Neighbourhood 8 SEPTEMBER 2019
PROPERTY & LIFESTYLE
To let or not to let? The property rental market at the moment is slow at best, with legal pitfalls aplenty. Those in the know weigh in on how landlords and lessees should navigate these rough waters, page 2
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PROPERTY FOCUS: THE RENTAL MARKET
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Let it out
Whether you’re renting a property or renting out a property, it’s always good to know what’s happening in the rental market ATLANTIC BEACH ESTATE, MELKBOSSTRAND
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egardless of which region you live in, the prognosis for the rental market is the same: flat. