Banks, GEHS, Pension Fund, Rural Development, RHLF, etc.”

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CONVERSATIONS

Figure 1: Graph This is also corroborated by information from the National Credit Regulator as analysed through work done by Illana Melzer & Claire Hayworth under 71point4

When asked about the FLISP mandate to the people of South Africa, Buthelezi responds: “FLISP is a housing subsidy that applies to all individuals that earn above R3500 up to R22 000. The people of SA must know that the government is concerned about the lack of economic growth, unemployment, poverty and inequality. The lack of real growth in the mortgage market is a problem.

She goes on to add, “FLISP is meant to improve the functioning of the property market by accelerating the delivery of housing in the so-called gap-market, in other words, the market where government does not build.”

“The government fully understands that the housing market is made up of both formal and informal market and both markets play a role in the economy and should not be underplayed or under-counted. Government has delivered opportunities to 4.5 million opportunities which have boosted the housing and property market. A house is an economic asset for wealth creation and is good for growing the economy.“

•

The purchasing of a vacant serviced residential stand, linked to a house-building contract which has NHBRC registered home-builders; or

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The building of a new home through a house building contract entered into with a contractor, registered with the NHBRC, on a serviced residential stand that is already owned by the beneficiary.

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The FLISP subsidy may be utilised for: • The purchasing of existing improved residential properties;

CONVERSATIONS

What are the key contributing factors that inspired the conceptualisation of the programme? “The White paper of 1994 crafted a strategy for housing and set a target of providing 1 million houses. This target was achieved and with the revised strategy for comprehensive housing development, there was a shift from housing to human settlements. Human settlements is a totality which made the sector to use systems theory and begin to make a special focus on the entire residential market.” Since the programme was implemented, what factors have changed over the years, and what were the factors behind the changes in policies and overall updating of the policies? •

The building costs and prize of a house - has led government to consider changes in the subsidy quantum applicable in FLISP. The Department works with the Bureau for Economic Research Building Cost index ( BER- BCI) which reflects an increase over the years and this is more or less 40%.

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The upper-income threshold of the qualifying criteria The Income threshold has been changed to R 22 000 in line with the Banks definition of affordable housing.

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The definition of affordable housing - Affordable refers to units in the gap, but affordable in other countries in-

cludes what government provides to the poor. The term is relative - what is affordable to me may not be affordable to you. A house worth R340 000 can be bought by someone earning R14500 per month. •

The upper threshold of BNG almost equivalent to Minimum Wage of R 3500

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The size of the mortgage market? It has declined over the years creating space for the non-mortgage options

So, do people know about the programme? “Judging from the unimpressive statistics of below 10 000 beneficiaries”, says Buthelezi, “Clearly we have not gotten the message out to the people. As a result NDHS and the implementing agent is embarking on a massive communication campaign to promote the programme, to make more people aware of it, and in so doing expand the programme.” She finishes of by saying: “The biggest problem facing potential beneficiaries is that a vast number of South Africans are heavily indebted and deemed as non-qualifiers because of an inability to get a mortgage loan from financial institutions. We are including education in this area into our consumer education campaigns, to teach people how to get out of bad debt, so that they can improve their circumstances.”

FOR YOUR INFORMATION Who can apply? »» Anyone who earns between 3500 - 22 000 and who have never owned a house. How can you qualify? »» Apply at a relevant Provincial Office or through the National Implementing Agent »» Approach the Bank for a mortgage application »» Submit the relevant documents for screening done by Provinces and the National Implementing Agent. What do I need to apply? »» ID »» Proof of Income »» Marriage certificate (if married) »» Birth Certificate or ID copies of dependents Once you have benefited from FLISP are there any “guidelines” or rules? »» You must pay your loan and treat it as an asset for wealth creation »» Guard against selling informally without valuation »» While the programme has been exempted from the provisions of the sale restriction clause, that governs other programmes like RDP, always consult the MEC regarding the exemption while the legislation is being amended.

