Property Professional Mar/Apr 2017

MAR/APR 2017

THE SOUTH AFRICAN PROPERTY INDUSTRY MAGAZINE

4

REAL ESTATE

I N T E RV IE W

BILL RAWSON ON WHY AGENTS SHOULD PRIORITISE MAKING MONEY

TERMS TO KNOW

DE B AT E :

LIFE RIGHT OR SECTIONAL TITLE

?

IS THE COMMUNITY SCHEMES

OMBUD SERVICE ACT

PROVIDING VALUE?

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2017/02/21 3:51 PM

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INDUSTRY NEWS

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or the most part, residential property took a knock in 2016, ending with a downward trend. Are there signs of a reversal? Turn to page 24, where financial experts offer input. Then read on to see how agents can play their part.

In our cover story, Bill Rawson’s mantra is: live on half your income; invest the other half. He says savvy agents who are not using their expertise to also become good property investors should ask themselves why.

Sungula Nkabinde explores how the recent Community Schemes Ombud Service Act has impacted property owners and whether it is providing value. See page 16 for a report back about what qualifies as legitimate complaints.

Retirement is always a hot topic as the squeeze on available accommodation increases. BBM Attorneys’ director Marina Constas explains why it is essential for your clients to understand the difference between life right and sectional title (page 31) when making this important investment.

The Property24 buy-out of rival Private Property is still ruffling industry feathers.

Read some comments on page 11. Then add your voice to the online debate at propertyprofessional.co.za or sign up for our e-newsletter by clicking on the newsletter tab.

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TOOLS OF THE TRADE

Catherine Davis PUBLISHED BY THE CREATIVE GROUP 6 Beach Road, Old Castle Brewery, Woodstock 7925 087 828 0423 facebook.com/PropertyProfessional twitter.com/Property_Prof

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ARE YOU UP TO SPEED WITH GLOBAL REAL ESTATE TRENDS? FEEDBACK ON THE COMMUNITY SCHEMES OMBUD SERVICE ACT

20 16

BILL RAWSON ON SKILLS, INVESTING AND MAKING MONEY

Will the residential property market pick up in 2017?

32

Why your professional conduct is so important

THE CREATIVE GROUP MANAGING DIRECTOR Terence Hewitt terence.hewitt@thecreativegroup.info Editor Kim Maxwell Content business manager Catherine Davis Creative director Leah de Jager Copy editor Kirsty Wilkins Group digital editor Lauren Joubert

ADVERTISING Sales and Marketing Manager Michèle Jones michele.jones@thecreativegroup.info 084 246 8105 Advertising, production and subscriptions Jackie Maritz jackie.maritz@thecreativegoup.info Printing Paarl Media | Disclaimer: the publisher of this magazine gives no warranties, guarantees or assurances and makes no representation regarding goods or services advertised within. Information correct at time of printing. © Copyright The Creative Group. All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from the publisher. The publisher is not responsible for unsolicited material.

21/02/2017 06:36

LOCAL NEWS

LOCAL INDUSTRY NEWS

This building is set to transform the Cape Town city skyline Stuart Chait, executive chairman, Land Equity

02

TALLEST SKYSCRAPER FOR CAPE TOWN? Work is scheduled to start on the soon-to-be tallest building in Cape Town in April.

Old Mutual Centre and Exchange Place, on the corner of Adderley and Strand streets, was recently bought by property developer Land Equity Group, and will be redeveloped into the 44,000m2 tower.

Costing R1.5bn, it will have 44 storeys comprising 624 flats, 760 parking bays, retail space of 5,000m2, a 360° viewing deck and restaurant at roof level. FWJK is the co-developer. It is expected to take 30 months to complete, and 60% is already sold out.

Says Stuart Chait, executive chairman of Land Equity: “This building is set to transform the Cape Town city skyline. Once complete, it will mean that Cape Town finally features in the ‘top 10 tallest buildings in South Africa’.

“The CBD is highly sought-after by investors and tenants. Statistics continue to show that both buyers and tenants are prepared to sacrifice bigger homes or apartments in outlying suburbs, in exchange for the convenient and urban lifestyle the city has to offer. There are already at least a dozen new high-rise buildings in development in the CBD, with many more on the drawing board for 2017.”

Land Equity is planning to invest R4bn in new developments in the City Bowl this year alone.

Says Chait: “Buyers and investors are able to get the tax benefit of the UDZ allowance, which makes their investment highly attractive.”

PROPERTYPROFESSIONAL.CO.ZA

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2017/02/22 10:12 AM

South Africa’s fastest growing property website.

43%

NUMBER OF LEADS

INCREASE

4 bed house in Umhlanga Rocks

R 5 300 000

63A ZYSTORN-ON-TRENT AVENUE

AGENT ON THIS PROPERTY

Bryan Lawson Estate Agent

Call Agent

JAN 2016

JAN 2017

* Based on sales leads delivered, January 2016 vs January 2017

Generate more leads on Private Property.

A home for everyone w w w. p r i va te p ro p e r t y.c o.za

LOCAL NEWS

Ask the expert: tiling trends THE WORLD METEOROLOGICAL ORGANISATION ANNOUNCED THAT 2016 WAS THE HOTTEST YEAR ON RECORD

B All signs point to green building gaining even greater momentum in this country.

The reason for this is simple.

Green building has proven to be a good business decision.

So far, 230-plus formal green building certifications have been achieved Dorah Modise, CEO, Green Building Council South Africa

04

eautiful design is all about the details.

