South African Property Review March 2018

South African Property Review

PROPERTY SOUTH AFRICAN

March 2018

REVIEW

PROPERTY REVIEW - LogoTreatment.pdf

South Africa:

1

2016/08/25

11:31 AM

Open for business Legal views

Get to know water bylaws Property law

Bitcoin Legal currency in South Africa?

Developers take the lead in water conservation

March 2018

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SOUTH AFRICAN PROPERTY REVIEW

from the CEO

SAPOA’s view on the meaning of public participation The City of Cape Town put out two pieces of legislation for public comment in December 2017: • The City of Cape Town Drought Charge • The Cape Town Water Amendment Bill The notice and invitation for comments were issued during the December break, when the city knows that the property industry has shut down for the festive season. The question is whether the city truly regards this as proper public participation, or whether it is being disingenuous in trying to push this proposal through without proper participation. The city later extended the deadline to 15 February 2018

What exactly is meant by public participation?

Public participation is the process by which an organisation consults with interested and affected individuals, organisations and government entities before making a decision. Public participation is two-way communication and collaborative problemsolving aimed at achieving better and more acceptable decisions. Public participation prevents or minimises disputes by creating a process for resolving issues before they become polarised. Other terms sometimes used are “public involvement”, “community involvement” or “stakeholder involvement”.

Public participation can be any process that directly engages the public in decisionmaking and considers public input in making a decision. It is a process, not a single event.

It consists of a series of activities and actions by a sponsor agency over the full life span of a project to both inform the public and obtain input from them. Public participation affords stakeholders (those who have an interest or stake in an issue, such as individuals, interest groups and communities) the opportunity to influence decisions that affect their lives.

The matter of SAPOA vs the Council of the City of Johannesburg Metropolitan Municipality (an Appellate Division case) is an appeal concerning the levying of property rates of 1,54 cents in terms of the Local Government: Municipal Property Rates Act No. 6 of 2004 on business, commercial and industrial properties by the Council of the City of Johannesburg for the 2009/2010 financial year.

The other issues raised by SAPOA in this matter were the non-compliance by the City of Johannesburg with the provisions of the Local Government: Municipal Finance Management Act No. 56 of 2003, the Local Government: Municipal Systems Act No. 32

of 2000 and the Local Government: Property Rates Act No. 6 of 2004, when it materially amended a proposed budget after it had been tabled and advertised for public comment.

SAPOA contended that municipalities are part of the local sphere of government and must provide services to communities in a sustainable manner, thus encouraging involvement of communities/community organisations in local government matters.

While the Systems Act provides that a municipality is an organ of state with a separate legal personality, and that the council has the right to govern the local government affairs of the community and the right to exercise the municipality’s executive and legislative authority, and to do so without improper interference, it also provides that members of the local community have the right “through mechanisms and in accordance with processes and procedures provided for in terms of this Act or other applicable legislation to contribute to the decisionmaking processes of the municipality”.

Chapter 4 of the Systems Act provides in detail for community participation and

emphasises the need for the community to be apprised effectively of all matters requiring participation. Regarding public comment on the Water Amendment Bill, SAPOA’s intention was to strongly object against the timing and time frame of the public participation process, and to submit broadly the legal basis upon which the city would remain in violation of legal principles should it not accede to a request for extension.

We continue to remain concerned about rushed amendments to any piece of legislation because this holds the very real risk of unsustainability and unintended consequences that may have impacts well in excess of the intended benefits. Precedent has already been set for the fundamental unreasonableness – and unlawfulness – of conducting public participation over the December holiday; this is to be found in the regulations to the National Environmental Management Act No. 107 of 1998, that being GNR 9826 (the Regulations). It is notable that the legislature had deemed it improper, and made it unlawful, to calculate the period between 15 December and 5 January as part of a consultation period, as per Regulation 3(2) of the Regulations.

Even a nominal overlap of this period within a consultation process is unlawful under this national piece of legislation.

Public participation is central to the matter of fairness and legality. It is our considered view that it is in the interest of municipalities and organs of state that the processes of consultation be conducted fairly, ensuring sustainable and appropriate amendments in the interest ofcivil society in general.

It serves no purpose to pass laws fraught with procedural irregularities, resulting in same being set aside.

Best regards, Neil Gopal, CEO SOUTH AFRICAN PROPERTY REVIEW

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contents

March 2018

PROPERTY SOUTH AFRICAN

REVIEW

South African Property Review

1

PROPERTY SOUTH AFRICAN

March 2018

REVIEW

PROPERTY REVIEW - LogoTreatment.pdf

South Africa:

1

2016/08/25

11:31 AM

Open for business Legal views

Get to know water bylaws Property law

2

Bitcoin Legal currency in South Africa?

March 2018

3

1 BCX Head Office. Architects: SVA International 2 Management Team 3 Menlyn Learning Hub. Architects: Boogertman + Partners 4 West Hills Mall in Ghana. Architects: ARC Architects

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Leaders in Quantity Surveying and Property Valuation OUR SERVICES: • Quantity Surveying • Management • Dispute Resolution • Property Valuation Associated offices: BOTSWANA | GHANA | KENYA | MAURITIUS | NAMIBIA | NIGERIA | TANZANIA | UGANDA Johannesburg: +27 (11) 642 8751 Pretoria: +27 (12) 460 3304 WWW.DELQS.CO.ZA

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Developers take the lead in water conservation

ON THE COVER With South Africa being a water-deficient country, there is room for innovation and conservation to lead the way for sustainable energy and water resources. We look at various water bylaws and what their impact is on the property industry Image Credit: https://economyandmarkets.com/markets/ currencies/rodney-johnson-plusses-minusesbitcoin-blockchain-2/

From the CEO From the Editor’s desk 2018 Budget Highlights Property industry comments on former Finance Minister Malusi Gigaba’s 2018 budget speech Education SAPOA Bursary Fund success stories Education SAPOA Tenant Arrears in Commercial Property Workshop hosted in Gauteng Legal update Significant step towards electronic conveyancing Legal update Proposed amendments to the City of Cape Town Water Bylaw Legal online Allira chatbot brings legal services to people least able to afford them Legal chat Commercial property: what to look out for when considering a purchase Development – Western Cape E.A.T: fundamental to economic development Developer’s response Reduce, reuse and find alternative supplies Sustainable education Greenovate Awards: a bridge between university and industry Drought update City of Cape Town Water Bylaw 2010 and Water Amendment Bylaw 2017: know your water regulations Water saving 15 ways to save water in the commercial and retail sector H2O Nelson Mandela Bay just as badly hit as drought-affected Western Cape Cryptocurrency Is bitcoin legal in South Africa?

Social Off the wall Electric flight FOR EDITORIAL ENQUIRIES, email mark@mpdps.com Published by SAPOA, Paddock View, Hunt’s End Office Park, 36 Wierda Road West, Wierda Valley, Sandton PO Box 78544, Sandton 2146 t: +27 (0)11 883 0679 f: +27 (0)11 883 0684

Editor in Chief Neil Gopal Editorial Adviser Jane Padayachee Managing Editor Mark Pettipher Copy Editor Ania Rokita Public Relations Officer Maud Nale Production Manager Dalene van Niekerk Designer Eugene Jonck Sales Nkepile Setshedi: sales@sapoa.org.za Finance Susan du Toit Contributors Robert Burman, Cliquesters,Johan Coetzee, Ines Esmeraldo, Mumtaz Moola, Maud Nale, Dean Raviv, Marlon Shevelew, Tshepo Tshabalala, www.howmuch.net Photography Mark Pettipher DISCLAIMER: The publisher and editor of this magazine give no warranties, guarantees or assurances and make no representations regarding any goods or services advertised within this edition. Copyright South African Property Owners’ Association (SAPOA).

All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from SAPOA. The publishers are not responsible for any unsolicited material.

Digitally Printed by Designed, written and produced for SAPOA by MPDPS (PTY) Ltd e: mark@mpdps.com

e: philip@rsalitho.co.za

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from the Editor’s desk

South Africa: open for business First Davos, then SONA, now the budget and cabinet reshuffle sentiment has turned the corner and many South Africans a breathing a sigh of relief

T

here’s no mistaking the upbeat feeling that’s around at the moment. I’ve not had this kind of positivity since last year, when investor confidence was mounting (only to have it dashed by the changing of the finance- ministerial guard).

Let’s not kid ourselves: each one of us is going to feel the effects of the increase to 15% in VAT and the 52c raise in the cost of petrol. But is that a bad thing?

It will force many of us to rethink our savings and take a closer look at our own budget. I can’t help but think, though, that the hikes will ultimately trickle down to the base cost of our food.

On a positive note, we have a new President, who is partly responsible for the euphoric atmosphere among us.

The SONA was upbeat; President Cyril Ramaphosa had South Africans uniting for the first time since Nelson Mandela in 1990 and the Rugby World Cup in 1995. Ramaphosa’s speech was truly inspirational – and anyone listening who had already met him in Davos would have a positive impression of the South African nation. Yes, we’re open for business, and Ramaphosa is urging all South Africans to come together and work for a better life for everyone.

Former Finance Minister Malusi Gigaba has also opened the doors for business, showing that there is hope for the way forward in the property sector. To quote from his budget speech, “Cities are the heart of the national economy and hold the potential to drive our economic renewal.

South Africa’s eight metros are home to 39% of our population but account for half of all employment (formal and informal) and 57% of the country’s total economic output. And the economic importance of cities is likely to increase.

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SOUTH AFRICAN PROPERTY REVIEW

“We must take advantage of this dynamic to drive inclusive growth.

The Integrated Urban Development Framework sets out government’s policy commitment to improving the

productivity of South Africa’s urban areas. Achieving this will require us to re-think approaches to South Africa’s urban development challenges, and to find new ways to stimulate faster and more inclusive growth.”

Gigaba also opened the way for the creation of more development zones.

“Working closely with the Department of Trade and Industry, I have approved six special economic zones that will make qualifying companies subject to a reduced corporate tax rate and enable them to claim an employment tax incentive for workers of all ages. These measures will promote investment in those manufacturing and tradeable services sectors that encourage exports, job creation and economic growth.”

Enjoy the read this month.

Mark Pettipher, Managing Editor

Deputy President: David “DD” Mabuza

Ministers Presidency (Planning, Monitoring and Evaluation) Nkosazana Dlamini-Zuma

Presidency (Women) Bathabile Dlamini

Finance Nhlanhla Nene

International Relations Lindiwe Sisulu

Mineral Resources Gwede Mantashe

Police Bheki Cele (promoted from Deputy Minister of DAFF)

Public Enterprises Pravin Gordhan

Public Service and Administration Ayanda Dlodlo

Tourism Derek Hanekom

Public Works Thulas Nxesi

Transport Blade Nzimande

Rural Development Maite Nkoana-Mashabane

Cooperative Governance and Traditional Affairs Zweli Mkhize

Science and Technology Mmamoloko Kubayi

Home Affairs Malusi Gigaba

Social Development Susan Shabangu

Communications Nomvula Mokonyane

Sport: Thokozile Xasa

Energy Jeff Radebe

State Security Dipuo Bertha Letsatsi-Duba (promoted from Deputy Minister)

Higher Education Naledi Pandor

Water and Sanitation Gugile Nkwinti

Human Settlements Nomaindia Mfeketo (promoted from Deputy Minister)

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SOUTH AFRICAN PROPERTY REVIEW

2018 budget highlights

Property industry comments on former Finance Minister

Malusi Gigaba’s 2018 budget speech

The 2018 National Budget Speech was received with much anticipation by businesses and citizens across the nation. The address, and the recent change in political leadership, delivered renewed hope regarding the future of the country’s economy. While tough decisions had to be made (an increase in VAT and a cut in infrastructure spending), the budget presented a meaningful stride towards narrowing the fiscal deficit and stabilising government debt Compiled by the University of Cape Town’s Urban Real Estate Research Unit

W

e reached out to some of the country’s top real estate experts for their opinion on the 2018 budget strategy. This is what they had to say.

Dr Andrew Golding, Chief Executive of Pam Golding Property Group “Given the hand that was dealt, government has performed a delicate balancing act, which we hope will serve to reignite confidence in investment in South Africa so we can regain our global credibility and satisfy the credit ratings agencies. Speaking from a property perspective, ours is a market 6

SOUTH AFRICAN PROPERTY REVIEW

fuelled by sentiment; therefore, a budget that satisfies the above criteria is expected to go a long way towards reaffirming investor confidence in the real estate sector.

“An interesting aspect of the budget speech is the proposal that about 195 000 government-owned properties with an estimated combined value of more than R40-billion should either be better used or sold off in the short to medium term. This could unlock new revenue streams as well as opportunities for property development and redevelopment.

“While we await further details, the government’s commitment to drive both urban and township development and stimulate faster and more inclusive growth augurs well for infrastructural investment and the facilitation and expansion of economic hubs, especially along key transport corridors. Also positive is the allocation of R6-billion for purposes that include drought relief, as well as to augment investment in public infrastructure.

“While growth forecasts for the South African economy appear increasingly positive, it will become evident in the coming days and weeks how the credit ratings agencies will respond to the budget.”

Craig Smith, Head of Research at Anchor Securities Stockbrokers “My initial view is that the 2018 budget is a responsible one. It clearly demonstrates government’s commitment to manage the fiscus in a responsible manner. This should be viewed favourably by the market, rating agencies and foreign investors, which in turn should make South Africa a more attractive investment destination and could result in stable to lower bond yields in the short to medium term. This, in turn, should support property prices.

“The counter to this is that a stable or strengthening rand will result in headwinds for local property companies with majority offshore exposure. I’m not saying these strategies shouldn’t be pursued or supported, but it is something to be mindful of. My sense is that BEE is going to become increasingly important in the property and listed property sector, and that large property companies will need to have a strong BEE strategy/agenda to have a sustainable business model.”

2018 budget highlights

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To find out more, call us on 0860 600 250, visit regus.co.za/PropertyReview or download our app WE ARE EXPANDING OUR NETWORK If you have space in your property, visit regus.co.za/PropertyReview

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2018 budget highlights

Jacques du Toit, Senior Property Economist at Absa Home Loans François Viruly, Associate Professor in the Department of Construction Economics and Management at the University of Cape Town “I think that a few things stand out in the national budget: 1. Government will be giving

considerable attention to the development of SMMEs. This is an opportunity for the property sector to deliver space that’ll make it possible for the sector to grow.

Added to this, opportunity will arise in the development of the newly announced special economic zones.

2. The budget focuses on the critical importance cities play in ensuring the performance of the national economy. The success of the property sector is closely associated with the performance of our cities. The budget mentions the introduction of a new grant that cities will be able to call on.

3. Although take-up in the commercial and residential property sectors remains subdued, the budget depicts a macro-economic environment that is positive for the property sector.

This includes improved economic growth prospects as well as an inflationary environment that is expected to remain in the two to six percent band.”

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SOUTH AFRICAN PROPERTY REVIEW

“The increase in VAT, the below-inflation tax relief on personal income tax and the increased fuel levies will all have a negative impact on consumer finances.

This will indirectly impact on the affordability of property. Any property up to R900 000 is still exempted from transfer duties. Low CPI and a stronger rand will increase the possibility of lower interest rates, which can have a positive effect on the property market in the long run.”

public by presenting a balanced budget set within the framework of the State of the Nation Address. Although there are small changes to the VAT rate and the personal income tax rate, we at Greeff don’t really see this affecting the property market. Property continues to be a good investment. A further positive is that duties on the transfer of properties will remain unchanged.

“The budget speech has laid out plans to move South Africa’s economy out of its current stagnation. It predicts an increase in GDP growth of 1,5% in 2018, rising to 2,1% in 2020, as well as a projected narrowing of the budget deficit from 4,3% of GDP in 2017/2018 to 3,5% in 2020/2021.

“Former Finance Minister Gigaba also announced much-needed drought relief to the tune of R6-billion. This is a welcome move and will definitely aid the droughtravaged areas of the country, in particular Cape Town.”

Rudi Botha, CEO of BetterBond

Mike Greef, Chief Executive Officer of Greed Christie’s International Real Estate “Former Finance Minister Malusi Gigaba’s 2018 budget speech has done much to allay the fears of investors and the

“In terms of a longer-term budget, increased employment is the real key to sustained growth and development in the real estate sector. At BetterBond, we’re encouraged by the forthcoming job summit and the Youth Working Group that were announced by President Cyril Ramaphosa during his State of the Nation Address, as well as the budget allocations for internship incentives and the establishment of a Youth Employment Service.”

2018 budget highlights ISSUED BY: National Treasury Tel: (012) 315 5757 www.treasury.gov.za

HIGHLIGHTS BUDGET FRAMEWORK

MACROECONOMIC OUTLOOK - SUMMARY

• The budget deficit is projected to narrow from 4.3 per cent of GDP in 2017/18 to 3.5 per cent in 2020/21.

• Main budget non-interest expenditure is projected to remain stable at 26.6 per cent of GDP between 2017/18 and 2020/21.

• Net debt is expected to stabilise at 53.2 per cent of GDP in 2023/24.

• Proposed tax measures will raise an additional R36 billion in 2018/19.

• The fiscal framework reflects two major changes that followed the 2017 MTBPS: mediumterm expenditure cuts identified by a Cabinet subcommittee amounting to R85 billion, and an additional allocation of R57 billion for fee-free higher education and training.

• Contingency reserves have been revised upwards to R26 billion over the next three years.

• Real growth in non-interest expenditure will average 1.8 per cent over the next three years. Post-school education and training is the fastest-growing category.

SPENDING PROGRAMMES

In 2018/19: • The VAT rate will increase from 14 to 15 per cent from 1 April 2018.

• R6.8 billion will be raised from partial relief for bracket creep.

• Increases in the general fuel levy and alcohol and tobacco excise duties will together raise revenue of R2.6 billion. Ad valorem excise duties for luxury goods, such as motor vehicles, will be increased.

• Estates above R30 million will now be taxed at a rate of 25 per cent.

• The plastic bag levy, motor vehicle emissions tax and the levy on incandescent light bulbs will be raised to promote eco-friendly choices. A health promotion levy, which taxes sugary beverages, will be implemented from 1 April 2018.

TAX REVENUE 2018/19 Personal income tax VAT

Household consumption

1.3

1.7

1.9

2.3

0.3

1.9

3.3

3.7

Exports

1.5

3.8

3.4

3.5

Imports

2.7

4.4

4.6

4.5

Gross domestic product

1.0

1.5

1.8

2.1

CPI inflation

5.3

5.3

5.4

5.5

Current account balance (% of GDP)

-2.2

-2.3

-2.7

-3.2

2017/18 R billion/percentage of GDP

Revenue

R84.8 bn R 77.5 bn

2018/19

Revised estimate

2019/20

2020/21

Medium-term estimates

1 353.6

1 490.7

1 609.7

28.8%

29.7%

29.9%

29.9%

1 558.0

1 671.2

1 803.0

1 941.9

Percentage of GDP

33.2%

33.3%

33.4%

33.4%

Budget balance

-204.3

-180.5

-193.3

-205.0

Percentage of GDP

-4.3%

-3.6%

-3.6%

-3.5%

4 699.4

5 025.4

5 390.1

5 808.3

Percentage of GDP Expenditure

Corporate income tax

2017/18 R billion

1 736.9

Customs and excise duties Other Fuel levies

Revised estimate

2018/19

2019/20

2020/21

Medium-term estimates

2017/18 – 2020/21 Average annual growth

Learning and culture

323.1

351.1

385.4

413.1

8.5%

Health

191.7

205.4

222.0

240.3

7.8%

Social development

234.9

259.4

281.8

305.8

9.2%

Community development

183.5

196.3

210.5

227.1

7.4%

Economic Development

183.5

200.1

211.9

227.1

7.4%

Peace and security

195.7

200.8

213.6

227.7

5.2%

General public services

62.1

64.0

65.9

70.5

4.3%

Payments for financial assets

20.4

6.0

6.2

6.6

1 394.8

1 483.1

1 597.3

1 718.1

7.2%

163.2

180.1

197.7

213.9

9.4%

–

8.0

8.0

10.0

1 558.0

1 671.2

1 803.0

1 941.9

Allocated expenditure

R97.4 bn

2020

CONSOLIDATED GOVERNMENT EXPENDITURE

BY FUNCTION, 2017/18 - 2020/21

TAX PROPOSALS

R231.2 bn

2019 Forecast

Gross fixed - capital formation

Gross domestic product

R348.1 bn

2018

Estimate

CONSOLIDATED GOVERNMENT FISCAL FRAMEWORK

Over the next three years, government will spend: • R528.4 billion on social grants.

• In total, R324 billion is provided for higher education and training, including R57 billion of new allocations for fee-free higher education and training.

• R792 billion on basic education, including R35 billion for infrastructure, and R15.3 billion for learner and teacher support materials, including ICT. • R667.8 billion on health, with R66.4 billion on the HIV, AIDS and TB conditional grant.

• R123.3 billion on subsidised public housing.

• R125.8 billion on water infrastructure and services.

• R207.4 billion on transfers of the local government equitable share to provide basic services to poor households.

• R129.2 billion to support affordable public transport.

R505.8 bn

2017

Percentage change

Debt-service costs Contingency reserve Consolidated expenditure

7.6%

SOUTH AFRICAN PROPERTY REVIEW

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2018 budget highlights

ISSUED BY: National Treasury Tel: (012) 315 5757 www.treasury.gov.za

2018/19 BUDGET EXPENDITURE CONSOLIDATED GOVERNMENT EXPENDITURE

ECONOMIC DEVELOPMENT

R200.1bn

R1.67 TRILLION Economic regulation and infrastructure

R97.9bn

Industrialisation and exports

R32.9bn

SOCIAL SERVICES

Basic education

R230.4bn

University transfers

R34.9bn

National Student Financial Aid Scheme

R22.8bn

Skills development levy institutions

R19.3bn

Education administration

R16.8bn

Technical and vocational education and training

R10.7bn

Agriculture and rural development

R30.2bn

Job creation and labour affairs

R23.3bn

Innovation, science and technology

R15.8bn

Police services

R99.1bn

District health services

R90.2bn

Defence and state security

R48.4bn

Central hospital services

R38.6bn

Law courts and prisons

R45.4bn

Provincial hospital services

R34.3bn

Other health services

R33.8bn

Facilities management and maintenance

R8.5bn

Home affairs

LEARNING AND CULTURE

R351.1bn

R7.9bn

HEALTH

PEACE AND SECURITY

R205.4bn

R200.8bn

Public administration and fiscal affairs

R40.4bn

Municipal equitable share

R62.7bn

Executive and legislative organs

R16.0bn

Human settlements, water and electrification programmes

R56.5bn

Public transport

R38.6bn

Other human settlements and municipal infrastructure

R38.5bn

Old-age grant

R70.5bn

External affairs

GENERAL PUBLIC SERVICES

R64bn

DEBT-SERVICE COSTS

R180.1bn

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R1.01 TRILLION

SOUTH AFRICAN PROPERTY REVIEW

R7.6bn

COMMUNITY DEVELOPMENT

R196.3bn

SOCIAL DEVELOPMENT

R259.4bn

Social security funds

R66bn

Child-support grant

R60.6bn

Disability grant

R22.1bn

Provincial social development

R20.6bn

Policy oversight and grant admin

R9.8bn

Other grants

R9.7bn

education & training

SAPOA Bursary Fund success stories In the last edition of Property Review, we provided feedback on the 2017 academic year and the student results. These success stories are the fuel that drives our passion to do more, so the Bursary Fund can reach more deserving students. SAPOA invited Philani Mzila and Mohammed Seedat, former bursars of the Fund, to share their stories about the strides they are making in the industry after being part of the programme Compiled by Moeketsi Moshata

Philani Mzila pursued a BCom degree with a major in Business Finance and Management at the University of Witwatersrand, and graduated with an honours degree in 2013.

“I spent just under four years at the Public Investment Corporation (PIC) in the Private Equity and Structured Products team. PIC is the largest asset manager in Africa, so this allowed me to obtain a wealth of exposure and experience in the property, agriculture, telecommunications, FMCG and media space, completing more than R40-billion in B-BBEE and structured investment product-type transactions.

“Post PIC, I joined Nisela Capital as a Senior Associate in the Private Equity and Advisory team. Nisela is a 100%black-owned asset management and advisory firm focused on executing transactions in South Africa and subSaharan Africa, with a primary focus on property-related advisory (the firm has advised on more than R15-billion

in property transactions) and investment into high-impact priority sectors such as agro-processing, healthcare and manufacturing.”

In 2017, Mzila was inducted into the World Economic Forum Global Shapers Community (Johannesburg Hub), an initiative where diverse teams of young people are united by common values of inclusion and social change to collaborate and enact initiatives for the betterment of their communities.

His passions include tackling developmental challenges such as financial inclusion through innovative solutions that are tailored for the African context. He is currently enrolled at Stellenbosch University’s Business School, completing his master’s degree in Development Finance.

Mohammed Seedat joined the Bursary Fund in 2014 to pursue a BSc Honours degree in Quantity Surveying at the University of the Witwatersrand.

“My initial sponsor had run into problems, so there was much uncertainty around

my return to university to complete my honours degree. I was informed that there may be an opportunity for me to complete my studies through the Bursary Fund and I instantly applied.

I’m grateful that I was able to complete my qualification – I thank my lucky stars every day that the bursary was granted.

“Once I completed my qualification, I struggled to secure employment.

SAPOA intervened once again with an internship opportunity through the Eris Property Group in 2015. In June of the same year, I secured permanent employment and became a Project Administrator within the Property Management division of the business.

I was later promoted to Projects Manager in April 2016. I am currently a Transactional Analyst within the Asset Management division, overseeing property acquisitions and disposals as well as running feasibility models on various proposed developments and refurbishments.

“My experience with the SAPOA Bursary Fund was a very successful one.

I would like to thank SAPOA for their willingness to assist students who want to enter the property sector.”

These success stories are the result of collaboration and contributions by SAPOA’s member companies. As a Fund, we are grateful for the financial support from our members as well as from non-member companies. We encourage more member companies to participate, where possible, in extending the reach and depth of the Bursary Fund, whether it be through financial contribution or mentorship/vocational work opportunities, so that the Fund can assist more students and deserving graduates.

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education & training

SAPOA Tenant Arrears in Commercial Property Workshop hosted in Gauteng The recent workshop, hosted by rental property attorney Marlon Shevelew, was deemed to be a huge success by the participants Words by Marlon Shevelew/Marlon Shevelew and Associates Inc

Marlon Shevelew, course facilitator

T

he recent Tenant Arrears in Commercial Property Workshop, run by awardwinning rental property attorney Marlon Shevelew, was a phenomenal success. It captured current events and trends in the commercial rental property arena by dealing with it not only from an academic perspective but also from a logical and lateral viewpoint that only a specialist property-litigating attorney can provide.

“What the law says and what happens in our courts is often quite different,” says Shevelew. The workshop covered a range of issues with the aim of educating and empowering property managers to deal with tenants who default on their lease obligations, rental collections, remedies available for breach of lease, court procedures, the landlord’s hypothec and other forms of security (including suretyships and collateral security such as notarial bonds), the legislation applicable to the rental property arena (such as the Companies Act, the Consumer Protection Act and the Conventional Penalties Act), the impact of liquidations and businessrescue proceedings on leases, and valuable insight into recent case law impacting directly on the industry.

SAPOA intends to host these seminars more often because tenant arrears is a

problematic issue that affects the bottom line of any commercial property owner, and which needs to be handled correctly.

Comments from delegates The delegates who attended had the following to say about the workshop: ● “It was very well presented and informative.” ● “All material is relevant to my work situation, which involves managing both commercial and

residential portfolios.” ● “I had great insight on the CPA, and all legislation and regulations between the landlord and tenant.” ● “Interesting and extremely informative – it’s an eye-opener.”

Future dates for the workshop KwaZulu-Natal: 5 March 2018 Gauteng: 9 March, 1 June and 11 September 2018

DISCOUNTED COURSES: Take advantage of discounted Real Estate Courses, exclusive to SAPOA members.

Intern Logbook PoE FET: NQF Level 4 Real Estate FET: NQF Level 5 Real Estate RPL NQF4 & NQF5

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FACE-2-FACE EVENTS: Clock in your notional NQF hours at PropAcademy-facilitated events and attend webinars.

PropAcademy is SAPOA’s exclusive provider of EAAB and SSETA regulated courses.

T: 0861 111 2281 | E: info@propacademy.co.za Delegates who attended the Gauteng Tenant Arrears in Commercial Property Workshop

www.propacademy.co.za SOUTH AFRICAN PROPERTY REVIEW

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SOUTH AFRICAN PROPERTY REVIEW

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legal update

Significant step towards electronic conveyancing A significant step towards electronic conveyancing will be proposed during the first quarter of 2018 in the National Assembly of the Electronic Deeds Registration Systems Bill [B 35-2017] (“the Bill”).

The Bill was published by the Minister of Rural Development and Land Reform on 7 December 2017 and essentially consists of enabling legislation to develop an electronic deeds registration system Compiled by Johan Coetzee and Robert Burman, Fasken

Background There is a unique deeds registration system in South Africa, as security of title is not guaranteed by statute. Security of title is based on specific responsibilities assigned by the Deeds Registries Act of 1937 (“the Deeds Registries Act”) to both a conveyancer (who prepares and lodges deeds and documents) and the Registrar of Deeds, whose registration function is to assist in the highly regarded registration system to afford security of title.

Even though there is a computer system in place for the purpose of maintaining the electronic land register, the preparation and lodgement by the conveyancer as well as the processing of deeds and documents by the Registrar of Deeds currently take place manually in terms of the Deeds Registries Act. The explanatory memorandum to the Bill mentions that the Office of the Registrar of Deeds embarked on a project for the implementation of e-commerce principles in order to facilitate an Electronic Deeds Registration System (“e-DRS”), which will provide for, among other things: ● The registration of large volumes of deeds effectively; ● Improved turnaround times for providing registered deeds and documents to clients; ● Provision of country-wide access to deeds registration services; ● Enhanced accuracy of examination and registration services; ● Availability of information to the public; and ● Security features, including confidentiality, non-repudiation, integrity and availability.

Brief overview of the Bill The definitions in Section 1 of the Bill include the incorporation of a number of concepts contained in the Electronic Communications and Transactions Act of 16

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2002 (“ECT Act”), for example: ● A “deed or document” will include a data message as defined in the ECT Act “…generated, submitted, received or stored by electronic means in the electronic deeds registration system, and including scanned images of a deed or document”; ● A “signature” in respect of any act performed by a conveyancer, notary public, statutory officer or Registrar in terms of the Deeds Registries Act and Sectional Titles Act will mean advanced electronic signature as envisaged in the ECT Act. Section 2(1) of the Bill enables the Chief Registrar of Deeds, subject to the ECT Act, to develop, establish and maintain the e-DRS. Section 2(2) provides that the Chief Registrar of Deeds, after consultation with the Regulations Board (referred to in Section 9 of the Deeds Registries Act), issues directives for functional requirements, technical specifications, specifications for interfaces, standards for information security, operation of the system, processing of deeds, retention of documents and any other matter provided for in the Deeds Registries Act. In terms of Section 3 of the Bill, a deed or document generated, registered and executed electronically, scanned or otherwise incorporated in the e-DRS by electronic means will for all purposes be deemed to be the only original and valid record.

Section 4 of the Bill provides that any user of the e-DRS authorised by the regulations must be registered in the manner and under the conditions as directed by the Chief Registrar of Deeds. In this regard it is important to note that the Bill still refers to and includes the obligations of a conveyancer and notary public in terms of the Deeds Registries Act. In other words, the role of a conveyancer and notary public as envisaged in terms of

the Deeds Registries Act will be retained, unless the Deeds Registries Act and Sectional Titles Act are amended.

The remainder of the Bill deals with the power of the Minister to make regulations, transitional provisions relating to the continuation of the process until the e-DRS is in place, and the commencement dates of the Bill. The commencement dates also include that there may be different dates for different provisions in terms of any acts of registration under the Deeds Registries Act and Sectional Titles Act and for different deeds registries.

General comment The main objectives of the Bill – to develop the e-DRS to deal with larger volumes and expedite the registration of deeds – are to be welcomed. Nobody will have any issue if the e-DRS will lead to a more efficient and cost-effective deeds registration process.

It is generally known that South Africa has one of the best deeds registration systems in the world, affording security of title as a result of the specific responsibilities assigned to conveyancers and the Registrar of Deeds in terms of the Deeds Registries Act. As long as these important principles are retained, there should be no issue with the Bill.

It is still early days, but any further developments in the process of implementing the Bill should be properly considered by all parties in the real estate industry, which include developers, owners, banks and financiers.

Johan Coetzee Partner Fasken e: jcoetzee@fasken.com t: +27 11 586 6000 Robert Burman Associate Fasken e: rburman@fasken.com t: +27 11 586 6000

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legal update

Proposed amendments to the City of Cape Town Water Bylaw The City of Cape Town released its draft Water Bylaw on 15 December 2017 with a closing date of 8 January 2018. The notice and invitation for comment were issued at a time when the property industry and the city had shut down for the festive season. The question is whether the city regards this as proper public participation, or whether it is being disingenuous in trying to push this proposal through without proper participation

By Mumtaz Moola

S

APOA solicited the help of MacRobert Attorneys in Pretoria to assist with the comments to ensure that they are submitted timeously.

The comments follow below: 1.1 Definition of “city” It was submitted that the definition of “city” should be amended by deleting the words “or any structure or employee of the city acting in terms of delegated authority”.

1.2 Definition of “industry best practice norms” Best practice norms are developed with reference to certain national and international documentation. However, the definition for “industry best practice” as contained in the amendment fails to indicate in what documentation the “50% of water used” is reflected.

Furthermore, by its very nature, industry best practice changes as certain circumstances change. By defining “industry best practice norms” to a specific limit, any changes in industry best practice will require an amendment to the definition in the bylaw. In light of the above, it is recommended that the definition for “industry best practice norms” be amended to make specific reference to the documentation that sets out the industry best practice norms; and add the wording “as amended” at the end of the relevant documentation as referred to so as to ensure that the definition changes as the relevant industry best practice norms change in the future.

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1.3 Substitution for the word “Director” for “authorised official” We are of the view that the Director should remain the competent authority in respect of the following sections of the bylaw, and that the authorised official should not be empowered to exercise functions in terms of such sections for the reasons as set out below.

Section 8(2) of the bylaw: Section 4 of the amendment, which proposes amendments to Section 8(1) of the bylaw, still makes reference to “Director” and therefore Section 8(2) of the bylaw must continue to make reference to “Director”. For a person to comply with the obligation as set out in Section 8 of the bylaw, the relevant official of the city who needs to be informed in terms of such section needs to be clearly stipulated. In the event that a person is to inform an “authorised official” in terms of Section 8 of the bylaw, such person would first need to contact the city to find out who an authorised official is and then also require proof that such person is in fact an authorised official as defined in the bylaw. This would cause unnecessary delays, especially in light of the fact that the obligation pertains to “emergency” and “imminent” situations that require immediate attention, and would also place an unnecessary burden on the person acting in terms of Section 8 of the bylaw.

Sections 13(1) and 13(2) of the bylaw: Section 13 of the bylaw pertains to the supply of water and the entering into an agreement between a person and the city. We are of the view that the person

entitled to approve any application for the supply of water and to enter into an agreement on behalf of the city in respect of such supply should remain the Director. This will not only create legal certainty as to who the relevant official is to whom an application must be submitted, it will also assist in preventing any abuse of power in respect of the supply of water. As set out above, in the event that a person is to apply for the supply of water from an authorised official, such person would first be required to determine who the relevant official is and verify whether the official is an authorised official as defined in the bylaw. This places an unnecessary burden on a person making the application and may also lead to potential abuse of power in respect of the supply of water.

It is therefore recommended that the power to approve an application for the supply of water remains with the Director. This view is supported by the proposed amendment to Section 13(1) of the bylaw as set out in Section 7(a) of the amendment, which provides that the application for the supply of water is to be approved by the Director.

Sections 18(2) and 18(3) of the bylaw: As set out in paragraph 2.3.4.1, we are of the view that the Director should be the relevant city official who enters into an agreement with a person in respect of the supply of water. In such instances, the Director would be the person who can terminate such an agreement. We thus submit that the power to terminate an agreement in respect of the supply

legal update of water in terms of Section 18 of the bylaw should remain with the Director.

Section 21 of the bylaw: Section 21 of the bylaw provides for powers in respect of the communication pipe and the manner in which a water installation is to be connected. As set out in paragraph 2.3.4.1, we are of the view that the Director should remain the relevant official of the city who enters into a water supply agreement with a person.

Thus the powers prescribed in terms of Section 21 of the bylaw should remain with the Director. It should also be noted that Section 10 of the amendment, which proposes amendments to Section 21(7) of the bylaw, continues to refer to “Director”, and it would therefore be consistent to ensure that the remaining powers as set out in Section 21 of the bylaw remain with the Director.

Section 22 of the bylaw: Section 22 of the bylaw pertains to the approval for interconnection between premises.

As set out in paragraph 2.3.4.1, we are of the view that the Director should remain the relevant official of the city who enters into a water supply agreement with a person. Therefore, the powers prescribed in terms of Section 22 of the bylaw should remain with the Director.

Section 26(1) of the bylaw: Section 26 of the bylaw pertains to the interruption of supply. As set out in paragraph 2.3.4.1, we are of the view that the Director should remain the relevant official of the city who enters into a water supply agreement with a person.

Therefore, the powers prescribed in terms of Section 26(1) of the bylaw in respect of the interruption of the supply of water should remain with the Director.

Section 28 of the bylaw: Section 28 of the bylaw prescribes provisions pertaining to meters. As set out in paragraph 2.3.4.1, we are of the view that the Director should remain the relevant official of the city who enters into a water supply agreement with a person. Therefore, the powers prescribed in terms of Section 28 of the by pertaining to requirements for meters should remain with the Director.

Section 36 of the bylaw: Section 36 of

the bylaw pertains to powers to prohibit or restrict the consumption of water.

To ensure consistency and prevent any abuse of such power, it is recommended such powers remain with the Director and are not transferred to numerous authorised officials as defined in the bylaw. The prohibition and restriction of water have legal implications, especially as the right to basic supply of water is a constitutional right; thus the power to prohibit and restrict the supply of water should be limited to a certain person, such as the Director or his or her delegated official, and not to numerous authorised officials.

Section 43 of the bylaw: Section 43 of the bylaw pertains to the extension of the time period as approved in terms of Section 42 of the bylaw for new water installations or extensions of existing water installations. Section 21 of the amendment amends Section 42 of the bylaw, but such amendment retains a reference to the “Director” as the relevant official to grant the required approval. Therefore, the power in terms of Section 43 of the bylaw to grant the aforesaid extension must remain with the Director.

Section 51 of the bylaw: Section 51 of the bylaw pertains to accepted pipes and fittings in respect of water installations. To ensure consistency and prevent abuse of power in respect to what pipes and water fittings can be utilised in a water installation, it is recommended that such powers remain with the Director and are not transferred to numerous authorised officials as defined in the bylaw. Further, by the Director retaining the powers in terms of Section 51 of the bylaw, people would not be exposed to the unnecessary burden of finding out who the relevant authorised official is and to then verify that such person is in fact an authorised official as defined in the bylaw.

In light of the above, it’s recommended that Section 2 of the amendment be amended to include sections 8(2), 13(1), 13(2), 18(2), 18(3), 21, 22, 26(1), 28, 36, 43 and 51 of the bylaw as part of the exceptions, so that it reads as follows:

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SOUTH AFRICAN PROPERTY REVIEW

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legal update “The principal bylaw is hereby amended by the substitution for the word ‘Director’ wherever it appears, of the words ‘authorised official’, except in sections 3(2), 5, 7, 8(2), 13(1), 13(2), 18(2), 18(3), 21, 22, 26(1), 28, 31, 36, 43 and 51.”

1.4 Ad Section 3(a) of the amendment Section 3(a) of the amendment proposes to insert, inter alia, Section 2(1B) into the bylaw, which section refers to “other abuse of any water”.

There is no indication as to what constitutes an “abuse of water”. In order to provide clarity, it is suggested that a definition of “abuse of water” be included in the bylaw.

1.5 Ad Section 3(b) of the amendment Section 3(b) of the amendment proposes to substitute Section 2(5) of the bylaw, and provides that if the city cannot supply water to each consumer in a particular area, it must “determine an alternative manner of water supply”.

However, there is no indication as to who will be responsible for the costs associated with such an alternative water supply. Furthermore, no reference is made to Section 25(2) of the bylaw, which provides that “the city must ensure no domestic consumer is denied access to basic water services in terms of this bylaw”, which is aligned to the constitutional right of access to basic water supply. The substituted wording makes no reference to the time period in which the city is to determine the alternative manner of water supply; the time period within which the alternative manner of supply of water must be in place once determined; or the manner in which water is to be supplied pending the finalisation of the alternative manner once determined.

In light of the above, it is recommended that Section 2(5) of the bylaw be amended so as to make reference to – ● Who will be responsible for the costs of the alternative manner of water supply; ● The time period within which the city is to determine the alternative manner of water supply; 20

SOUTH AFRICAN PROPERTY REVIEW

● The time period within which the alternative manner of water supply must be implemented once determined; and ● The manner in which water will be supplied pending the implementation of the alternative manner to supply water, this bearing in mind Section 25(5) of the bylaw pertaining to basic water supply.

1.6 Ad Section 6(b) of the amendment Section 6(b) of the amendment proposes to amend Section 12(2)(b) of the bylaw; however, the word “or” should be deleted from the last part so that the proposed amended Section 12(2)(b) of the bylaw reads as follows: “…determine the volume of water for which the city can claim compensation by using the maximum flow rate of a water meter which is the same size of the pipe through which the unauthorised water was drawn, and which complies with the Legal Metrology Act No. 9 of 2014 as amended.”

1.7 Ad Section 7(a) of the amendment Section 7(a) of the amendment proposes to amend Section 13(1) of the bylaw by deleting reference to “new” premises. At face value, it appears that all premises to which water is supplied need to reapply for such water supply. We submit that this interpretation cannot hold legal muster and would lead to absurd results because it would interfere with existing rights to the supply of water. Furthermore, even if such interpretation is considered, the proposed amended Section 13(1) of the bylaw fails to include any transitional arrangements. The purpose of Section 13(1) of the bylaw is to ensure the supply of water is lawful, and is aimed at ensuring that unlawful water supply becomes lawful. It may therefore be necessary to provide clarity in this regard in the amendment to Section 13(1) of the bylaw.

Furthermore, as detailed in paragraph 2.14, we are of the view Section 52(6) of the bylaw should not be deleted as proposed in Section 29(k) of the

amendment. In such instances, it is recommended that Section 13(1) of the bylaw be made subject to Section 52(6) of the bylaw.

1.8 Ad Section 7(b) of the amendment Section 7(b) of the amendment proposes amendments to Section 13(3) of the bylaw. Section 13(3) of the bylaw, read with the proposed amendments as set out in Section 7(b) of the amendment, provides that “the owner is deemed to be the consumer for all purposes during the terms of the agreement”. This implies that, notwithstanding that the premises upon which the water is supplied may be lawfully occupied by another person, the owner will still be the consumer for “all purposes”. This is in conflict with the proposed inserted Sections 2(1A) and 2(1B) of the bylaw, which differentiate between the responsibility of the “owner” and the responsibility of the “consumer”.

Further separate definitions for each of the terms “owner” and “consumer” are provided for in the bylaw.

In light of the above, it is recommended that Section 13(3) of the bylaw be amended to read as follows – “The owner is liable for all the fees in respect of the supply of water determined in terms of the Tariff Bylaw until the supply has been interrupted at the request of the owner, or the agreement has been terminated in terms of Section 18, and the owner is deemed to be the consumer for all purposes during the term of the agreement; provided that if the consumer is a person other than the owner, such consumer will be deemed to be the consumer for all purposes during the term of the agreement.”

1.9 Ad Section 7(c) of the amendment Section 7(c) of the amendment proposes to insert a new Section 13(5A) into the bylaw, which pertains to a “temporary connection”. No provisions are included as to what is meant by a temporary connection; how such a temporary connection will be converted into a permanent connection; by when the temporary connection will be converted

legal update into a permanent connection; who is responsible for implementing such a conversion; and who is responsible for the costs associated with the conversion.

It is also not clear what the reason is for requiring a temporary connection, especially in light of the fact that the proposed Section 13(5A) of the bylaw specifically deems that the application for water supply will be for building purposes. It is submitted that it would be more cost-effective and efficient to establish a permanent connection from the beginning.

In light of the above, it is recommended that Section 7(c) of the amendment be deleted. Alternatively, it is recommended that the proposed Section 13(5A) of the bylaw be amended so as to refer to – ● The manner in which the temporary connection will be converted into a permanent connection; ● The time period within which a temporary connection will be converted into a permanent connection; ● Who will be responsible for implementing the conversion of the temporary connection to the permanent connection; and ● Who will be responsible for the costs associated with converting the temporary connection into a permanent connection.

1.10 Ad Section 11(a) of the amendment Section 11(a) of the amendment proposes the insertion of Section 24(5A) into the bylaw pertaining to the requirement for a certificate of approval in terms of the proposed Section 46B(b) of the bylaw in order to be supplied with water. We are of the view that the wording “and if no such certificate has been received, the Director may disconnect or restrict the water supply to that water installation” is superfluous. The first part of the proposed Section 24(5A) of the bylaw provides that no water will be supplied unless a certificate of approval in terms of the proposed Section 46B(b) of the bylaw is received by the city. It would therefore be impossible to “disconnect

or restrict the supply of water” to an installation for which no certificate has been received, as such an installation would not yet have been supplied with water in the first place.

Furthermore, the use of the word “may” in the wording pertaining to the powers of the Director to “disconnect or restrict the supply of water” makes such power discretionary, even though the first part is clearly pre-emptory.

Therefore, the Director would not have a choice as to whether exercise his or her power to “disconnect or restrict the supply of water”, as appears to be the case.

In light of the above, it is recommended that the words “and if no such certificate has been received, the Director may disconnect or restrict the water supply to that water installation” of the proposed Section 24(5A) of the bylaw be deleted, so that such section reads as follows: “No water installation will be supplied with water through a communication pipe which was installed to provide water for building construction purposes until the certificate of approval referred to in Section 46B(b) has been received by the city.”

1.11 Ad Section 11(c) of the amendment Section 11(c) of the amendment proposes amendments to Section 24(7) of the bylaw, which provides for the manner in which the city and the consumer can enter into an agreement for domestic water to be supplied to a premises at a pre-determined daily volume. The proposed amendments fail to indicate what happens if the consumer is replaced with another consumer; whether the new consumer is bound by the pre-determined daily volume; or how the new consumer can change the pre-determined daily volume.

It is therefore recommended that Section 24(7) of the bylaw be amended so as to include provisions pertaining to how the predetermined amount can be amended by a new consumer, including relevant time periods.

1.12 Ad Section 13(d) of the amendment Section 13(d) of the amendment proposes amendments to Section 28(9) of the bylaw by empowering the Director to install, inter alia, a “water management device”. The purpose of the powers provided for in Section 28(9) of the bylaw is to determine “the quantity of water supplied to each section, business or dwelling unit or portion of the premises”.

Thus the power to install a device in terms of Section 28(9) of the bylaw is restricted to devices for the purposes of determining the quantity of water supplied. The bylaw defines a “water management device” to mean “a device that controls the quantity of water flowing through a water meter over a certain time period”. Therefore, a water management device controls the quantity of water and does not determine the actual quantity of water supplied as required by Section 28(9) of the bylaw. Accordingly, it is submitted that the Director cannot be empowered to require the installation of a water management device in terms of Section 28(9) of the bylaw.

In light of the above, it is recommended that Section 13(d) of the amendment be amended to delete reference to “water management device”, so it amends Section 28(9) of the bylaw to read as follows: “The Director may, at the cost of the owner, install or require the installation of a private sub-meter or prepayment meter to each section, business or dwelling unit on any premises for use in determining the quantity of water supplied to each section, business or dwelling unit or portion of the premises.”

1.13 Ad Section 13(f) of the amendment Section 13(f) of the amendment proposes certain amendments to Section 28(20) of the bylaw pertaining to the supply of water to different accommodation units situated on the same premises.

We submit that proposed amendments to Section 28(20) of the bylaw could be worded better, and recommend that Section 13(f ) of the amendment be reworded so Section 28(20) of the bylaw reads as follows: SOUTH AFRICAN PROPERTY REVIEW

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legal update “Unless otherwise agreed to by the Director upon written request by the owner, person in charge or management of any premises, where the owner, person in charge or management of any premises on which several accommodation units are situated requires the supply of water to such premises for the purpose of supply to the different accommodation units or to different portions of the premises, the Director must provide and install a single meter in respect of the premises as a whole.”

1.14 Ad Section 16 of the amendment Section 16 of the amendment proposes amendments to Section 33(1) of the bylaw, but it incorrectly refers to Sections 31(3), (4) or (5) of the bylaw, which should be references to Sections 32(3), (4) or (5). Section 16 of the amendment should therefore be amended so as to refer to the correct sections.

1.15 Ad Section 23 of the amendment Section 23 of the amendment proposes amendments to Section 45 of the bylaw pertaining to copies of drawings of newly completed or altered water installations. Section 23 of the amendment refers to a certificate of approval in terms of Section 48 of the bylaw. However, a certificate of approval for newly completed or altered water installations is dealt with in Section 46B(b) of the bylaw. Therefore Section 23 of the amendment should be amended to make reference to a certificate of approval in terms of Section 46B(b) of the bylaw and not to a certificate in terms of Section 48 of the bylaw.

1.16 Ad Section 29(k) of the amendment Section 29(k) of the amendment proposes to delete Section 52(6) of the bylaw pertaining to existing supply agreements between a consumer who is not the owner and the city.

The proposed deletion would be interfering with existing rights and may be subject to legal review.

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Furthermore, the deletion fails to provide how existing agreements for the supply of water as contemplated in Section 52(6) of the bylaw will be dealt with, as there are no transitional arrangements.

It would be unreasonable to now delete an existing lawful right for the supply of water, especially since in terms of the proposed amendment to Section 13(1) of the bylaw all supply of water requires approval of an application by the owner from the city. The proposed amendment to Section 52(6) of the bylaw is such that any agreement between a consumer who is not the owner of a premises and the city will cease to have any legal standing, and the owner would immediately have to apply for the supply of water in terms of Section 13(1) of the bylaw. However, in such instances, until a decision of an application for the supply of water is approved by the city, the supply of water would be deemed unlawful, even though the supply of water had been lawful in terms of the agreement between the consumer and the city prior to the proposed amendments.

The proposed deletion of Section 52(6) of the bylaw therefore leads to absurd results. It is thus recommended that Section 52(6) of the bylaw is not deleted.

1.17 Ad Section 33(c) of the amendment Section 33(c) of the amendment proposes amendments to Section 56(3) of the bylaw pertaining to the notification of an alternative water source. The amendments are such that instead of the owner providing certain particulars as to the alternative water source on the request of the Director, the obligation to provide the particulars is no longer subject to a request from the Director. The section, however, fails to provide any indication as to what “particulars” are to be provided, which particulars would previously have been clearly set out in the request from the Director. There is also no indication as to the time period within which an owner is to provide the “particulars”.

It is recommended that the amendments to Section 56(3) of the bylaw are such that the obligation to provide particulars on an alternative water source is made upon the request by the Director. This will entitle the Director to request all the relevant particulars that are deemed necessary. Alternatively, it is recommended the amendments are such that it is clearly stipulated what particulars are to be provided and the time period within which the particulars are to be provided.

Proposed Section 56(3) of the bylaw also appears to be a repeat of the reporting obligations as set out in Section 58(4) of the bylaw as proposed to be amended by Section 35(a) of the amendment. Section 58(4) of the bylaw is such that the Director can request certain information about a borehole, well and wellpoint, which sources of water are included in the definition for an “alternative water source” as set out in the bylaw, while Section 56(3) of the bylaw requires an owner to provide “particulars” of alternative water sources.

It is recommended that it be ensured there is consistency between Section 58(4) of the bylaw and Section 56(3) of the bylaw, and the manner in which relevant information/particulars are to be obtained by the City. It is also recommended that to the extent possible, any duplication in the information/particulars to be provided does not amount to duplication.

1.18 Ad Section 34(d) of the amendment Section 34(d) of the amendment proposes the insertion of Section 57(d) of the bylaw pertaining to the requirement to register a well, borehole, wellpoint and excavation.

There is no provision for transitional arrangements in respect of existing wells, boreholes, wellpoints or excavations, or the time frame within which registration is to take place. It is also not clear what is meant by “re-registration”, and no indication of when such circumstances will arise is provided.

legal update In the latter regard, it would seem that once a well, borehole, wellpoint or excavation is registered, there would be no need to re-register, bearing in mind that the current bylaw does not provide for any registering requirements.

It is recommended that the proposed Section 57(d) of the bylaw be amended so as to clearly provide for transitional arrangements in respect of registration, and furthermore clearly indicates the circumstances when re-registration is to occur, as well as associated time frames

1.19 Ad Section 35(a) of the amendment Paragraph 35(a) of the amendment proposes certain amendments to Section 58(4) of the bylaw. As set out in paragraph 2.17, it is recommended the amendments ensure consistency between Section 58(4) and Section 56(3) of the bylaw.

1.20 Ad Section 40 of the amendment Section 40 of the amendment proposes certain amendments to Section 64 of the bylaw pertaining to offences and penalties. However, the proposed amendment to the wording at the end of Section 64 of the bylaw does not read well, and it is recommended that Section 40 of the amendment be reworded so the amendment proposed to the last part of Section 64 of the bylaw reads as follows: “…is guilty of an offence and is liable, upon conviction, to a fine or to a period of imprisonment not exceeding five years or to both such fine and period of imprisonment.”

COMMENTS ON THE BYLAW Ad Sections 24 and 25 of the bylaw Reference in Sections 24 and 25 of the bylaw to “basic water services” should be amended to refer to “basic water supply”

since this is the term that is defined in the bylaw.

Ad Schedule 1 of the bylaw In terms of Section 2(3) of the bylaw, “no owner is required to comply with this bylaw by altering a water installation or part thereof which was installed in conformity with any law applicable immediately before the date of commencement of this bylaw except for the provisions of Section 3(1) and item 15 of Schedule 1”.

Thus in terms of Section 2(3) of the bylaw, an owner is required to comply with item 15 of Schedule 1, pertaining to automatic flushing cisterns fitted to urinals. However, there is no time period stipulated. It is recommended item 15 of Schedule 1 be amended to refer to the time period, calculated from the date of amendment of the bylaw, within which a person is to comply with such item.

When private-public partnership works! Meet the entrepreneurs who benefit.

The Department of Small Business Development (DSBD) and Property Point have joined forces to take 16 small to medium-sized, black-owned, businesses, through a life-changing enterprise development programme. This programme will provide bespoke business interventions and facilitate access to markets in order to catalyse business growth and sustainability.

Meet Malusi Ndebele, Technical Services Director and founder of VM Refrigeration, AirConditioning and Electrical projects (VM Refrigeration). The company was formally established in 2015 by Malusi and his wife Gugulethu Ndebele. Malusi realised that all of the skills and knowledge used to add value to his employer could be used to start something of his own. ‘’After six years of working at SANBS, and saving the company thousands of Rands through the conversion of outsourced maintenance services to in-house solutions, a realisation occurred that I could utilise the skills and knowledge acquired to build my own business’’ explains Malusi.

He admits that starting a business is no easy task, ‘’When I started I had an old Nissan 1400 bakkie as the only form of transport with its limited carrying capacity.’’ He explains that in the beginning access to finance in order to purchase air-conditioning units was a challenge, and he and his wife had to part with their BMW to purchase their first air-conditioner. Today VM Refrigeration has a turn-over of R2.4 million for the financial year ending 2017, up from less than R200k in 2015, and has a staff contingent of five full-time employees and two part-time workers. When asked about the value of the Property Point and DSBD programme, Malusi explains, ‘’I would recommend this programme to any fellow entrepreneur with the drive to grow. The knowledge acquired has enabled me to develop and set-up systems that assist in the management of my business.’’

Property Point is a Growthpoint Properties initiative which provides entrepreneurs with the skills and personal development support they need to develop their enterprises into fully independent companies.

For more information on VM Refrigeration, contact Malusi on Malusi.Ndebele@vmrefrigeration.co.za or visit www.vmrefrigeration.co.za

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legal online

Allira chatbot brings legal services to people least able to afford them As bots and artificial intelligence (AI) tools are increasingly able to provide in-depth analysis and advice in all kinds of settings, a law firm in Australia has made the best use of recently developed technology Source: Cliquesters

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he bot known as “Allira” – short for Artificially Intelligent Legal Information Resource Assistant – is an advanced technological tool that offers users advice on a number of legal matters within seconds. This allows them to have the law at their fingertips without having to pay for often-expensive consultations with human lawyers.

Meet Allira Allira is an AI tool developed in the last 12 months by Adelaide, Australia-based tax lawyer Adrian Cartland and his law firm Cartland Law. Its system functions similarly to a chatbot, asking questions of users via text or speech, and analysing the information provided by those users to generate appropriate legal documents automatically.

In an interview with ABC, Logan Turnbull, one of the clients using the technology, said, “It was really easy – just input basic details and it does the whole thing for you. It only took about 15 minutes for each will, so it was really speedy.”

It is rumoured that after just 30 minutes of training and using Allira, Cartland’s girlfriend, Sarah, was able to score 73% on a first-year university tax exam, having no prior professional tax background.

Allira is designed to provide an affordable advice on basic matters related to consumer law, including business structuring, asset protection and tax-related issues.

“People who really need access to justice are the people who can least afford it,” Cartland told ABC. “Why not 24

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bring a law firm without lawyers right to people who would expect to get this in 10 years’ time?”

Cartland says Allira’s services cost a fraction of what clients would pay if they sought the same advice from a human lawyer. The software can be accessed online, from anywhere in the world. “People in low socioeconomic areas, people who can’t afford to see lawyers or who have limited resources – they’re the people we want to help the most,” he says.

Cartland is planning to link the service with legal-aid organisations that operate in rural and remote areas inhabited by some of the people most in need of affordable legal advice.

“There is a huge untapped demand for legal services,” he says. “By reducing the price and bringing access to justice, we can benefit the consumer and the legal profession.”

Cartland created Allira using a patented machine-learning algorithm devised by cloud-based enterprise search firm Enlyton. The algorithm can “learn” complex information quickly, without a need for training. He fed the algorithm millions of documents from tax-law databases, legislation, rulings and ATO private rulings, then tested Allira on basic legal tax questions.

After finding that Allira was able to answer most complex tax questions, Cartland employed developers to make some final tweaks in December 2017.

A growing team of international lawyer bots Allira is already being used by several legal companies in Australia, including

the boutique law firm Waterhouse Lawyers in Sydney. Cartland’s company also received a AUS$20 000 grant from the Australian government to build a similar tool to cover domesticviolence law.

Allira has recently shifted from being a legal tool for professionals and legal firms only, to also assisting individual citizens directly on a number of basic legal matters.

The system is a new player in the AI legal landscape, which already includes services such as DoNotPay (a Facebook Messenger chatbot designed to assist users on a broad range of legal matters) and Advobot, a new bot used by corporate firms.

AI tools and lawyer bots are gaining popularity in the legal sector, and this is likely to increase further in future. Yet Cartland believes that real-life human lawyers remain necessary to complete more advanced legal procedures.

“Empathy, creativity, contextual reasoning – that’s what humans are good at and what we enjoy doing, and people are happy to pay when they get that,” he told ABC. “Robots can do the same thing again and again really well; what they’re less good at is thinking outside the box and coming up with something totally new.”

For this reason, Cartland feels the best solutions should integrate AI tools with the work carried out by human lawyers, in order to refer clients to law firms when problems become too complex or require a more intuitive and experienced approach. www.abc.net.au

legal online

Norton Rose Fulbright launches first Australian law firm chatbot to help manage data breach At the end of December 2017, global law firm Norton Rose Fulbright announced the launch of “Parker” – the first Australian law firm chatbot to respond to queries on privacy law

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reated by two of Norton Rose Fulbright’s technology lawyers, partner Nick Abrahams and associate Edward Odendaal, Parker was built to help businesses respond to a major change in Australian law: the introduction of a mandatory data breach notification regime that came into effect on 22 February 2018.

From that date, any businesses that fail to notify their customers about a possible data breach could be liable for civil penalty orders from the Privacy Commissioner of up to AUS$2,1-million for organisations, and up to AUS$420 000 for individuals.

Parker was built in-house by the firm using the IBM Watson AI platform, following discussions with LawPath, a new law business and strategic alliance partner of Norton Rose Fulbright.

The chatbot allows users to find quick and informative answers to Australian privacy law questions, including whether a potential data breach incident will be subject to the new regime. You can chat to Parker on the firm’s website.

Parker uses natural language processing and can answer a variety of questions.

These include: ●● Is a particular data breach notifiable? ●● What is personal information? ●● Is my organisation subject to the Privacy Act? ●● What are my obligations under the new law? ●● What are the penalties for not complying?

“Parker shows how far artificial intelligence has come in a short period,” says Norton Rose Fulbright Asia-Pacific Head of Technology and Innovation Nick Abrahams. “Chatbots are an early usecase for AI, and we wanted to see how we can use legal AI to assist our clients.

“Parker is a great example of three of our strategies coming together. One, we are committed to using cutting-edge technology to enhance the services we provide to our clients. Two, we look to collaborate with innovative companies such as LawPath to identify those technologies. Three, we want to unlock the energy and creativity of Millennials in our firm. I was fortunate that a member of my team – associate Edward Odendaal – has a keen interest in coding and helped me with developing Parker.

“Our early conversations with clients have shown a strong interest in this offering, which is unsurprising given how close we were to the beginning of the mandatory data breach notification regime. Several clients have also expressed an interest in producing their own legal chatbots, and we are looking to assist them with their projects.

Chatbots can be used by an in-house team to answer a lot of the standard questions that come from the business, freeing up the lawyers for more productive work. Best of all, you can build a bot without the need for the IT department to be involved as it is 85% legal domain knowledge and only 15% programming skill.”

The launch of the chatbot follows the release in April 2017 of a range of fixedprice packages by the firm to help organisations prepare for the new regime and ensure privacy compliance, manage their supply chain for potential liabilities and prepare for a breach.

The firm’s broader Australian privacy team is focused on providing clients with an end-to-end service, from seeking preliminary information via Parker and providing fit-for-purpose packages, to 24/7 incident response in case of a data breach.

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legal chat

Commercial property: what to look out for when considering a purchase New entrants to the property scene often ask how they should go about buying a commercial property. We turn to Lucia Erasmus of Cliffe Dekker Hofmeyr for answers Words by Mark Pettipher

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roper due diligence is the first thing Lucia Erasmus, Director of Real Estate at Cliffe Dekker Hofmeyr, talks about.

“You need to understand why you’re buying the property,” she says. “Is it to be redeveloped, or just an income stream?

“A commercial building will likely have tenants, so the first thing that needs to be checked is whether there are any onerous provisions in the lease agreement such as a right of pre-emption, which may delay and complicate any plans you may have for the property. Also check that all rates and taxes are up to date and that tenants are not in breach of any provisions of the lease agreement.

“After obtaining a copy of the title deed and zoning certificate, the attorneys will ensure there are no restrictions, onerous conditions, attachments or interdicts affecting the property. In short, you must be aware of what your ownership entails and what obligations you will have as the landlord.

“On the more technical side, an engineer will assist you with technical due diligence aspects. It’s not something we as a law firm carry out. With the help of a structural engineer, the structural integrity of the building should be investigated. You also need to ensure that there are approved building plans, an occupation certificate, an electrical compliance certificate and a fire safety certificate.

“All buildings require maintenance, so it is prudent to ask for maintenance schedules, plans and management agreements that may be in place.”

If you decide to redevelop…

“First, check whether the building is more than 60 years old – there may heritage issues. Also check the zoning and ensure the bulk and other land use rights you 26

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have are adequate for the intended redevelopment. Don’t forget to get a demolition permit from the municipality.

“To be on the safe side, investigate whether there are any land claim issues. It’s unlikely if the building is in a developed area – but if you’re purchasing a building constructed on land that’s classified as agricultural, make sure that planning permission is in place.”

Commercial property as a revenue stream “Protect yourself with a sound feasibility study performed by a quantity surveyor or an accountant to ensure that the rental income will deliver the expected return on your investment. If you’re looking for funding from a bank, the bank will require a percentage of the building to be leased before lending you money for the project.

“To get a better revenue stream, you may decide that an office building would do better as a residential project. Again, check the zoning requirements – and make sure there are no objections. Your town planner will help with this.

“Developing and upgrading an existing building will benefit from compliance to South Africa’s green building codes, and will go a long way in proving to a lender that you intend to improve the building.

“Once you’ve taken ownership of the building, consider how you will manage it. In most cases, a building manager or a property management service takes care of the tenants. By appointing an experienced property manager or company, you start to mitigate your risk.

“Mitigating risk could also mean that you have prepaid water and electricity systems installed. This will help create awareness among tenants – they will be aware of their responsibilities as the endusers who must pay.”

Leasing the property “In this demand-driven environment, all leases are negotiable. Potential tenants may want shorter lease agreements, and may even want to know your B-BEEE status so they can improve their B-BEEE status.

“From a tenant’s point of view, once a lease agreement is signed, it is difficult to get out of it. Landlords require a deposit (and possibly surety); a tenant should provide for the ability to sublet or assign the lease agreement or a part of it (which most landlords discourage), and a clause stipulating they’ll get interest, and that the deposit will be refunded within a certain time period once the lease has ended.

“With short leases, a tenant may wish to include a clause stating they have the option to renew at the same terms and conditions. In longer leases, a rent-review clause helps to protect both parties.

“Prior to lease commencement, the landlord and tenant should inspect the building together, then draw up a list of identified defects to prevent disputes at the end of the lease when the tenant has to return the building in good order (fair wear and tear excepted). It should also be clear whether the tenant’s obligation to maintain and repair the premises includes the replacement of an item of which the useful life has expired. Landlords usually include a clause stating that they are not responsible for consequential damage to the building that occurs via storm damage and acts of God. The tenant is required to insure the contents of the premises.”

t: +27 (0)11 562 1082 f: +27 (0)11 562 1682 lucia.erasmus@cdhlegal.com

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The real estate legal partner for your business. cliffedekkerhofmeyr.com

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development – Western Cape

E.A.T:

fundamental to economic development There are three important factors that play a role in any province’s development, be it in the property industry or in the economy as a whole. These factors are energy, agriculture and tourism Words by Mark Pettipher

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Deon van Zyl, Chairman of the Western Cape Property Development Forum

“This has had a R1,5billion knock-on effect on the municipality’s coffers, which has put a strain on its fiscal policy.

Here lies an opportunity: the private sector is willing – and able – to come to the city’s aid” 28

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an Ki-moon is quoted as saying that “Climate change, demographics, water, food, energy, global health, women’s empowerment – these issues are all intertwined. We cannot look at one strand in isolation. Instead, we must examine how these strands are woven together.”

Beginning on a philosophical note seems fitting for this article as I head to my interview with Deon van Zyl, Chairman of the Western Cape Property Development Forum. While a large part of my chat with him is reflective, on the whole the discussion is upbeat and positive. Water is a long-term issue and something that the government has known about for a while – but there’s something positive that’s coming out of this natural national disaster.

“The property market is cyclical” says Van Zyl, putting the water crisis into perspective, “and so is our rainy season.

South Africans haven’t yet made peace with the fact that, as a country, we are in a water deficit.

“We bounce from one crisis to another, and this is what makes us South Africans resilient. Last year it was energy – and as an industry, the property sector adapted.

This year it is water, which will have a knock-on effect on our agricultural and tourism sectors.

“In terms of the three aspects that our economy needs to survive – energy, agriculture and tourism – we’ll see some beneficial changes in how we go about our business. Let’s look at the areas that will go some way towards answering the question of the water crisis, the market

response, the construction sector/ developers’ response and statute’s response.

“According to John Loos, FNB’s property economist, it’s a myth that people are turning away from buying property in the Western Cape because of the drought. Property prices in the province are actually rising because there’s a demand resulting from, among other things, semi-gration, lifestyle choices and a perception of better municipal governance.”

Van Zyl illustrates our ability to adapt as consumers – “apparent in the way that Capetonians are heeding the call to save water and reduce usage. We can see that people are adapting, and realising they can live life with less water.

“This has had a R1,5-billion knockon effect on the municipality’s coffers, which has put a strain on its fiscal policy.

Here lies an opportunity: the private sector is willing – and able – to come to the city’s aid.”

“Having said that, the question we all ask is, ‘What is the city doing in terms of legislation and incentives to induce us as developers to come to the rescue?’ After all, Cape Town’s Executive Mayor Patricia de Lille did say they were looking into ways for the city to facilitate and encourage cooperation, but not to rely solely on the private sector. Granted, that wasn’t about the water crisis – it was aimed at the private sector helping with the housing issue. Nonetheless, it is just as valid to the question of water security.”

“If we look at developments on the

development – Western Cape whole, there is a great innovative opportunity to be had, especially when it comes to the thinking behind the design strategy and how we go about executing our developments. From the outset of a development process, we are beginning to think differently, for example by incorporating grey water tanks. (Depending on the system incorporated, up to 80% of water can be reused.) A simple decision such as putting only showers into residential developments instead of baths will have a bearing not only on a development’s bottom line but its water consumption as well. This will become second nature to us, as did the incorporation of energyefficient systems, solar panels, energyefficient lighting and so on.”

Recently, some of our hotel chains have been turning away from municipal potable water. According to a report in the Sunday Times, Tsogo Chief Operating Officer Ravi Nadasen said that Tsogo Sun is planning to build a desalination plant to help its Cape Town hotels with their own water. The alternative source of water should be in operation for the properties (including the five-star Westin) by early March, which is comfortably ahead of the scheduled July date for Day Zero, when city authorities are threatening to turn off water supply to the taps in residential suburbs.

“As far as construction goes, there is a need for the concrete and cement manufacturers and suppliers to look at ways of saving water,” says Van Zyl. “The concrete industry is highly competitive, and the bigger players are looking at ways to use recycled and treated effluent.

“However, unless the city is prepared to guarantee that recycled water is fit for construction purposes, you will find that some construction companies will probably take short cuts, which could have an adverse effect on the structural integrity of buildings.

“Furthermore, the government needs to ensure that there is protection for the construction industry. This is to safeguard the economic aspect of the industry. The construction industry is one of the quickest ways to get money into the hands of the underprivileged sector of our society.”

The construction industry contributes about nine percent in formal employment and 17% in informal employment, according to the “Construction Industry Development Board Report” for Q3 2015.

We are told by the City of Cape Town that there are a number of future watersupply options being explored. The Western Cape Water Reconciliation strategy, which was updated in April 2016, shows that other potential surface and groundwater interventions are being studied and planned: ●● The Voёlvlei Pump Scheme Phase 1 from Berg River (2019) – average of 23Mm3/a (4m3/s rate) ●● Deep aquifer TMG groundwater augmentation (2017-2019+, progressive) +/- 50Mm3 ●● Cape Flats aquifer alluvial groundwater (2017-2019+, progressive) +/- 30Mm3 ●● Local reuse of treated water and desalination (2017-2019, progressive) ●● The raising of lower Steenbras Dam, with possible further phases of the existing transfer scheme from the Palmiet River to the Steenbras Dams in a partnership with Eskom ●● Mitchell’s Pass diversion (Upper Breede) in augmentation of the Voëlvlei Dam (Phase 2).