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

CONVERSATIONS

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

CONVERSATIONS

RAP, FAMILY

& REAL ESTATE Cassper Nyovest- born Refiloe Phoolo, is a South African recording artist and record label owner, known for his legendary hits, his love for the finer things in life, and industry game-changing moves. Transform Real Estate had the pleasure of chatting with Cassper about music, family and real estate. Before the fame, there was just a young boy growing up in a town called Montshiwe in Mafikeng. He was one of three children namely; Thuto and Khutso who were all raised by Muzuki and Letsebela Phoolo, a teacher and school principal. His parents taught him life lessons that he continues to live by to this day. He commends his father for his contagious humility which influenced him to value and respect everyone he meets, while also showing gratitude towards his mother as she has always been very supportive of his dreams. Cassper’s life changed when he found his passion for rap at the age of 12. This happened just after he failed grade 10 and moved to his grandmother’s house in Potchefstroom. This move was later followed by a decision to drop out of high school at age 16: “I told my parents that I’d rather chase my dream, which I believe is going to work out, rather than keeping it safe and regret it my whole life.” Following his heart, in 2006 Cassper relocated to Johannesburg to pursue a career in music as a rapper. “I was signed to a label called Impact Sound under Thabiso Tsotetsi. That’s when HHP, always more like a brother to me saw me and we did a song Wamo Tseba Mtho,” says Cassper.

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CONVERSATIONS

But after two years of struggling in Johannesburg, he moved back home. “My grandmother gave me a mattress because I didn’t have anywhere to sleep, and it took a very long time for anything to happen.” He never gave up though, and after waiting it out for a while, he borrowed his sister’s last R100, to buy himself a return ticket to Johannesburg, and that was his turning point. Always a money-savvy man, the rapper started his own record label ,Family Tree, the same year he released his debut album, Tsholofelo. He says: “Artists get only eight percent of their record sales, it’s the industry standard, and 50 percent of their show money. I didn’t want that; I wanted 100 percent of everything.” Through this and other ventures, Cassper made history and broke many barriers by being the first South African artist to sell-out The Dome in Johannesburg without the help of an international act in 2015. In 2016 he pushed it further by attracting around 36 000 fans to Orlando Stadium in Soweto. And in 2017 he filled up the 5th largest stadium in the world, namely the FNB Stadium, selling nearly 70 000 tickets. He was the first South African hip-hop artist to achieve such a feat. His fans and peers who were in awe of this #FillUp movement crowned him ‘Abhuti fill up” and never ceased to congratulate and thank him for reminding them that dreams do come true. He says: “I think as South Africans we grew up in a system thinking we were second best and not worthy. The reason I do these shows is to change the mind of an African kid.” He will admit that after finally moving to Johannesburg for good, he spent years couch-surfing, and living with friends. This made buying his first property that more important. At the tender age of 25 in 2015, he purchased his first luxury home in Kyalami. However, Cassper took everyone by surprise when he announced the purchase of his R 10 Million house just two years later! When asked about his massive move into real estate, Cassper says he just wanted to make his mama proud and provide for his family the best way he knows how. In true Mufasa style, the house reportedly has a lot of rooms, a state-of-the-art studio, an entertainment area, a cigar lounge and four garages to house his well-known host of cars, from BMWs and Bentleys to a Rolls Royce. He goes on to say that owning a house means more than just showing off to his friends. He knows the true value and meaning behind it. “I came from very humble beginnings

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and having a roof over my head is a privilege that I don’t take for granted. I worked very hard to achieve the things I have, and while I enjoy the finer things in life as much as anyone else, I recognise the importance of providing my family with the safety, security and dignity that comes with home-ownership.” “Nothing is better than making my family proud. Buying this home for my family and me validates all the sleepless nights I have had, and all the sacrifices they have made for me. All I ever want to do is impress them,” he continued. With a property portfolio now totalling more than R 10.5 million, Cassper says “While fancy cars, watches and clothes say a lot about the way we portray ourselves and our wealth, property is the only surest way to build generational wealth. I am glad that I am able to live this life and give this to my family.” Finally, he says: “I believe in following your dreams. And while I don’t advise telling kids to drop out of school like I did to follow my dreams, I will say never give up on yours, and do what is necessary to make it come true.”

CONVERSATIONS

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

CONVERSATIONS

THE INS & OUTS OF REAL ESTATE Penny Mboyi, the eldest of four children, grew up during the 1960s in Kwa Thema in the East Rand of Gauteng. Gwynedd Peters sat down with Penny to find out how she transitioned from teaching to banking, and finally settling down as the principal of her own estate agency with AWCI Homes.