Slick tiling can transform any area into a beautiful setting, in the process adding value to a home. Retail display manager of Tile Africa Liza Watermeyer says that the finer details are appealing because they allow for the creation of individual, bespoke looks in a home or workplace. These are four tiling trends: OUTDOOR AREAS

Natural stone and stone-, cement- and woodlook tiles are key trends. Porcelain products can withstand weather variations. Slip-resistant tiles are a must.

BATHROOMS

Bathrooms are featuring interesting combinations of field tiles (larger, usually floor tiles) mixed with smaller options and big patterns. The future is all about texture:

mosaic, 3D, prints, patterns or metallic foil details. Colours are getting darker with brown and black featured across all styles.

KITCHENS

Glazed ceramics such as metro and brickshaped tiles in interesting materials – glass, cement, wood, stone – add versatility to kitchen aesthetics, whether futuristic, vintage, industrial or naturally beautiful. With the lines blurred between the living room and kitchen, fittings and furnishings need to be agile.

LIVING ROOMS

Large format (1,200mm by 600mm), rectangle porcelain tiles are a popular floor application.

Other formats to consider are 600mm by 600mm and 800mm by 800mm in matt, gloss and lapatto surfaces. Mix looks and sizes with marble, cement, stone and wood-look planks.

PROPERTYPROFESSIONAL.CO.ZA

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21/02/2017 06:48

BLHL ID ADVERT PRINT READY AD1 CURVES.pdf 1 2017/02/21 2:46:54 PM

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LOCAL NEWS

UNDER THE HAMMER

NATIONAL HOUSE PRICE INFLATION In early 2016, Lightstone Property forecast that nominal house price inflation would end at about 3.5%, resulting in real deflation of residential home values.

Their prediction came close:

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HOUSE PRICE INFLATION FOR THE YEAR ENDED AT 3.38% The property information company attributed the figure to a “lower than expected GDP figure”.

Source: Lightstone Property

National inflation 40%

3% 3%

30%

2%

20%

1% 10%

1% 0%

0% -1% -10%

-1% April August December April August December April August December April August December April August December April August December April August December April August December April August December April August December April August December April August December April August December April August December April August December April August December April August December

Annual inflation

2% Monthly inflation

off van Reenen is director and lead auctioneer for The High Street Auction Co, one of few property-specific auction houses in South Africa. He says a streak of lunacy is necessary to do his job.

“And if you don’t have it, get it fast.”

The High Street Auction Co’s R96m Clifton sale in November 2016 set a record for the highest South African residential property auction. “Never underestimate the power of the local market. Despite a global campaign, it went to a local buyer who saw the advert on a bus stop while walking the dog,” says Van Reenen. Clare Weise, founder of jewellery brand Paka Paka and daughter of businessman Christo Weise, bought the Nettleton Ridge luxury villa.

Van Reenen’s experience auctioning the former Kyalami Grand Prix racetrack at R205m in July 2014 also set new records. In 116 seconds he took the highest bid on a single property in South Africa from a local.

Concludes Van Reenen: “Like any profession, you have to specialise.

The warehouse stocked with cars and paintings is long gone.”

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22/02/2017 08:47

WHAT’S ON

All you need to know to stay plugged in to the property industry in South Africa

MARCH

11, 18, 25 21

iming to attract first-time buyers? Be at the Property Buyer Show, a new platform designed to increase interaction in the residential property sector. It targets property professionals and developers, potential home owners and investors. The idea is to make the property buying process easier for those new to the market, with informative seminars in the line-up.

Who should exhibit? Businesses involved in financial services (banks, bond originators), property providers (estate agents, portals) and other services linked to property (insurance companies, inspection agencies), according to event director Richard Stubbs. “We also have a range of sponsorship packaged for companies who would like to partner with us at the show,” says Stubbs.

The exhibition allows access to a new market of interested people.

Says Stubbs: “The visitor experience will include opportunities to discuss affordability and interact with the lenders, see new developments and agent listings, compare prices, understand rental returns and make decisions about their purchase.”

8-9 April, Cape Town International Convention Centre.

For sponsorship and exhibition queries, call Stephan Herman on 021 700 3598 or e-mail stephan.herman@spintelligent.com.

COMMUNITY SCHEMES WORKSHOP WHERE BBM Attorneys, Houghton CONTACT bit.ly/2jaPh7G

WHAT NON-VERIFABLE CPD WORKSHOP FOR AGENTS AND PRINCIPALS WHERE MCademy, Centurion CONTACT bit.ly/2gasC9p

APRIL

6 8-9

WHAT SACSC RETAIL IMMERSION PROGRAMME (WORKSHOP 2) WHERE Gateway Hotel, Umhlanga CONTACT bit.ly/2iSDwj5

WHAT PROPERTY BUYER SHOW WHERE CTICC, Cape Town CONTACT bit.ly/2jMirXP

MAY

10-13 25

WHAT IEASA REAL ESTATE INDUCTION COURSE WHERE Howard Studios, Pinelands, Cape Town CONTACT bit.ly/2iKRTZM

WHAT CFO PUBLIC FINANCE EVENT WHERE Bloemfontein CONTACT bit.ly/2ienuza

Add to your diary now SAPOA’S ANNUAL CONVENTION AND PROPERTY EXHIBITION is coming up from 20-22 June at the

Cape Town International Convention Centre, with early bird registration ending on 31 March. The theme this year is disruption: discussions will revolve around the impact of technology on the property industry and the need for change in how it’s used. Social events include a golf day at Atlantic Beach Golf Estate and a gala dinner. sapoaconvention.co.za

MARCH/APRIL 2017

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IMAGES: iSTOCK BY GETTY IMAGES, SUPPLIED

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Increase your client database at Cape Town’s first Property Buyer Show

WHAT CAPPUCCINO, CAKE AND

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2017/02/22 10:13 AM

TOOLS OF THE TRADE

4

GOODIES AND GADGETS FOR WHEN YOU’RE ON THE GO RYAN SCOTT

Optimise the time spent at your desk with these product ideas

BOOM TASK LIGHT

AIRVAX AIR PURIFIER

YOU NEED IT BECAUSE To read handwritten and printed documents clearly, more focused light is required. Ergonomically efficient task lighting can cut out glare and shadows, and reduce eye fatigue and headaches.

THE NITTY GRITTY The Boom Task Light is engineered to direct light precisely where it needs to shine.

X-FACTOR Aside from its functionality, this 12cm by 41.2cm desk light – available in either black or aluminium – is the ideal addition to a minimalist office space.

R4,352; cremadesign.co.za

YOU NEED IT BECAUSE The likes of dust, mould, bacteria and tobacco smoke can affect your physical wellbeing. To limit your exposure as much as possible, enhance your office space with purified air.

THE NITTY GRITTY This Airvax Air Purifier is effective over a space of 25m2. It can remove particles as small as 0.1 micrometres from the air.

X-FACTOR It’s quiet, the design fits any office space and you only need to replace the filter every three years.

R4,250; solencosa.co.za

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PROPERTYPROFESSIONAL.CO.ZA

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21/02/2017 12:14

JUMBO DESKSTAND YOU NEED IT BECAUSE A strained neck, back pain and joint compression can be avoided with better circulation and posture. This sit-stand work station is beneficial to circulation and improved muscular activity.

THE NITTY GRITTY The easy-toassemble desk is adjustable to 10 height options and includes two shelves so you can make use of split screens. It also has special slots to keep your phone or tablet upright, in reach and visible.

X-FACTOR Delivery is free and includes a DVD to guide you. It’s recommended that you use the standing desk for up to an hour at a time in the beginning and ultimately, for four hours a day.

Endorsed by chiropractors, it's the perfect solution for agents who don't spend all day at a desk.

R2,695; deskstand.co.za

IMAGES: SUPPLIED

SPEKBOOM

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YOU NEED IT BECAUSE The benefits of plants in your workspace should not be underestimated. These include stress reduction, increased productivity and cleaner air.

THE NITTY GRITTY The Spekboom’s ability to convert C02 into oxygen is 10 times higher than subtropical rainforests. So it makes sense to bring this workhorse into the work environment. Remember that it needs some natural light.

X-FACTOR The succulent’s pretty leaves are also edible – so you can add them to your lunchtime salad if you really want to.

R29 – R299; lifestyle.co.za (Johannesburg), stodels.com (Cape Town), bloomingdalesdurbannorth.co.za (Durban)

21/02/2017 12:15

property professional.indd 2

2017/02/21 2:58:44 PM

THE ONLINE DEAL EVERYONE’S TALKING ABOUT Estate agents should take back ownership of their listings and promote their own websites, where they can use their own brand image to best advantage Nick

In November 2016, Property24 announced that it would be buying out rival Private Property.

Here’s how the industry is reacting on property professional.co.za

Monopoly is never a good thing and is short-sighted in the long run Janet It is time the real estate industry created their own portal, owned and controlled by the industry Wade If we all stop advertising with them, they have no business Anonymous If the prices go up, how and where will we advertise our stock? We already find the pricing exorbitant Loren facebook.com/PropertyProfessional

CONTINUE THE CONVERSATION ONLINE

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twitter.com/Property_Prof

Sign up for the newsletter • Visit propertyprofessional.co.za • Click on the newsletter tab

21/02/2017 12:04

I N T E R N AT I O N A L N E W S

4

real estate trends to know

1

KIM MAXWELL

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3

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SURBAN

GEN Z

IMPROVED HOMES

DRONES

The term is surban, t h e t re n d a m ove towards an integrated neighbourhood offering a variety of housing types (flats, townhouses, freestanding homes).

These areas effectively blend urban with suburban.

“Existing suburban neighbourhoods are adding urban amenities so that there’s an environment where people can live, work and play right outside of the core part of the city,” says US real estate executive Peter Burley.

This year, Generation Z forerunners are turning 18. That means it won’t be long before today’s teens are looking for their own homes. And, according to Sherry Chris, chief executive of Better Homes and Gardens Real Estate, 97% of them want to own real estate. In the US in particular, they are also better placed to purchase property, with lower interest rates and higher salaries as two contributing factors.

In the meantime, w h i l e G e n Z h ave a little growing up to do, millennials are looking to buy their first properties. They have a tendency to steer away from the starter home category: those who have paid off student debt and have saved enough for a deposit are looking to expand on the basics. A higher percentage (17%) of those younger than 35 – compared with 14% across all age groups – were able to save enough for a deposit within a year, according to the National Association of Realtors.

Video is an essential part of real estate marketing – and drones in particular facilitate a unique perspective of a property, allowing potential buyers an aerial view of their desired house. “It’s a new way of interacting with clients and buyers from all around the world,” says Tim Nguyen, business development manager for DJI, a producer of unmanned aerial vehicles.

Source: marketwatch.com

Find more international property news at propertyprofessional.co.za

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An interesting shift is that many older renters (58%) are content to rent in perpetuity Knight Knox and OnePoll UK rental survey

RENTING AND FAIRLY HAPPY ABOUT IT The majority of the UK’s renters are not saving for home ownership, nor are they overly concerned about it. Knight Knox and OnePoll surveyed 2,000 renters to gain insights into current UK rental market trends.

The findings, released in January 2017, showed that people either preferred renting to a mortgaged home, or have resigned themselves to the fact that they are unlikely to own their own home. Nationwide, 61% of respondents said they are content with renting due to factors including “not wanting to be tied down to a mortgage” or renting “better suiting” their lifestyles.

An interesting shift is that many older renters (58%) are content to rent in perpetuity.

Yet some younger renters are still optimistic about owning a home one day and 33% are currently saving for a deposit.

GOOD TO KNOW

The largest age demographic of tenants surveyed (52%) was 18-35. A substantial proportion of renters (48%) were aged 35-55.

The largest demographic of renters polled (64%) lived with their spouse and/or children.

But 31% of these were aged 35 to 55 plus.

Most respondents living alone or with friends/housemates (16%) were aged 18-35. Of renters aged more than 55, the majority lived alone (42%), or with a partner or spouse (37%).

A significant 52% said they are currently in the private rented sector because they can’t afford a deposit. Many respondents (49%) said they had lived in four to eight rented properties during their lifetime.

PROPERTYPROFESSIONAL.CO.ZA

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21/02/2017 06:41

ADVERTORIAL

Video content that works for you PROMOTE YOUR PROPERTY

USE VIDEO TO LAND MORE STOCK AND SELL MORE HOMES Video is the fastest way to share information. It’s not only fast but emotional and believable. As a real estate professional, let The Creative Group help you market your listings and yourself online Real estate relies on visual content. Buyers can find meaning and have a better sense of a home and a suburb. Using video allows each property to be marketed to its fullest, instilling trust and competency with sellers and buyers.

If your website includes video, users are likely to stay longer. And the longer a user stays, the more likely they are to translate into a lead.

YouTube is now the top video research destination for house hunters in the US. According to the National Association of Realtors, 73% of sellers would choose an agent who can market their property with video.

The Creative Group’s team of experienced content producers can create and customise high-quality, engaging video content that is a step up from the rest.

FOR MAXIMUM EXPOSURE Videos can be included on your website and on property portals, in e-newsletters and in e-mail signatures. Links can be included in print media material.

WHY YOUR BUSINESS NEEDS VIDEO

IMAGE: iSTOCK BY GETTY IMAGES

8.28m 100m YouTube’s users, making it the second-largest search engine

Facebook's daily video watch time in hours by May 2016

79

%

Video portion of consumer internet traffic by 2018

A walk-through of a property mimics the experience of virtual reality. The viewer has a true sense of the property and its layout.

Or choose an upmarket, high-production video that gives the viewer a feel for the home, with a focus on highlighting the best aspects of the property. This includes drone footage.

SELL YOUR AREA Our suburb videos show off an area and its best amenities, highlighting good schools and exploring the community. Ideal for marketing your stock to its fullest, these videos will position you as the local expert and instil a sense of trust with your buyers and sellers.

TELL YOUR BRAND STORY Profile videos are professionally edited interviews with a real estate professional.

It could be your company CEO, a principal or an agent, and it includes a branch profile.

Use it to create strong brand awareness, which translates into more leads.

MARKET DEVELOPMENTS AND ESTATES These sophisticated, custom videos have considered editing with development marketing in mind. An interview about the property with a development representative and drone footage is included.

Watch our showreel of some of the work we’ve done for our clients: thecreativegroup.info/video

In line with your business objectives, THE CREATIVE GROUP can help you to create high-impact, consistent messaging and brand awareness for the right media platforms, with cost efficiencies in mind. All our videos are crafted towards increasing our clients' sales and bottom line.

Chat to us about your requirements: e-mail michele.jones@thecreativegroup.info

MARCH/APRIL 2017

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21/02/2017 06:51

CONFLICT RESOLUTION SUNGULA NKABINDE

Why was the Community Schemes Ombud Service Act necessary? And what impact has it had on property owners?

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A

mendments to the Sectional Titles Act, introduced on 7 October 2016, brought two legislative developments to the property industry: the introduction of the Sectional Titles Schemes Management Act and the Community Schemes Ombud Service Act (acts 8 and 9 of 2011). The latter led to the establishment of the Community Schemes Ombud Service (CSOS), headed by chief ombudsman Themba Mthethwa.

In case you are not up to speed, community housing schemes include sectional title units, townhouse complexes, retirement villages, residential estates, share-block schemes and housing co-operatives. One downside of these schemes, however, is that disputes tend to arise between owners and body corporates.

WHY DO WE NEED IT?

The CSOS was formed because of the need for a cost-eective alternative to resolve these disagreements: in the past, there was a lack of aordable solutions, not everyone understood the process and it tended to become drawn out.

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2017/02/22 10:21 AM

NEWSWORTHY

But thanks to the CSOS, stakeholders in community schemes (owners, tenants, body corporates) can now approach the ombud with issues instead of going through the courts, says Mthethwa. The ombud will then decide whether the dispute should be dismissed, mediated or adjudicated.

WHAT ARE THE ISSUES?

Since the CSOS came into effect last year, the majority of spats have been financial, more so than disagreements with neighbours. Says Mthethwa: “Conflict between neighbours is one of the fewest types of applications we receive.

The most common cases have, so far, tended to be between owners and their body corporates with regard to levies. Examples of contentious issues include increases in levies, imposed special levies and interest on late payments.”

One owner, for instance, was fined R2,000 because of guests who were allegedly inebriated and then assaulted a security guard. The amount was added to her billing statement without any investigation to prove what had happened.

Community schemes specialist Judith van der Walt says some financial disputes arise because owners either cannot afford increases to levies or because they do not feel improvements to a common area are necessary.

Says Van der Walt: “Sometimes, pensioners are on a tight budget and can’t extend themselves any further. Tensions arise as some people in a scheme may be prepared to pay additional costs to improve their environment, while others may consider it unnecessary.”

Another common dispute is regarding issues raised in annual general meetings (AGMs).

Those who could not attend feel aggrieved by what they perceive as sudden changes in their billing statement. This is something that can be resolved simply, says BBM Attorneys’ director Marina Constas, who is also on the board of the CSOS: owners need to make sure they attend AGMs. Says Constas: “People complain about levies being too high – or that they don’t know what the levies are being used for. But those questions are answered by the body corporate trustees at every AGM.”

Points to keep in mind

• New developments have to be registered with the CSOS for approval before title deeds can be transferred.

• Rules for the community scheme have to be approved for constitutionality. After that, a certificate is issued that allows units to be registered at the deeds office.

• Every body corporate has to have a 10-year maintenance plan and a separate long-term maintenance reserve fund based on expected costs.

• While not compulsory, either the body corporate or the trustees are encouraged to appoint a managing agent to run the property.

• The act is specific about scheduling meetings, establishing a quorum and voting by proxy.

• Whether schemes have strong reserves or not, their levies will have to be revised, if only to include contributions to the CSOS. • All community schemes need to be registered with the CSOS and to send regular copies and reports to the new ombud’s office on the financial health of the body corporate, along with an audited annual report.

• Any changes made to levy contributions and rules must be certified in writing.

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2017/02/22 10:21 AM

NEWSWORTHY

RULES OF COMMUNITY SCHEMES

In addition, there has been a need for dispute resolution between owners and body corporates about issues relating to community scheme rules. Some estates do not want children in the complex because of the noise they make while playing, for example. Or owners are not allowed to park in their driveway for longer than an hour before they have to move their car into their garage.

Says Constas: “There are also behavioural disputes where owners harass body corporate trustees on a constant basis and assault charges can be laid.” She cites the example of a shooting in a Moreleta Park in October last year over a wall construction – which further serves to reinforce attendance at AGMs. “Failing this, a lot of aggression that can be avoided by approaching the ombud’s office,” says Constas.

ARE THERE ANY CRITIQUES?

Themba Mthethwa, chief ombudsman, Community Schemes Ombud Service

How to complain

• The cost of an application to the CSOS is R50 for conciliation and R100 for adjudication.

Adjudication occurs when parties cannot reach an amicable resolution and a private adjudicator must decide on the outcome. According to Constas, depending on the amount of money involved or the performance required, adjudication can be ordered by the magistrates’ or high court. If this is ignored, those involved will be held in contempt of court and may be imprisoned.

• Decisions are as binding as those of a high court. They can be enforced by a sheriff and cannot be appealed unless it is on a point of law (not on an understanding of the facts).

• Application forms and further information can be found online via csos.org.za/ disputeresprocess.html

IMAGES: iSTOCK BY GETTY IMAGES

Van der Walt’s only criticism of the CSOS is that there has not been any training for community scheme professionals. Says Van der Walt: “The Act states that the CSOS has to offer training for their staff and for people in the industry on community schemes.” As a practising attorney in the field, she has also not received any requests for training, she comments.

She does mention, however, that the body will only start collecting levies in March and therefore should be given more time before passing judgment on how effective it has been.

The most common cases have, so far, tended to be between owners and their body corporates with regard to levies

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PROPERTYPROFESSIONAL.CO.ZA

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2017/02/22 10:22 AM

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Bill Rawson, chairman of Rawson Property Group and property investor in his own right, on how to really make money as an estate agent

CATHERINE DAVIS

THE

ROAD

TO

RICHES

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COVER STORY

That Rawson Property Group has a development business unit – Rawson Developers – makes them stand out in the traditional estate agency world in South Africa

W

hen Bill Rawson “went into property” in 1972, his motivation was blatant: to make money.

He came from a poor background and had trained as an accountant but soon realised that in a career like that he would only get paid by the hour.

“In property sales, you earn according to how successful you are, not by your time. I needed to make money and I figured out that I needed to get into something where I could determine my own income.

Being an estate agent allows that, provided you’re prepared to put in the hours and the work,” he says.

Rawson went to work for Cape Town agency Plotland, now closed. “There was no training in those days – most operated like cowboys, and they were doing a disservice to the industry. I vowed that if I ever had my own business one day, I would have the best agent training set up – it’s vital for success.”

UPSKILLING AND EXPANSION

He persevered without formal training by observing others and noting how they did business. He also noted how not to do business. Says Rawson: “I gave clients a better service than those around me, and I was able to advise them on how to grow their wealth by investing in property. And from that, I made money.”

For a while Rawson sold plot-and-plan housing, where he even learnt how to build a house. He believes this adds to his property-selling skills set. “Any salesman should know all the ins and outs of the product they’re selling. For estate agents, that’s a house; bricks and mortar.”

Rawson Property Group started in 1978.

But it was in 1982 when Rawson launched Bill Rawson Estates from a 40m2 office in Claremont and employed 25 estate agents that “we cooked”. He adds: “We did the training and we sold about 30-40 properties a month from that little office.”

DIFFERENTIATION BY DEVELOPMENT

Watch Bill Rawson on video about the property portal space and more: propertyprofessional.co.za

Between 1982 and 1998, Rawson’s offices expanded to 15 branches in the vicinity of Cape Town. Then he franchised the business to increase his development exposure.

“Development is a high-risk business – 95% of developers go bankrupt,” he says.

That Rawson Property Group has a development business unit – Rawson Developers – makes them stand out in the traditional estate agency world in South Africa. It came about because Rawson started investing in vacant land, which he then subdivided and sold off as plots.

He tried to keep two plots for himself each time. “I would sell five plots to pay for the two. On my two I would build houses and sell them for more, which then became part of my property portfolio.”

CAPITAL APPRECIATION

Building a commodity that people want is creative and exciting, says Rawson. But most people don’t have the capital to do that and it’s a challenge to secure finance to build – Rawson Developers offer investors a piece of that property development pie.

It is currently building and developing 810 residential apartments/houses on seven sites to the value of R2.2bn.

“People who buy from us off-plan always make money. In the time it takes for us to build it – about 18-24 months – that property has appreciated. That it’s a new, modern home makes it highly desirable. Many of our investors follow us from development to development because they’re making money. And each development we build gets better and better.”

ADVICE TO AGENTS

As an agent, you can make handsome commissions if you give excellent service, and work at it, says Rawson. “Many agents don’t realise they are in a fantastic business.

We don’t carry the risk of holding any stock.

All we need is a car and a cellphone, and we can go out there and trade.”

When Rawson started his career he focused on the idea that he was helping people buy homes for their families; that he could offer them a safe and secure place to live. “I set myself weekly targets and monthly targets. If you’re running a business, you have to do that, and keep a diary.”

And you must be an expert in your field.

“When you join Rawson Property MARCH/ARIL 2017

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22/02/2017 08:37

COVER STORY

Bill Rawson’s tips for new agents 1.

Set yourself annual goals. And write them down – every day, every week, every month. Understand the activity it will take to achieve that goal.

2. Keep a written diary. Electronic or paper – although I haven’t met anyone who has kept an electronic diary successfully. It’s important to review what you have done.

3. Buy a property every one to two years.

Set yourself a target: your money and property should work for you and not the other way around.

Bill Rawson on real estate marketing

5.

6.

In marketing today, you have to use a spray-gun approach. Consumers are in so many spaces including digital and social media. I regard word of mouth as the most important.

Our car branding has been one of our most successful strategies. Our fleet of 358 branded cars cover thousands of kilometres every month.

I still love the show house as a marketing instrument. As well as the simple ‘For Sale’ sign outside a property.

Print advertising is still a force to be reckoned with. But it’s important that our ads are seen in the right editorial context.

Agents need to participate in promoting themselves individually as a brand. Even within their agency brand. I’m a great fan of YouTube – agents should include video in their marketing toolbox.

22

Group, you have to complete the two-week training programme. And by rights you should have basic plumbing knowledge, know about architecture and quantity surveying, stay up to date with zoning laws ...

Know your business, and you’ll do well.”

But don’t spend all your commission if you really want to make money. Rawson’s mantra is: live on half; invest half. Be a good estate agent and be a good property investor – long-term, and also short-term as a speculator. In that way you can earn a passive income and grow your wealth.

“I bought as much property as I could.

As agents in the property business we see market trends, we come across opportunities. Take advantage! You’re in the industry but you don’t invest in the industry.

Why not? By the time I was 32, I owned 12 income-producing properties.”

7.

Read. Books, newspapers, online stories. Research and analyse the property market and eventually, with experience, you can predict trends.

Don’t get left behind. Keep up with digital developments and embrace them. Join an agency that invests in technology.

Join industry associations. We need each other and should help each other.

Organisations offer good knowledgesharing opportunities.

Attend the National Association of Realtors conference. I recommend that every agent should go at least once to see the property industry in the States.

You will notice that the South African industry is over-regulated compared to the rest of the world.

Set yourself a target: your money and property should work for you and not the other way around

IMAGES: IAN ENGELBRECHT

4.

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Will the residential market pick up in 2017?

Experts and agents weigh in

24

Source: FNB

Residential market activity indicator 8 7.5 6.73

7 6.5 6

IMAGE: iSTOCK BY GETTY IMAGES

NEESA MOODLEY

WHAT DO SURVEYED AGENTS PREDICT?

The FNB Estate Agent Survey is an audit of a sample of estate agents predominantly in South Africa’s major metro regions, published in January 2017. The key question in this survey was: “Does the agent expect activity levels to increase, remain the same or decline in the next three months?” The responses were aggregated into the percentage of agents expecting each of the three outcomes.

Activity levels on a scale of 1-10

?

RISE OR FALL

T

he downward trend in the residential market could well have reached the bottom. Things may turn around in the year ahead but it’s still a long road according to the FNB Estate Agent Survey for Q4 2016.

John Loos, household and property sector strategist for FNB, notes that although there was an uptick towards the end of last year, we will have to wait to see if this really means the market is bottoming out. “It is too early to say whether this one quarter rise is merely ‘noise’ or the start of a strengthening trend,” he says.

5.75

5.5 5 4.5 4 2004

2006

2008

National activity rating scale 1-10

2010

2012

2014

2016

Seasonally adjusted activity rating

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FINANCE

It is too early to say whether this one quarter rise is merely ‘noise’ or the start of a strengthening trend John Loos, FNB household and property sector strategist

income, a tightening labour market and tight financial conditions. He says: “We expect consumers to remain under pressure, with household expenditure only recovering in the third quarter once the Reserve Bank starts cutting interest rates.”

While Golding agrees in part, he is hopeful of growth: “While political and economic uncertainty is likely to continue across the globe this year, it is hoped that local economic growth will be modestly stronger, which will be more supportive for the South African housing market.”

In Q4 2016, the percentage of agents expecting a decrease in activity in the next three months was 25%, those expecting unchanged activity measured 50%, while the remaining 25% expected an increase. One of the questions in the survey referred to agents’ perceptions of residential market activity in their areas, on a scale of 1 to 10, with 10 being the strongest level of activity. The Residential Activity Indicator in the quarter rose slightly to 5.75, from the previous quarter’s 5.59.

Source: FNB

Factors that influence expectations of near-term future activity (percentage of agents)

55

Seasonality Economic stress/general pessimism

22 6

Ample stock

10

Stock constraints Pricing and affordability

14 6 5 5

Area-specific issues Consumer positive sentiment Buyers’ mindset

3 3

Strict credit environment Interest rates

1

Sellers’ mindset

5

Other

IMAGE: iSTOCK BY GETTY IMAGES

0

10

20

30 %

40

50

60

Loos notes that quarter-to-quarter fluctuations can be driven to a significant degree by seasonal factors prevalent in the housing market. Andrew Golding, CEO of Pam Golding Properties, agrees, saying that much depends on the performance of the rand. But on balance the general expectation is that inflation will fall quite noticeably by the second half of 2017, hopefully with the Reserve Bank looking to cut interest rates during this latter part of the year.

Economist at Standard Bank Siphamandla Mkhwanazi believes that purchasing activity will continue to point to subdued demand because of rising political uncertainty, slowing growth of disposable

ON MORTGAGE LENDING

Loos says that new mortgage lending trend changes normally only follow an Activity Rating growth trend change with a considerable lag time. “Therefore, even if residential activity is gradually turning upwards, new mortgage lending could still be in year-on-year decline for the first half of this year,” he says.

SELLING WITHIN THE MARKET

As an estate agent, your role is to guide your client through the process of buying and/or selling their property in the midst of a market that is slowly turning up. Here’s what you can do: • First-time buyers want a foot in the property market.

Encourage them to save for a deposit first so that their home loan application is less likely to be turned down. A typical deposit should be 10%-20% of the purchase price.

• Repeat buyers need bigger deposits. According to chief executive of Betterlife Shaun Rademeyer, those who have owned property before are now paying deposits of as much as 40%. The average deposit in 2016 was 22%.

• Buyers should always consider location, regardless of whether the property will be an investment or a primary residence. Location is key to an attractive property that will grow in value. This fits in with the current trends towards mixed-use developments in metropolitan areas, where home owners are increasingly looking for a home within easy reach of shops, schools and work or at least on a major route.

• An energy- and water-efficient home is more attractive. South Africans have become more conscious of the need to save water and be environmentally friendly. If your client is looking to sell their home, it is worth their while to invest in improvements that tap into this market.

• Your clients should understand the dynamics of the housing market when making a sound investment decision. According to Golding, these include factors such as the ongoing migration of people, supply of new housing units and lifestyle trends.

MARCH/APRIL 2017

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21/02/2017 18:19

“It is not in numbers, but in unity, that our great strength lies.”

THOMAS PAINE

Rebosa invites you to join together in the best interests of the South African real estate industry.

WWW.REBOSA.CO.ZA

REAL ESTATE BUSINESS OWNERS OF SOUTH AFRICA

AGENT DEVELOPMENT

CREATING CONNECTIONS

Find more useful training and industry advice on propertyprofessional.co.za – click on Tools of the Trade in the top navbar

PRIVATE PROPERTY PROVIDES TIPS ON HOW TO USE NETWORKING TO YOUR ADVANTAGE

Which events can be potential networking opportunities?

Why are relationships so important for estate agents?

The ability to make connections and form strong relationships is crucial to your success as an estate agent. You’re asking people to trust you when they’re committing to one of the biggest financial decisions of their lives – buying property.

Is there an art to networking?

Absolutely. A few points to keep in mind: • Listen more than you talk.

• Collect more business cards than you give out – this puts the power to follow up in your hands.

• Stay off your phone and interact personally with the people around you.

• Don’t spend too much time with people you already know. The point of networking is to make new contacts.

• Take notes when people talk. The more you know about them, the better you can serve them as an agent.

28

As an agent, any event should be considered a networking opportunity since it can provide a window to meet people and increase your sphere of influence.

Keep an eye out for: • Community events To show that you are active in your local community. The people attending will probably be active in your market.

•

•

Business breakfasts An opportunity to meet people bright and early, before the workday starts.

Industry-specific events For real estate or any other industry. Most people, regardless of the industry they’re in, will have property needs at some stage. Treat everyone as a potential client.

New contact dos and don’ts Do

Don’t

• Write a personal e-mail.

• Follow up immediately to keep the conversation going.

• Stay in touch so that you’re the first agent that comes to mind when they need to buy or sell a home.

• Automatically sign up somebody for your newsletter.

• Send an impersonal group e-mail.

• Get in touch repeatedly if there is no response.

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SECTIONAL TITLE LIVING: DISPUTES ARE FOR RESOLVING To purchase a home in a residential scheme (whether sectional title or managed by a homeowners’ association) is an attractive option for many home buyers, whether for security, affordability or lock-up-and-go reasons.

The charm of such an investment is, however, often watered down by learning of the continuous occurrence of disputes amongst owners or between owners and the governing body. In the September 2016 matter of Kranspoort Eienaars Komitee v D J and Another the court was approached to resolve a dispute regarding a barking Chihuahua and stated that it was “to be deprecated that a high court is burdened with such a dispute … and it is equally deplorable that the parties cannot themselves resolve an issue of this nature.”

A sensible route is to approach a property law expert and mediator to conciliate or mediate the matter for you, especially where there are questions of law or complicated factual disputes. Where the facts are self-explanatory and the law not challenged, you can also approach the Community Schemes Ombud for help. STBB has the reputation as being the benchmark in South Africa for property law matters and expertise. Contact us at info@stbb.co.za for assistance in all your residential schemes matters.

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LIFE HACKS

Retirement home ownership

B

ecause of huge demand, retirement villages are mushrooming in South Africa. People are tired of being placed on unrealistic waiting lists – and developers, sensing an opportunity, are stepping up to the plate. Buyers need to investigate the options and understand some of the legislation governing retirement villages.

For the most part, retirees can choose between buying a unit in a sectional title complex or buying a life right.

own homes without living in what can often be a depressing frail care environment. Many of the more proactive retirement villages and lifestyle-type estates are going this route.

POINT OF LAW

○

○

SECTIONAL TITLE

Developers can sectionalise the village and register it as a sectional title scheme.

The Sectional Titles Act applies and the fact that it is strictly a retirement village reflects in the rules of the complex.

LIFE RIGHT

The buyer commits to paying a contribution (in other words the purchase price) and has the right to live in the unit for the remainder of his lifetime or until he leaves the village.

The life right option should never be regarded as a property investment as there is no asset that grows in value, which means that neither the purchaser nor his estate stands to benefit financially from the transaction. Life right does guarantee a safe place to live until the end of the buyer’s days, it caters to the needs of the elderly and has medical care.

FRAIL CARE

The trend is away from in-house frail care and towards home-based care. This means people can be looked after in their

○

○

Life right developments fall under the Housing Development Schemes for Retired Persons Act 65 of 1988.

A Section 21 company must run the life right scheme. This falls under the Companies Act and must have a Memorandum of Incorporation rather than a Memorandum of Articles.

An endorsement must be made against the title deeds of the scheme as well as the units to which the Act applied. An architect’s certificate is required to declare that the building is fit for its purpose.

The agreement between the developer and the occupant must specify the estimated levies for two years in advance.

It also has to go on record that the prospective occupant knows his rights and is aware of what he could recover if the contract ends.

GOOD TO KNOW

If you pass away or leave, the Section 21 company or trust running the scheme may retain a percentage of the original contribution or the new sale price, whichever is greater.

For example, if this takes place within 12 months, the occupant or his estate will receive 80% of the original payment. After 12 months, he will receive 70% and, after 24 months, 50%. The reasonable cost of

When buying retirement homes, there are life right and sectional title options. Knowing the difference is crucial to managing buyers’ expectations fixing up the interior of the unit will also be deducted from the payment to the occupant or his estate.

All owners in retirement villages, whether they reside in a life right set-up or own a sectional title unit in a lifestyle estate, fall under the auspices of the Community Schemes Ombud Service. Each owner must pay an additional levy capped at R40 per unit dependant on the amount of the monthly levy. Any disputes within the schemes may be referred to the Ombud.

Life right does guarantee a safe place to live until the end of the buyer’s days, it caters to the needs of the elderly and has medical care Marina Constas is a specialist sectional title attorney and a director at BBM Attorneys. She co-authored the book Demystifying Sectional Title, a definitive guide to living in, buying or leasing property in a sectional title complex.

MARCH/APRIL 2017

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IMAGE: SUPPLIED

MARINA CONSTAS

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22/02/2017 08:29

M O T I VA T I O N JO-ANNE STRYDOM

I

s the industry really that professional?

The word implies that you are an expert in your field. And while there are certainly agents and companies who live up to expectations, we still have a long way to go.

Finally, however, the industry is being regulated; this is no longer a part-time option. After completing your final exam (the Professional Designation Evaluation or PDE), you are able to use either the designation Professional Practitioner in Real Estate or Master Practitioner in Real Estate.

WHAT NOT TO DO

Based on personal experience – or on those of friends and colleagues – here are five real-life anecdotes of unprofessional behaviour in the industry.

1. One seller’s house was marketed at seven different prices in the media, the square meterage was advertised differently and potential buyers had no prior arrangements to view the property.

2. A principal asked whether she should “do this Continuing Professional Development (CPD) stuff”. No-one is exempted; it is part of the new regulations.

3. I once referred a seller to the agent selling in his complex. Two weeks later, the seller called back to say he hadn’t yet heard from the agent.

4. An agent attended a workshop last year in sweatpants and slippers.

32

Conducting yourself in a professional manner is essential as an agent. Start with these basics during your next client meeting

5. On the morning of training events, agents and principals call to ask for details, even though their questions have been answered already via e-mail.

Or they assume workshops are at a specific venue without reading their mails properly and pitch up at the wrong place.

THE PROFESSIONAL ESSENTIALS

What, then, are the alternatives when it comes to conducting yourself professionally?

Dress code You need to look good and be prepared; it only takes a few seconds to create a good impression.

Body language Make each client feel that they are important. Listen, maintain eye contact and don’t take calls or answer messages during your meeting.

Know your area and trade Stay on top of changes, new legislation, municipal bylaws, developments and changes in your area.

Know more than your customers – the same information is also freely available to them.

Communicate effectively Check your spelling, stay in touch and provide proper and timeous feedback.

Code of conduct Live up to the principles of honesty, accountability, respect, fairness, trust, knowledge, reliability and friendliness.

Deliver exceptional service You are building a network of clients who will hopefully see you as their preferred agent and will refer clients and family to you.

Competence and qualifications Register with the EAAB, have a valid FFC, complete the relevant qualifications along with your logbook, attend CPD and register with PrivySeal (available via eaab.org.za).

Also attend any additional training to stay motivated.

Become the professional your clients and colleagues expect, which in turn makes your professional fee easier to negotiate.

Remember that real estate can only work for you over time – there’s no quick fix.

Know more than your customers – the same information is also freely available to them Jo-Anne Strydom has 21 years of real estate experience, initially as a sales agent before moving into training. She studied Real Estate Advanced Practices in Miami and is an accredited real estate assessor and moderator in South Africa.

IMAGE: SUPPLIED

How to create a good impression

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