Van Zyl further puts out a challenge to the city’s development committees of developing specifications for planning that would be acceptable to the city, thus

helping developers to work on integrated package plants, where owners and developers incorporate services such as recycling plants and grey water systems into their buildings and landscaping of common areas.

Water and the agricultural industry Given that the background to our discussion is about water and its effect on the economy, the agricultural sector plays a huge contributory role. Overall employment in agriculture in South Africa was reported to be 5,59% according to a 2015 Work Bank report. The Western Cape contributes 24% to total GDP in South Africa. Agriculture has a total contribution to the GDP of the Western Cape of about four percent. What is significant to note is that agriculture and agro-processing are responsible for 18% of employment opportunities in the province.

In the latter part of 2017, it was reported by News24 that there could be unrest in the Western Cape: about 50 000 jobs were predicted to be shed as farmers cut back on planting and harvesting to save water. The report quoted Graham Paulse, Head of Department in the Western Cape’s Department of Cooperative Governance and Traditional Affairs, as saying that R40-million had already been lost.

Winter cereal production in 2017 showed decreases of 32% for wheat, 21% for barley and four percent for canola. The production of stone fruit is estimated to have decreased this season by nine to 20%, which has lead to a R750-million loss in SOUTH AFRICAN PROPERTY REVIEW

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revenue on fruit. Production of table grapes has so far decreased by between seven and 13% (still slightly above its fiveyear average). To date, there’s been a five percent reduction in wine production, which has led to a R525-million loss in the value chain.

“The drought will have the biggest impact on seasonal employment in the fruit industry,” says Dawie Maree, Head of Information and Marketing at FNB AgriBusiness. “As a result of possible lower production, fewer seasonal workers may be employed, with obvious socioeconomic consequences related to a lower number of those employed. For Q1, there were 215 000 employees in the agri sector in the Western Cape. That’s 14,2% less than Q4 of 2016. A large percentage of these are the result of seasonality, but it is 5,9% less than the same period in 2016 (228 000) – a consequence of the drought. The Western Cape has the biggest agricultural workforce in South Africa at 24,5%.

“We must keep in mind that, although agriculture only makes up about 5,5% of the sector when compared to other industries, the majority of agriculture production (in excess of 70%) gets used by the manufacturing industry – and the Western Cape is a key contributor to this.

Should agriculture suffer, the whole value chain will suffer.”

Effects of the drought on the energy sector A World Economic Forum discussion shows that electricity generation is a significant consumer of water: it consumes more than five times as much water globally as domestic uses (drinking, preparing food, bathing, washing clothes and dishes, 30

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flushing toilets and the rest) and more than five times as much water globally as industrial production. About five percent of the country’s electricity is generated by hydroelectric and pumped storage schemes. Almost 90% of South Africa’s electricity comes from coal-fired power plants, each consuming large amounts of water – as does the mining of the coal.

The Western Cape’s energy supply is dominated by conventional technologies and fossil fuels. However, the province is rich in renewable energy sources such as sun, wind and wave power, and is already producing alternative energy from water and nuclear power. As such, the lack of water in the Western Cape does not adversely affect energy production. The Koeberg nuclear power station outside Cape Town uses a pressurised water reactor, drawing water from the sea to be used in cooling and steam generation.

Impact on tourism Every year, 1,6-million people visit the Western Cape, spending close to R40billion in the local economy and supporting approximately 300 000 jobs around the province.

“We have been informed by our members that they’ve been receiving cancellations from both international and domestic travellers,” says Cape Town Tourism CEO Enver Duminy. “Prospective visitors have questions, and they’re looking for clarity regarding the water crisis and contingency plans for Day Zero. As long as there is uncertainty about the water crisis, there will be an impact.”

In addition to the hotels, other tourism businesses are acutely aware of the need for water conservation. “There is adequate water for tourists’ essential daily needs such as washing, using the toilet, and daily hygiene,” says Tim Harris, CEO of Wesgro. “In the event of Day Zero materialising, water will be severely rationed. At present, water restrictions are in place in the City of Cape Town, and residents and tourists are requested to adhere to them. Cape Town is, however, open for business. We are confident that Day Zero can be avoided if every person and business helps to save water, and sticks to their allocation in terms of the Level 6B restrictions. Already Capetonians have cut their collective consumption by more than half in the past three years – this is a remarkable achievement that demonstrates our resilience.

“Most tourism establishments have put in place various measures to ensure that their water usage is reduced, and many have developed plans for alternative supplies. All major events have proactively put in place plans to ensure that they have a zero (or heavily reduced) water footprint, for example by bringing in water from outside of Cape Town and the Western Cape.”

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developer’s response

Reduce, reuse and find alternative supplies Miguel Rodrigues, Rabie’s Director responsible for new residential developments, talks to Property Review about the company’s strategy for sustainable water usage in Century City and on the multiple development sites it has under construction in Cape Town Words by Mark Pettipher

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Miguel Rodrigues, Rabie’s Director – New Residential Developments

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ith the City of Cape Town facing serious drought conditions, the Rabie board resolved that the group’s developments had to be safeguarded and kept running – no matter what.

“Before the city could tell us we couldn’t continue development because of a lack of water, we mandated ourselves to stop relying on the city’s potable water by year-end,” says Rodrigues. “This was at the beginning of the third quarter of 2017. By the end of the year, we were 80% off-grid – and almost totally off by the end of January.

“We have three main development areas in Cape Town, each with multiple sites. Through regular site audits, the careful monitoring of water usage and consultation with all our professional teams and contractors, we have created a platform where we can ‘tap into’ our

shared intelligence and come up with ideas and ways on how we can streamline and reduce our reliance on potable water.

“We worked very closely with water engineers from leading firms, and ran studies and analyses on our current developments at Century City, which is our flagship 250-hectare mixed-use development. Century City is lucky enough to have access to both groundwater and treated effluent. The sumps in the basements of some of our sites discharge up to eight litres of water per second. This would ordinarily be discharged into our storm-water system, which is connected to the eight kilometres of canals within Century City.

The civil and building contractors have access to this water – it’s literally sitting under their feet.

developer’s response “We tested the groundwater from our Century City sites. As expected, it turned out to be saline so it cannot be used in any wet trades – but it can be used for many other functions, such as dust control and flushing toilets.

“We have a dedicated pipeline to the city’s Potsdam treatment plant. This gives us access to 4 000kl per day of treated effluent, which is 100% compliant for all building activities but cannot be used for washing or drinking.

“What is paramount to us is the welfare of our construction crews. We don’t want them to be exposed to dangerous bacteria that may come from recycled water, so we make sure there is potable water on site for drinking and washing of hands. We only use treated effluent for all our wet work on site, such as compacting ground for foundations and roads. All our concrete, formworks and precast comes from outside suppliers – and our suppliers, such as Lafarge, are already using guaranteed treated water for their concrete and cement products.”

Every site in Century City has a treated draw point for treated effluent, so much of the water needed by contractors is readily available. Big Ben Construction uses grey water-filled bowsers from the draw points to take water to other construction sites outside

Rabie has introduced stringent water-saving measures

“By changing attitudes and mind-sets, WBHO has reduced the daily cumulative consumption from 62 000 litres to just under 26 000. A simple process of putting buckets under wash points for cleaning of brushes and tools, then using that same water to flush the on-site toilets, has contributed to this massive reduction” of Century City, such as Burgundy Estate and Clara Anna Fontein.

One of Rabie’s other contractors, WBHO, has considerably reduced its water requirements. “By changing attitudes and mind-sets, WBHO has reduced the daily cumulative consumption from 000 litres to just under 26 000,” 62 says Rodrigues. “A simple process of putting buckets under wash points for cleaning of brushes and tools,

then using that same water to flush the on-site toilets, has contributed to this massive reduction.

“Everything we do now, apart from short-term crisis management, is aimed at reducing consumption. Our responsibility is to encourage and educate our consumers to develop and implement better practices in the workplace. We experienced something similar with the recent energy crisis – it prompted us to design more energy-efficient buildings, which have now become the norm.

Now we need to do the same with our water conservation and delivery. We are implementing numerous reduction and reuse measures in all our new builds, both residential and commercial. By using recycled water to run the airconditioning systems on some of the larger commercial buildings, we can save upwards of 40kl of drinking water per month. We are also standardising the design specifications in all our new developments to include dual plumbing for grey water to flush toilets.”

As an example, Rodrigues cites one of the new schemes going up at Burgundy Estate, Hazelwood – the scheme has a dual flushing system in place that will show a future saving of about twomillion litres of drinking water per year.

“That is just for one development,” he says. “If you look at the cumulative effect going forward, the results are astounding. In short, we have taken on the policy of ‘no more flushing drinking water down the toilet’.”

He says the only way sustainability can be achieved with buildings is to take on the notion of reducing consumption, reusing water and seeking alternative supplies such as rainwater harvesting.

Sinking boreholes is not seen as a sustainable solution.

“When it comes to water and energy supply, we cannot rely solely on alternative supplies. Developments have to be able to bypass alternative supplies and connect to the municipal potable supply in the event of nondelivery. Basically, the private sector has to provide short-term solutions until the relevant government bodies deliver long-term solutions.”

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sustainable education

Greenovate Awards: a bridge between university and industry The award-winning programme Greenovate was born five years ago. Property Review speaks to Tegan Cathrall, Sustainability Manager at Growthpoint Properties, about the programme’s progress and objectives Words by Mark Pettipher

Tegan Cathrall, Growthpoint Properties’ Sustainability Manager

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rowthpoint Properties and the Green Building Council of South Africa (GBCSA) initiated this joint project to explore ideas for the development and establishment of a student awards programme. The programme would develop innovative ideas to aid and initiate sustainable green practices in the property industry, and bridge the gap between education and industry to enable graduates to work on a thesis that’s relevant to the property industry.

The first Greenovate Awards were held in 2015, and were run in conjunction with the University of Cape Town, the University of the Witwatersrand and the University of Pretoria. This has now extended to eight universities.

The main intention behind the programme is to expose students to key focus areas concerning sustainability in the industry, and introduce the industry 34

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to the available talent. The programme also acts as a platform for Growthpoint Properties to aid in the recruitment of prospective students for graduate programmes and internships (not only for Growthpoint Properties but also for other industry players), culminating in potential job opportunities.

Essentially, the awards programme assists students in entering the market as advocates for green building, with a passion to create better and more sustainable cities, towns, neighbourhoods and communities.

Initially, the Greenovate Awards competition targeted students in their honours year of studies in the property, construction and quantity surveying departments. Two years ago, the field was expanded to incorporate engineering and civil engineering, as well as mechanical, electrical and electronic engineering.

The two disciplines form the foundation of the programme. While different in nature, engineering focuses on producing products and qualitative data; property focuses on quantitative issues and data.

Students are encouraged to think outside of the norm. As young, fresh minds, they are not constrained by corporate and in-house limitations and influences. They have a chance to be completely free thinkers and generate innovative ideas in unconstrained and abstract ways to come up with industryrelevant solutions.

The programme administrators work with the universities to suggest areas of research that are relevant to the property industry, and that fall within

the students’ area of learning. The first round of the competition takes place internally, i.e. within each university – the internal selection and judging process is therefore left entirely up to each institution’s discretion. Each university’s panel selects the top two projects submitted by participating student groups. There are currently 32 entries into the awards.

The top two projects from each university are invited to advance to the second round, which takes place in Johannesburg. These top groups – the finalists – present to an external panel of judges consisting of industry experts, and compete against one another for a grand prize of R30 000.

Furthermore, each winner gets three industry-related terra firma courses, such as Property Management or Property Development.

Another exciting outcome for the winners is that they are offered the opportunity to be mentored on how to get their work into a presentation format, to be presented at the GBCSA Convention that is held in November of every year.

Each year between February and April, the Greenovate Awards team heads out on a road show to participating universities, handing out literature and presenting the programme registrants and students.

For more information, contact Tegan Cathrall or the HR department at Growthpoint Properties, or visit the Growthpoint Properties website: www.growthpoint.co.za.

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SOUTH AFRICAN PROPERTY REVIEW

drought update

City of Cape Town Water Bylaw 2010 and Water Amendment Bylaw 2017:

know your water regulations

We open a tap, and we expect clean drinking water to flow. If there were no water, there would be no life on earth. As Leonardo da Vinci said, water is the driving force of all nature – and we cannot survive without it

By Ines Esmeraldo, Esmeraldo & Associates (Attorneys at Law)

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s a result of inadequate rainfall and declining dam levels, the Western Cape has reached a severe drought.

Cape Town’s dams are nearly empty. In February 2018, the City of Cape Town implemented Level 6B water restrictions in an attempt to prevent Day Zero – the day when the last drops of water in our reserves will be completely depleted, leaving our taps dry and having a negative impact on our environment, health, economy and civil society.

As residents, we understand there’s a water crisis and have lessened our water use. But the overall usage is still too high.

Level 6B water restrictions are the result of our usage not declining to required levels. Whether we like it or not, all of us in the Western Cape must acknowledge the danger we’re facing.

You may have heard about the Water Bylaw 2010 and the Water Amendment Bylaw 2017 – but do you understand what they are about? Read on to get to grips with the legislation, and the consequences thereof.

1 Water management devices Level 6B restrictions are now in place.

They are stricter, and are designed to manage those of us who use more municipal drinking water than the specified limits. Excessive users will be prioritised for enforcement through having water management devices installed.

The Water Bylaw allows the City of Cape Town, at the cost of the owner of the property, to install or require the installation of metering for any unit in a complex or property. This system will help City of Cape Town customers 36

SOUTH AFRICAN PROPERTY REVIEW

save water and manage their monthly water bills, and will help the City of Cape Town manage debt.

Water management devices will help property owners discover leaks and have them fixed, instead of ending up with an enormous water bill and being incapable of paying it.

2 Residential properties 2.1 Limit Any person, whether at work, home, school or elsewhere, is limited to 50 litres or less per day.

2.2 Landlords and tenants Properties with a higher number of tenants can justifiably use more water than properties with fewer occupants.

Any household can apply for an increase in its daily apportionment of water to be in line with the number of tenants occupying the residential property.

Property owners of leased property are accountable for all water fixings on the property, while the tenant is responsible for consumption or misuse of water. Should there be a leak or any other problems involving the water usage, it is the owner’s obligation to hire a registered plumber to attend to the problem, at the owner’s fee.

2.3 Sectional title owners Unfortunately, although sectional title owners have made attempts to save water, they could still be penalised if others in their complex continue to be wasteful.

The city will monitor residential complexes to gather information about the number of units in each complex

that will be prioritised for enforcement.

Depending on the circumstances, this may include fines and/or the installation of a water management device at the cost of the account holder.

Cluster developments with units where the number of occupants necessitates higher usage are encouraged to apply for a quota increase.

2.4 Bodies corporate and homeowners’ associations Bodies corporate and homeowners’ associations have a duty to encourage water saving and, where necessary, take action against unit holders who misuse water. Where possible, submetering ought be fitted in order to monitor the usage of all distinct units.

3 Commercial, industrial and other non-residential properties All non-residential water users are required to use less than 45% of their pre-drought billings. This usage will be equated to the equivalent period in 2015. Fines will be issued for every month in which the 45% reduction is not achieved.

3.1 Business owners A business’s consumption could increase above the 45% threshold as a result of growing demand or increase in business relations from 2015. To expect such businesses to use less than their 2015 usage could be unrealistic. Should an increase in usage be required, nonresidential customers may motivate for this by means of an affidavit to the City of Cape Town so their allocation is increased beyond 45% reduction limits.

drought update 3.2 Agricultural landowners All agricultural users are to reduce usage by 60%, equated with the equivalent period in 2015 (pre-drought). Changes in the agriculture sector will affect all spheres of residents – this is one of our primary sectors, fulfilling our need for sustainable food sources and a sustainable economy. Fines will not be dispensed based on projected appraisals, only on actual readings or where a problem arose with the meter.

4 Fines Although water charges will increase to force consumers to use less water, the question remains whether this will be enough to reduce consumption. In order to ensure that we work together and are forced to face the seriousness of the water shortage, the City of Cape Town will be enforcing fines to discourage misuse of water. Spot fines of up to R5 000 can be handed out in terms of the Water Bylaw.

Homes that use more than the usage limit of water per month will first be issued with a warning letter informing them that they are contravening Level 6B water restrictions. Thereafter, an inquiry will be done whereby the owners of the property can be summoned to appear in court. This may lead to a fine and/or to having a water management device connected.

The connection fee as well as the cost of the device will be payable by the owners of the municipal account.

Fines can be recalculated if household usage remains at more than 10 500 litres of water per month.

5 What is permitted and what is not permitted?

5.1 Irrigation systems and watering = illegal Irrigation or watering with municipal drinking water is illegal. Usage for irrigation purposes will be limited to one hour only on Tuesdays and Saturdays before 9am or after 6pm.

The use of hoses and irrigation systems linked to another water source (such as grey-water systems and rainwater tanks) is permitted.

5.2 Boreholes and/or wellpoints = legal if registered Usage of boreholes for outside purposes is discouraged to preserve groundwater resources. There is no charge for using borehole or wellpoint water. Borehole or wellpoint water use must, however, be metered, and all users are required to keep records and have these available for inspection.

If you wish to sink a new borehole or wellpoint, you will need to apply for and obtain permission from the national Department of Water and Sanitation, regardless of whether you want to sell or buy borehole or wellpoint water or use it privately. As soon as it is connected, the borehole or wellpoint must be registered, and the sign should be displayed with the obtained registration number.

Registration is free of charge; relevant signage is provided free of charge on registration.

5.3 Hosing down of paved surfaces with municipal drinking water = illegal No-one may use municipal drinking water to hose down paved surfaces, or hire power-washing companies.

The municipalities use non-drinking water for municipal street cleaning.

5.4 Washing of vehicles, trailers, caravans or boats with municipal drinking water = illegal This applies to private washing as well as formal and informal car washes. Cars must be washed with non-drinking water, or cleaned with waterless products or via dry steam-cleaning processes. Washing down of petrol station forecourts with municipal drinking water is not allowed.

In addition, it is not permitted to park a car along a river and wash it with bucket water on the riverbank.

The impact of using riverbanks to wash anything on our environment and ecosystem would be huge. Rivers are considered part of a stormwater system, so usage of riverbanks in such a manner is in direct violation of the Stormwater Management Bylaw.

5.5 Topping up swimming pools with municipal drinking water = illegal Swimming pools may not be filled or topped up with municipal drinking water, even if they are fitted with a pool cover. This includes filling of new pools or portable pools, or refilling an existing pool after a repair. A chemical/ liquid pool cover may be used to limit evaporation. However, this type of pool cover may not be as effective as a traditional pool cover, particularly in windy areas.

5.6 Water features = illegal No spray parks or sprinkler systems are permitted to operate under Level 6B restrictions 5.7 Using fire hydrants = illegal Using fire hydrants by anyone for anything other than their intended purpose without permission is an illegal act. (Refer to Section 55 of the Water Bylaw.) So is water wastage. (Refer to Section 37 of the Water Bylaw.) Any contraventions will be dealt with according to existing legal processes in terms of Section 64 of the Water Bylaw.

5.8 Using grey water to water lawns = legal Grey water is relatively clean waste water from showers, sinks, washing machines and other kitchen appliances. There are no restrictions on watering times when using grey water. However, you must show visible signage averring that you are using non-drinking water to water your garden. This must be clearly visible from a public street.

5.9 Watering agricultural or vegetable gardens with municipal water = illegal No irrigation with municipal drinking water is permitted. This also applies to vegetable gardens and agricultural areas within the Cape Town area.

The aim of the Water Bylaw is to help prevent Day Zero, and to ensure we have water until the drought ends.

This article is for information purposes only.

Each case has individual merits; an attorney should be consulted in any legal matters.

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37

water saving

15 ways to save water in the commercial and retail sector

Marna van der Walt, CEO of Excellerate Property Services

1.

It’s an old saying: you can’t monitor what you don’t measure. The first step in saving water, therefore, is to find out exactly how much is being consumed. Preston Gaddy of JHI Retail, part of Cushman & Wakefield Excellerate, demonstrates how this simple concept has been implemented to great effect at Sandton City, where water usage has been slashed by 16% since 2015. A daily water check has become central to the centre’s operations, so that management is able to gauge water consumption and compare this to established patterns. This helps to ascertain whether water use has increased beyond the normal range. With this in mind, water meters have been attached to each water pipe in the mall.

2.

Increased water usage may be a sign of leaks in the system. To ensure these leaks are detected before they become a significant problem, Sandton City has installed an alarm on its fire water system. This creates an alert when water is flowing, so leaks can be stopped immediately.

It helps to have a technician on standby, ready to repair in highrisk areas such as toilets.

3.

4.

Water use can also be reduced and regulated by installing aerators on all bathroom and kitchen taps.

Water left over in drinking glasses and kettles adds up to a surprising amount. Rudi Nieman reveals that one of the initiatives he’s taken as the Managing Agent of Sanlam Life Ltd’s

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Cape Town’s water crisis has ensured the entire country is sensitive to the importance of saving this scarce and precious resource. Since only 12% of the country’s water is used in homes, it’s vital that South Africa’s industries play their part in conserving what we have. Cushman & Wakefield Excellerate’s business units provide some tips on how to do save water across various sectors

SOUTH AFRICAN PROPERTY REVIEW

facilities portfolio is to collect all water remaining in glasses and cups from boardrooms, kitchens and meeting rooms, and use it to water office gardens. An astonishing 600 litres is collected in this manner.

5.

6.

Water-consuming office features such as water fountains and living walls are either decommissioned or replaced with eco-friendly features such as sculptures or artificial plants.

Other actions that make a difference include redirecting cooling tower water that overflowed or spilled so it can be reused within the tower, or replacing mechanical float levels with electronic sensors for greater accuracy.

11.

important to consider how much watering these require, says Nieman.

Consider replacing the gardens on your corporate premises with indigenous water-wise plants that require less irrigation.

In the same vein, the Excellerate Facilities Management team at Sanlam has stopped washing exterior window surfaces. Only internal windows in customer-facing areas are cleaned using minimal water and water-minimising cleaning chemicals.

Indoor plants are vital in an office, helping to reduce stress levels and improve the general health of the office population. It is, however,

12.

Cleaning methods can have a huge impact on water consumption.

Consider swapping the hot-water wet-extraction carpet-cleaning method, used by many corporates, for powder or encapsulation methods – a move that has helped Sanlam save 53 574 litres a month while cleaning 368 000m² of carpet.

7.

Mopping of bathroom floors, instead of scrubbing, is a great water-saving technique.

8.

Every basin in the building should be fitted with a plug.

13.

Large amounts of water are lost when dishes and cups are rinsed or washed under running water.

Investigate using treated effluent, which is ideal for watering gardens.

14.

Waterless urinals have been installed. A single water-consuming

9.

P eople traditionally associate water tanks with the collection of rainwater. However, corporates can

urinal is installed at the top of the branch discharge pipe to ensure the discharge stack and all subsequent plumbing is unharmed by urine.

use these tanks to collect recycled water from air conditioners.

10.

Consider replacing the office cooling tower. Energy-efficient cooling towers can help reduce water use as well as electricity consumption.

15.

Sanitary wipes, together with a touchless, waterless hand wash have been placed in bathrooms to allow staff the choice to use this method for washing hands.

H2O

Nelson Mandela Bay just as badly hit as drought-affected Western Cape As is the case with Cape Town, a large portion of the Port Elizabeth metropole’s income comes from tourism. Andrew Whitefield of the Port Elizabeth Mayoral Committee urges tourists and businesses to save water and observe the city’s water restrictions Compiled by Tshepo Tshabalala

s of 13 February 2018, the levels of Port Elizabeth’s dams have reached a critical 23% – an all-time low. “We remain open for business,” says Whitfield, “but we do encourage all our visitors to help us save water.”

According to Nelson Mandela Bay’s Member of the Mayoral Committee for Infrastructure and Engineering Masixole Zinto, the recorded levels of the dams that supply drinking water to the metro are the “lowest ever”. (The previous low of 31% was recorded in 2010.) At the end of January 2018, the most critical dam was the Kouga dam at 9,5%.

In a report by News24, Nelson Mandela Bay Mayor Athol Trollip urged residents to curb water usage to 50 litres per day, and for the city to reduce its daily consumption to 250 megalitres.

Trollip said the metro would not see a Day Zero, as expected in Cape Town, as long-term steps had been taken to augment the water supply through the Nooitgedacht Low Level Water Scheme, which supplies water from the Gariep Dam. Phase 2 of the scheme was recently completed and it now provides 130 megalitres of water per day at peak capacity. The treatment works are being further upgraded, with Phase 3 expected to be completed early next year, increasing capacity to 210 megalitres a day at peak capacity.

“The municipality is taking a hard line on residents who are high water users,” says Barry Martin, Nelson Mandela Bay Director for Water Services. “We have installed water consumption control devices in their homes. We are now targeting businesses that are not responding to our call for decreasing consumption with a similar action.”

Due to the dwindling capacity of its Western Supply Dams, the Nelson Mandela Bay Municipality (NMBM) says the city has embarked on a municipality-wide groundwater exploration programme. For example, high-pressure and fast-moving groundwater below the Coegakop area could see a number of artesian wells established, producing approximately 30-million litres of water a day.

NMBM also announced that households that consume more than 30 kilolitres of water a month would have flow-restriction mechanisms installed on their property.

The water-flow restriction measure follows the municipality’s recent announcement that all individual units within communal residential schemes such as townhouse complexes and apartment blocks should have water meters installed.

Municipal infrastructure and engineering director Walter Shaidi says any household exceeding the 30 kilolitres water-consumption limit stood to have its flow restricted. Shaidi says the municipality has already started installing flow limiters at premises where the water consumption limit was being exceeded.

The water consumption limit also applies to households that receive municipal services under the Assistance to the Poor (ATTP) programme.

“There are three ways in which we are trying to reduce water consumption in the ATTP households: getting plumbers in to fix leaks, educating households about saving water and installing flow restrictors,” he says, adding that in some households, a leaking toilet is often seen as “normal”.

Nelson Mandela Bay dam levels Major storage dams supplying Nelson Mandela Bay 100

75

capacity (%)

A

50

25

0 Kouga

Churchill

Impofu

Groendal

Combined Capacity

Dams

DAM

KOUGA

CHURCHILL

IMPOFU

LOERIE

GROENDAL

Capacity

10,1%

18,74%

42,05%

84,14

50,17%

Volume of Water

12 719MI

6 603MI

42 468MI

2 546MI

5 840MI

TOTAL

72 176MI

Please note that, although the level of Loerie dam has increased, it is a small balancing dam and unfortunately does not change the water disaster situation Nelson Mandela Bay is currently in.

SOUTH AFRICAN PROPERTY REVIEW

39

sustainable education cryptocurrency

Is bitcoin legal in South Africa?

A bitcoin is a crytpic and controversial little bundle of data that’s been used to make digital payments since 2009. It is a decentralised, virtual “cryptocurrency” that lingers beyond the iron grip of the banks and the government, and is controlled by the will of the people: their will to mine it, trade it and trust it Words by Dean Raviv/Provided by GoLegal

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s long as what you’re doing with it is legal, bitcoin is definitely legal in South Africa. The cryptocurrency is currently unregulated, and the South African Reserve Bank has in the past warned that “Bitcoin has no legal status or a regulatory framework. Thus it poses a number of risks for those who would choose to transact with it, such as the lack of guarantee of security, convertibility or value.”

The Reserve Bank further advised that it does not “oversee, supervise or regulate the virtual currency landscape, systems or intermediaries for soundness, effectiveness, integrity or robustness.

Consequently, all activities related to the acquisition, trading or use of virtual currency (particularly decentralised convertible virtual currency) are done at the end-user’s sole and independent risk, and have no recourse to the Bank.”

According to the South African Reserve Bank Act No. 90 of 1989, the Reserve Bank governs the management of currency and has the sole right to issue coins and notes, i.e. “legal tender”. Bitcoin, however, falls outside of the definition of legal tender.

Consequently, payments made via bitcoin in South Africa may not discharge a debtor of a monetary obligation, and purchasers run the risk that their bitcoin payments are not recognised by South African law.

Merchants are also legally entitled to refuse to accept bitcoin as legal payment.

Additionally, virtual currencies are not defined as securities in terms of the Financial Markets Act No. 19 of 2012.

They are therefore not subject to the regulatory standards that apply to the trading of securities.

Bitcoin remains legal and largely unregulated in most countries around

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the world. Many countries have, however, issued regulations with regards to taxation of virtual currencies.

Should I buy bitcoin?

The National Treasury has cautioned the public to remain extremely vigilant of the risks and benefits that accompany virtual currencies. Not only is this novel, nascent technology being scrutinised by regulators who may elect to intervene at any time, but bitcoin is also subject to wild price fluctuations, fraud and criminality.

Nevertheless, it remains undeniable that cryptocurrencies and the blockchain technology that supports them provide an elegant, efficient peer-to-peer solution that empowers the public to deal with their finances without government and bank interference.

Why is bitcoin so controversial?

What cannot be controlled, cannot be trusted. Bitcoin is decentralised, and thus operates without the authority or administration of the state or the banks.

This leads to various issues, including concerns about taxation, circumvention of exchange control regulations, loss of fees for banks, and in the future perhaps even a diminishing demand for local currencies. Its ease of use and low transaction costs provide an attractive alternative to traditional banking.

Furthermore, bitcoin users remain largely anonymous.

This makes it ideal for money laundering and for use in illicit activities such as purchasing illegal substances. Bitcoin was the fuel that fed the notorious “Silk Road”, an online platform that was used predominantly for the purchase of illegal drugs.

According to the FBI, between 6 February 2011 and 23 July 2013, the Silk Road generated sales to the value of 9 519 664 bitcoin (worth approximately R73-billion at the time of writing).

To learn more about how bitcoin and the blockchain work, watch this video:

sustainable cryptocurrency education

Legal perspective

Kerri Crawford, a technology lawyer and senior associate at global law firm Norton Rose Fulbright, discusses cryptocurrencies with a particular focus on bitcoin

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ased in Johannesburg and focusing on e-commerce and information technology, Crawford writes that bitcoin usage in South Africa is not illegal. She also notes that bitcoin acceptance among vendors is growing, with a fellow law firm also accepting payment in the cryptocurrency. The legal status of bitcoin in South Africa is akin to that of most countries around the world, where cryptocurrencies aren’t prohibited or outlawed outright.

Crawford underlines the same while referencing a joint advisory issued by the country’s major financial authorities and regulators in 2014, alerting citizens to be aware of the risks associated with using or investing in virtual currencies.

At the time, the National Treasury of the Republic of South Africa began its alert

by stating, “The National Treasury, the South African Reserve Bank, the Financial Services Board, the South African Revenue Service and the Financial Intelligence Centre would like to warn members of the public to be aware of the risks associated with the use of virtual currencies for either transactions or investments.”

While the official position and lack of regulation remain the same, with a lack of any new updates to the advisory since the September 2014 user alert, Crawford raises the possibility of the government looking into regulating and recognising bitcoin in the future.

“As the uptake of bitcoin and other cryptocurrencies increases, it is possible that the South African authorities will adopt the approach taken in many other jurisdictions and explore ways in

which the regulatory regime could be amended or revised,” she says.

South Africa has notably played host to the first-ever bitcoin conference on the African continent. Cape Town was the venue for a two-day bitcoin conference in April 2015, with bitcoin and FinTech start-ups vying to tap into the sizeable African remittance industry.

In recent times, bitcoin has made further gains in the land after South Africa’s biggest marketplace enabled bitcoin payments for both buyers and sellers. Bidorbuy, a major marketplace that sees more than 30-million page views every month, enabled bitcoin among other payment options for sellers, which meant that every item sold on the marketplace can now be bought with bitcoin.

Source: www.cryptocoinsnews.com SOUTH AFRICAN PROPERTY REVIEW

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www.howmuch.net

Visualising the tourism economy around the world Travelling the world is a dream of many young jet-setters. Tourism has always been a popular industry globally – but which countries enjoy the most tourism, and which spend the most on travel? Take a look at our two maps for inbound and outbound tourism Source: www.howmuch.net/articles/visualizing-tourism-economy

Inbound tourism can be thought of as a tourism receipt. On our map, inbound tourism expenditure is the expenditure of foreigners visiting a specific country. From the perspective of an American, any foreigner spending money to travel to and visit your country is considered an inbound tourism expenditure. Both maps are separated by region with a colour key indicating each region. The bigger the country appears on the map, the higher the expenditure. The data was collected by the World Bank in 2014.

Top 5 countries by inbound tourism expenditure

Conversely, outbound tourism expenditure is the expenditure of tourists from a specific country.

Imagine you’re an American: if you spend money to visit Germany as an American tourist, this would be considered an outbound tourism expenditure for America.

of US$220,1-billion to travel to the US and enjoy what the country has to offer. With less than one-third of inbound expenditure compared to the US, France comes in at second place with people spending US$66,8-billion to visit and enjoy its history and culture. Spain, another European country with a noble and cultured history, sits in third place with US$65,1billion in inbound expenditure.

Western and Asian countries enjoy the highest levels of inbound tourism expenditure by far. Out of the top 20 countries by inbound tourism expenditure, every one is either in the West or in Asia (except Turkey, if you consider it Middle Eastern). People from around the world spend a lot of money to visit these countries. The people who spend the most on travel (outbound tourism expenditure) are almost all from the West or Asia as well. The two exceptions are people from Saudi Arabia and Brazil, who spend quite a bit on travel and are both in the top 20 for outbound tourism expenditure.

Many countries that are member states of the European Union consistently make both lists. This is likely the result of the Schengen area, which allows citizens of countries in the European Union to travel freely between eurozone countries. In addition, the wealthier a country is, the more the people of that country are likely to travel. At the same time, wealthier countries tend to receive more visitors each year and therefore more inbound expenditure from tourists.

While the United States receives the most expenditure from foreign tourists than any other single nation, the Eurozone receives the greatest inbound tourism expenditure out of all the regions.

Top 5 countries by outbound tourism expenditure  China: US$164,9-billion  United States: US$145,7-billion  Germany: US$106,6-billion  United Kingdom: US$79,9-billion  France: US$59,4-billion Unsurprisingly, wealthier countries tend to enjoy higher expenditure, both outbound and inbound. This is because the citizens of these countries have more money to spend on travel – but it’s also because wealthier countries usually invest in tourist attractions. With China’s recent economic rise, its citizens now have more money and a larger middle class. Chinese people spend more on tourism to other countries than any other group at US$164,9-billion in outbound expenditure a year, as of 2014. Americans come in a close second at US$145,7-billion, while Germany takes third at US$106,6-billion.

For inbound tourism expenditure, the United States is far ahead of all others. People across the world spent a total 42

SOUTH AFRICAN PROPERTY REVIEW

 United States: US$220,1-billion  France: US$66,8-billion  Spain: US$65,1-billion  United Kingdom: US$62,8-billion  China: US$56,9-billion

www.howmuch.net

SOUTH AFRICAN PROPERTY REVIEW

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social

Western Cape Breakfast Session SAPOA Western Cape Regional Council hosted a breakfast session entitled “The Water Crisis”, with a focus on how the property industry can reduce its water consumption and prepare its businesses for Day Zero

FROM LEFT Nardo Snyman, Lance Greyling, Chris Frylinck, Simon Nicks, SAPOA Western Cape Regional Chairman Marlon Parring, Benjamin Biggs and Manfred Braune

Tozi Jaxa

FROM LEFT Paul van Melsen, Justin McCarthy, Jo de Freitas and Nick Rix

S

peakers on the day included Lance Greyling of the City of Cape Town, Nardo Snyman of Growthpoint Properties, Benjamin Biggs of JG Afrika and Manfred Braune of the Green Building Council of South Africa.

The breakfast session was facilitated

by SAPOA Western Cape Regional Council member Simon Nicks, and was sponsored by Growthpoint Properties.

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SOUTH AFRICAN PROPERTY REVIEW

FROM LEFT David Stoll, Philippa van Rynveld, Sedica Knight and Markku Torppa

social

FROM LEFT Andrew Kendall, Michelle Lupke and Claire Everatt

Grant Ranger

FROM LEFT Carin Brown, Caitlin Adair and Bronwyn Ambler-Smith

Taariq Jaffer

FROM LEFT Candy Williams-Armstrong, Craig Armstrong and Matthew Armstrong

Jerome Harry

Sponsored by:

FROM LEFT Faheema Cupido, Tafadzwa Ncube and Michaela Webb

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social

KwaZulu-Natal Networking Cocktail Evening SAPOA KwaZulu-Natal regional council hosted its annual networking cocktail event in February

FROM LEFT Greg Crowder, Greg Harris, Xandre Ferreira, SAPOA Regional Chair Edwin van Niekerk and Helen Seymour

Dean Deyzel

Lucky draw winner Ann Rowland with Helen Seymour and Mark Coetzee

T

he evening, sponsored by Private Property, was hosted at the Private Property offices in Umhlanga Ridge, Durban. Regional Chair Edwin van Niekerk welcomed guests, before outlining the work being done by SAPOA in the region and the great strides being made in the relationship with the eThekwini Municipality.

The lucky draw was won by Ann Rowland of Choprop.

The evening was enjoyed by all delegates present.

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SOUTH AFRICAN PROPERTY REVIEW

FROM LEFT James Claassen, Mark Coetzee, Genevieve du Preez and Pieter Oosthuizen

social

FROM LEFT Karishma Nadasan, Vanessa Ribeiro, Ricardo Gasper, Nessa Chetty and Marilje Mulder

Tarryn Trotter with Craig Woods

FROM LEFT Charmaine Powell, Norman Christoforos and Casey Holloway

Riccardo Mahlutshana

FROM LEFT Nicholas Kassier, Jemendra Haripershad and Siseko Mgunculu

Navern Munian

Sponsored by:

FROM LEFT Edwina Sekhaolelo, Andrew Ross and Wandisa Nkosi

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social

Gauteng “Meet the Media” SAPOA President Peter Levett and Chief Executive Officer Neil Gopal hosted a media lunch at the Hyatt Hotel in Johannesburg

FROM LEFT SAPOA President Peter Levett, Elma Kloppers from Beeld and Glenda Williams from Finweek

A

s SAPOA Chief Executive Officer Neil Gopal says,“As an organisation, we recognise that the media are a critical partner to SAPOA’s success. As such, regular meetings with the media are important: we get to know key members and establish a direct line of contact with them, which makes it easy to discuss issues and leverage the relationship to secure press coverage.”

The breakfast session in Jo’burg was attended by representatives of Business Day, SA Property Insider, Beeld, Financial Mail, Engineering News, Property24, Finweek, Hometimes, Moneyweb and SA Home Owner.

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SOUTH AFRICAN PROPERTY REVIEW

Simone Liedtke of Engineering News with SAPOA President Peter Levett

social

Alistair Anderson of Business Day with Suren Naidoo of SA Property Insider

Joan Muller of Financial Mail with Elma Kloppers of Beeld

Glenda Williams of Finweek with Julia Jinton of Property24

Kelebogile Nondzaba of SA Home Owner with SAPOA PR Officer Maud Nale

SAPOA President Peter Levett and SAPOA CEO Neil Gopal hosted the Gauteng media at the annual “Meet the Media” lunch

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social

Port Elizabeth Networking Evening SAPOA’s Port Elizabeth Regional Council hosted a networking evening sponsored by Investec, and held at the Investec offices in Humerail

FROM LEFT SAPOA Port Elizabeth Regional Chairman Mark Bakker, Tim Hewitt-Coleman and Jacques Wessels

FROM LEFT Ken Denton, Kate Menson, Alon Rathbone and Velda Derrocks

T

he guest speaker at the event was Tim Hewitt-Coleman, a managing member and architect at Ngonyama Okpanum Hewitt-Coleman. HewittColeman discussed the topic “Exploring the Relationship between Land Use Rights Restrictions and Wealth Inequality” – a paper that he recently presented at the Seoul World Architects Congress. SAPOA Port Elizabeth members are the first in South Africa to see the presentation.

It was an informative and interactive evening, enjoyed by all delegates in attendance.

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SOUTH AFRICAN PROPERTY REVIEW

FROM LEFT Richard Swanson, Mark Bakker and Duann Marias

social

FROM LEFT Christo Pretorius, Charl De Conning and Mark Connett

Errol Ritson with Graham Grant

Alon Rathbone with Arnie Katz

Jaco Kotze

FROM LEFT Alan Straton, Thabang Moleko and Omphemetse Maketa

FROM LEFT Gianluca Acquisto, Cindy Jonker and Tracey Watson-Gill

Gary Hughes

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off the wall

Electric flight We have electric cars, trucks, mopeds and bikes – and now we have electric planes too

A

t the Paris Air Show in June 2017, the Israel-based Eviation Aircraft Company unveiled an electric plane that promises great strides in aviation.

Imagine a Tesla car – but with wings.

“Alice” is Eviation’s ticket to the skies: made entirely out of composite and carbon fibre using 3D printing, it’s a very light all-electric aircraft that has a purported range of nearly 1 000km (actual range 800km).

Alice can reach 450km/h at a cruising altitude of 10 000 feet. Capable of carrying up to nine passengers (plus the pilot and co-pilot), the aircraft is powered by a 280kW power plant. Alice weighs only 5 900kg, which includes the 980kWh battery. Its maximum payload is 1 250kg.

Eviation is hoping that it will appeal to corporate and commercial markets for small aircraft.

Alice’s range makes it the ideal plane for an air taxi, increasing the convenience of city hopping while reducing the carbon footprint of short-distance flights. A follow-on version of Eviation’s unusual airplane would seat 13 people, cruise at 30 000 feet and be powered by aluminium fuel-cell technology, 52

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for which Eviation already owns the intellectual property.

Alice will cost between US$2,6-million and US$4-million, and will be positioned as a competitor to the Pilatus PC-12 and Beech King Air 350. Eviation, although not the first in the electric-plane race, is determined to push the boundaries of possibility.

Tesla CEO Elon Musk also has plans for an electric plane. Electric aircraft can only become viable once battery energy density exceeds 400Wh/kg; Musk’s Tesla

vehicles are believed to be powered by battery cells with 250 to 300Wh/kg.

Also at the Paris Air Show, Siemens presented its world-record-breaking electric motor for aircraft as well as two further propulsion systems of different power classes. Earlier in 2017, at the Dinslaken Schwarze Heide airfield in Germany, the aerobatic plane Extra 330LE – powered by the propulsion system by Siemens – had reached a top speed of about 340km/h over a distance of three kilometres, before becoming the world’s first electric aircraft to tow a glider at the air show. The nearly silent aerotow, piloted by Walter Extra, took a type LS8-sc neo glider up to a height of 600 metres in 76 seconds.

Siemens is currently contributing this technology to a cooperative project with Airbus, for driving the development of electrically powered flight. Electric drives are scalable, and Siemens and Airbus will be using the record-setting motor as a basis for the development of regional airliners powered by hybrid-electric propulsion systems.

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2017/05/12 11:09:17 AM