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

CONVERSATIONS

to navigate the business quite easily. The job required an eye for quality and attention to detail. You need to know your facts to give sound advice. Know where to refer your clients if there is something that needs to be done in the process. Be patient, a good negotiator, listener and facilitator, especially with people living in the townships or when dealing with family houses – you have to be a master in conflict resolution too.” “Passion must drive you. Your clients will be your best advertisement. Understanding people makes the job easy. Most importantly I would say network with other agents and Principles, join organisations to stay abreast of the industry, and be an active part of a group,” she insists. Penny says: “Transformation is slow in the industry, especially for black women, but organisations such as AWCI Property and the EAAB have come up with programmes for new recruits and interns to try and increase the number of black practitioners in the industry.”

Penny’s life before Real Estate is an inspiring journey, which saw her give-up teaching only six months after her career begun, “my parents encouraged me to attain a diploma in education because they believed it would give me job security however due to the lack of a steady income and hefty transport bills, I knew I had to make a change” a decision which was later followed by a move into the banking sector. Penny joined Standard Bank in Springs in 1981 making her one of the first black woman to join the group and be placed in a career development programme. After 16 years of serving in different sectors for two of the major banks, her involvement in housing happened when she joined NURCHA (National Urban Reconstruction and Housing Agency) an NGO that worked closely with the Department of Human Settlements in running projects and tenders awarded to contractors for housing and development of schools etc. After working in the housing industry, and while studying towards her MBA in 2012 Penny took a leap of faith and registered a Real Estate Agency. Says Penny: “I knew that I had banking and business experience, and had advanced people skills. The only thing I didn’t have is knowledge of the housing price and evaluation market. But I buckled down and eventually learnt what I needed to know and applied for my Real Estate license. Thanks to my qualifications, and business experience I got my Principalship immediately after applying for the Real Estate business.” Penny started advertising immediately, and says she enjoyed every minute of it. “I learned a lot very quickly, and was able

“I believe internships and in-house training programmes are the key to successful transformation. Through these learning opportunities new recruits are able to gain knowledge about business, customer relations and the industry at large. And while transformation may not be as quick as we would like, companies like AWCI Property continue to empower women, through the encouragement of entrepreneurial spirit, producing a number of qualified principals.” Penny says she has encountered many myths since starting her journey in the Real Estate industry. She says: “A lot of education needs to take place in the black community, as people still prefer to rent rather than buy. I believe this mindset needs to change. I believe, if you can afford to rent, you can afford to buy your own home. Doing this creates financial stability, and allows you the opportunity to grow your property portfolio.” “Another myth is that people think they don’t qualify for RDP houses, so there is no hope for them. They are unaware of the various government subsidy programmes that are available. Being able to buy your own home with the help of a subsidy means you are able to contribute to your own wealth.” Penny’s final words of advice: “For potential homeowners buy smart, based on location, size and facilities best suited to you and your family. For agents, get into a mentoring programme and learn from experienced agents and Principals. “Take every opportunity that comes your way, and don’t be scared to try something new. Embrace the entrepreneurial spirit that comes with Real Estate, and break away from the idea that you have to study something that guarantees you a fixed job and fixed income. Dare to dream big, and experience being your own boss.” TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

LEGAL

TOP 10

FREQUENTLY ASKED QUESTIONS

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LEGAL

WHAT 1ST TIME BUYERS SHOULD KNOW Buying a home for the first time can be a scary process, especially if you have no idea of what the process entails. Here are just the top 10 steps that every prospective home-owner should prepare themselves for. 1: What is the point of saving for a deposit if I intend on loaning money from the bank? It is always a good idea to start saving for a deposit before you plan on applying for a home loan. Considering the current economic situation, and rules set in place by various banks, first-time home-buyers are rarely given a bond for the full value of the home they want to buy, and in some cases are granted as 60% of the purchase price. The bigger the deposit you can put down, the better your chances for a higher loan value.

Also, consider the location with regards to the distance to work, schools, etc. Make sure to ask about the rates and taxes, levies and other expenses that may be associated with the property.

2: Budget You need to draw up a comprehensive household budget so that you can accurately know how much you can afford monthly for home loan repayments. This kind of budget analysis needs to include everything from school fees and clothing account repayments to groceries and cell phone contract/airtime fees.

7: What is the offer-to-purchase? Once you are ready to buy, you will have to sign an offer to purchase. This is a contract between yourself and the seller. Make sure you understand everything that you are agreeing to in the contract, and do not feel pressured to sign it if you are unsure about anything. You have every right to ask someone with knowledge in the field or someone you trust to look it over before you agree to sign.

3: Why is my financial institution asking about my credit score? You should contact the local credit bureau for a copy of your credit report. If there are outstanding debts or other issues that need to be corrected, it is a good idea to sort it out before you apply for a home loan. If you know that there are some black marks on your credit record, and you have been making an effort to rectify them, let your bank know what they are, and what you are doing about them. The bank needs to be sure that you can be trusted to pay back your home loan, and if you have had unexpected circumstances that lead to a blemish on your credit report, its essential for the bank to understand that it is a once-off occurrence.

6: Be prepared to ask questions Make a list of questions you would like to ask the estate agent before viewing a property, that way if there is anything on the list he/she doesn’t address you can be reminded of what you want to know.

8: Time to apply for a home loan If you have already been pre-approved by your financial institution, this process is far simpler, and the bank will already have run all the checks and balances ahead of time. Which means that all you will need to do is formally apply in writing. If not, you will need to apply for a home loan at this time. Once you have completed the application, your bank will do all the necessary credit checks and feasibility assessments to find out if you qualify.

4: What is pre-approval? AWCI Homeloans can assist individuals with finding out how much they qualify for. Get in touch and a home loan consultant will assist you. Getting pre-approved means that your bank has already checked your tax and credit score, and cleared to for purchase. This will allow you to stand out from other potential buyers when making an offer on a property.

9: Why do we need to engage with an attorney? While it may seems to a first time buyer that “paying” for the house means that it is yours, there are a lot of other steps that need to be taken after the bank approves your loan. A conveyancing attorney will register your home loan and aid in the transfer of the property into your name. The attorneys will further make sure that the previous owner of the property gets paid, and then the new home is all yours.

5: Why should I ask questions about the area I want to live in? It’s always a good idea to do a bit of research before house-hunting. Consider your personal needs with regards to size, security, accessibility to the highway, whether it is pet-friendly, and its proximity to shops and malls, or even future developments.

10: What does my tax record have to do with it? Make sure all your tax is in order. It is advised that you check with SARS, to ensure that your filings etc. are up to date. Your potential property cannot be registered in your name if you have any outstanding SARS matters.

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LEGAL

HOUSING SUBSIDIES DO YOU QUALIFY?

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LEGAL

Buying a home is hands-down one of the soundest investments you can make for your family. It means future financial freedom, a safe place to raise your family and make memories, and at the end of a long day, it’s a place you can call your own. Did you know that as an employee of the South African Government, such a dream could be that much easier to achieve? The Government Employees Housing Scheme (GEHS) is an employee benefit scheme that offers housing access support services and subsidies to government employees. But who can apply for this subsidy, how do you apply and how much do you qualify for? “The housing subsidy programme caters to all persons employed in the public service in National and Provincial Departments,” says Rhoda Grootboom from AWCI Homeloans. “Each bank has its own lending criteria, but they definitely have minimum monthly income requirements.” She goes on to explain that this may mean that individuals working in public service might still be excluded from getting a home loan if they cannot prove to lenders that they can make the repayments. For many, a housing subsidy, and state guarantee is the difference between qualifying for a home loan. How much is the Housing Allowance? Through the GEHS, the housing allowance is paid as a monthly contribution to qualifying employees to assist with their housing costs, whether they own their home, are buying a home or rent. GEHS Housing Allowance for Homeowners: State employees who are home-owners and have submitted proof of Title Deed or a Permission to Occupy (PTO) certificate are eligible to receive the housing allowance of R 1 336.22 per month (as of July 2018). The same amount applies if you are planning to buy a house, or in the process of doing so, however, the subsidy will only become available to you upon registration of your property.

ployee’s individual-linked savings facility in the Government Employees Housing Scheme. What is the Individual Linked Savings Facility? The individual-linked savings facility is a forced savings account that can only be accessed to buy a house, building one, and/or improving a home you intend on buying. Added benefits When buying a house, you are often required to pay a deposit. But what if you don’t have the money for such a deposit? You could access the State Guarantee Scheme, which seeks to promote home ownership by obtaining a 100% home loan/bond. In this case, the State (Minister of Finance) guarantees a maximum 20% of your loan/bond. This kind of guarantee is only issued to financial institutions that have agreements with the State. How to Access the Housing Allowance? Employees must contact the Human Resource division in their respective departments in order to access the housing allowance. Employees must first enrol with GEHS to access any and all services offered by the scheme. Purpose of enrolment: Employees enrolled with the scheme are profiled for purposes of accurate advice and housing access support. How do I enrol? Employees can enrol online www.gehs.co.za or call the call centre at 0861 12 34 34 Background to the GEHS In addition to Government Pension Fund (GEPF) and Government Medical Aid Scheme (GEMS), the State as employer administers an employee housing assistance scheme (GEHS) to ensure that employees have access to adequate housing on a sustainable basis. Government and Organised Labour concluded a collective agreement to establish a Government Employees Housing Scheme (GEHS) with the following objectives:

Q: Will I qualify for the full housing allowance if my house/ bond is fully paid off?

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A: Yes, subject to submitting the required proof of ownership and enrolment with GEHS

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What if I don’t own a home, but rent one? Employees who rent their homes must supply proof of rental occupancy, and will then receive the housing allowance of R 900 per month as part of their salary. The difference in value, an amount of R 436.22 per month (i.e. the difference between R 1336.22 and R900) will be paid into the em-

• • •

To support, educate and advise employees on housing options and opportunities. To enhance employees access to affordable housing. To promote home ownership and facilitate asset security among employees. To assist employees to access affordable housing loans and finance. To assist employees to rent houses with a view to buy and own homes. And to provide transitional arrangements towards the GEHS. TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

STORIES

CIVIL SERVANT NOW HOMEOWNER Bontle wasn’t born in Johannesburg, but for as long as she can remember she has had dreams of the big city life. After marrying her husband, and qualifying as a nurse, they made the decision together to head to the City of Gold, and have since settled in Cosmo City. When Bontle first came into contact with Lona from AWCI Homes, she was nowhere near wrapping her head around buying a home. She knew she had a bit of outstanding debt to her name and was sure that she would need a significant deposit before she could ever be considered. Nevertheless, Lona helped her get in touch with AWCI Homeloans to find out what she might qualify for. Armed with this information, she took a leap of faith and got pre-qualified with AWCI. She soon got her husband involved as well, so that they might be eligible for a larger loan. According to Bontle: “When we first met with our agent, she never once questioned their financial ability to buy a house. She spoke only in positives such as ‘What type of house are you looking for, and in what area do you want to buy?’ She was the one who strongly advised us to get pre-qualified before we started looking; the best part about that process was that by the time we started looking around, Lona had already identified new developments that we knew we could afford.” The first time she set foot in what is now her house she knew she wanted to live there. Inside and out it spoke to her, but it was on the market for R 800k, while Bontle and her husband were only pre-qualified for R650k. At the time they didn’t even have a deposit to put down, but the AWCI team kept urging them to go back to the banks, and also set out to negotiate with the developer on their behalf. To their surprise, the bank came back with a qualification of R750 000. This offer was then taken to the seller and accepted. Bontle and her husband would now become first-time home-owners. “Most people don’t understand that you can buy a house without any deposit or down-payment,” says Bontle. “I also never thought I would be able to buy my own home without saving for a very long time. All around me, due to lack of knowledge, people ask me how it is possible. I’m happy to 36

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be able to help my friends and family and arm them with the knowledge I have now amassed. We now refer all our friends and family to AWCI because of everything they were able to do for us.” The next step, however, is applying for the Government Employees Housing Scheme subsidy – which every government employee qualifies for - to take even more pressure off her monthly repayments. (See page xx for a detailed explanation for just what the subsidy is and how to enrol). She says owning property makes her very happy, even though when the house came along she wasn’t really thinking about it; but today it feels like a miracle because she and her husband never once thought it was something they could afford, let alone even dream of. “It’s someplace to call my own. It feels stress-free”. As for the future she says, as soon as their home loan has been paid off a bit more, they want to invest in additional property to rent to others, so growing their wealth through property. As it is, soon after moving in, Bontle and her husband decided to let their investment work for them and built two free-standing rooms on the property. They now have four tenants who each contribute to paying their bond every month. The team at AWCI has advised her on how to manage tenants at her existing property, and today the property she never thought she could afford is paying for itself. “All we are paying is water”, she says, “in future, we will be able to do the same thing with an additional property.” Like Bontle many people don’t know how much they qualify for which makes them shy away from starting the home ownership journey, but once they know how much they can buy for their whole view changes. For a free homeloan prequalification please email your name and contact details to info@awciproperty.co.za

STORIES

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LEGAL

BREAKING DOWN THE HOUSE Understanding the impact of customary marriage on estate planning, inheritance and property ownership. Bibi Smit, Director in Conveyancing of TGR Attorneys, unpacks the topic for Transform.

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LEGAL

The recent flood of reaction pursuing the judgement in favour of Lerato Sengadi, when she sought to be recognised as the rightful wife of Jabulani ‘HHP’ Tsambo in terms of customary law, is proof of the uncertainty which still exists in understanding the effects of customary marriages nearly 20 years after the coming into operation of the Customary Marriages Act 120 of 1998 (“the Act”). Due to this lack of knowledge, it is mostly the women in these marriages who get the shortest end of the stick, when the marriage ends, and it is therefore imperative for parties entering into a customary marriage to understand the legal implications of such a marriage before the process is started. Even though the Act is quite clear as to what constitutes a valid customary marriage, the process which precedes these marriages, being the “lobola ceremony” could be open to a difference of interpretation. This is mainly due to the diversity of the various ethnic groups and often a dispute arises as to which customary procedure takes precedence over the other. Which could lead to the customary marriage not being recognised by one of the parties. The following definitions contained in section 1 of the Act, needs to be highlighted in order to explain a few of the important elements of the Act: “customary law” means the customs and usages traditionally observed among the indigenous African peoples of South Africa and which form part of the culture of those peoples; “customary marriage” means a marriage concluded in accordance with customary law; “lobola” means the property in cash or in kind, whether known as lobola, bogadi, bohadi, xuma, lumalo, thaka, ikhazi, magadi, emabheka or by any other name, which a prospective husband or the head of his family undertakes to give to the head of the prospective wife’s family in consideration of a customary marriage. In terms of section 3(1) of the Act, for a customary marriage entered into after the commencement of this Act to be valid – (a)

the prospective spouses –

(i) must both be above the age of 18 years; and (ii) must both consent to be married to each other under customary law, and (b) the marriage must be negotiated and entered into or celebrated in accordance with customary law.

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

LEGAL

In terms of section 4(1) of the Act, the spouses of a customary marriage have a duty to ensure that their marriage is registered, however section 4(9) states that failure to register a customary marriage does not affect the validity of that marriage. In terms of section 7(2) a customary marriage entered into after the commencement of this Act in which a spouse is not a partner in any other existing customary marriage, is a marriage in community of property and of profit and loss between the spouses, unless such consequences are specifically excluded by the spouses in an antenuptial contract which regulates the matrimonial property system of their marriage. And it is in this section 7(2) that the crux of the matter lies. A couple planning to enter into a customary marriage should be very careful not to start the customary marriage process until such time as they have made an appointment with a notary who will explain the effects of being married in community of property, or out of community of property with or without accrual. Should a valid antenuptial contract not be entered into by the parties and registered within the required timeframes, by the notary, the marriage will be one of in community and as such the spouses will have a joint estate which could have dire consequences for the spouses in the event of insolvency of one of the spouses, for example. Spouses married in community of property can only register immovable property and a mortgage bond in the joint estate, while spouses married out of community of property can register immovable property in their own names or in both their names, as they wish.

TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

Section 8(1) states that a customary marriage may only be dissolved by a court by a decree of divorce on the ground of the irretrievable breakdown of the marriage. Should the marriage be dissolved by divorce, the spouses will be able to enter into a settlement agreement before the granting of the divorce, as any legally married spouses would have the right to do. Upon death of either of the spouses the marriage would be dissolved and the effect will be that the surviving spouse will have all the legal the rights of a legal spouse in that they will be able to inherit testate or intestate, as the case may be. The above do not even touch on the implications of polygamous customary marriages entered into by either of the parties, which ads a whole new dimension to this discussion, and is a topic for another time. I once read that all relationships have an expiry date and believe that a marriage should be entered into with caution and not until such time as the prospective spouses took the time to ascertain exactly what the implications of the various marriage regimes will be on their lives as a married couple, but also if the marriage ends for whatever reason. Knowledge is power and spending a bit of time and money beforehand could save you a lot of money and hardship later and I therefore recommend that intended spouses contact a Notary practising at a reputable law firm to set up an appointment and gain as much information as possible before taking one of the biggest steps in their lives.

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TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019

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TRANSFORM MAGAZINE / ISSUE NO. 2 / 2019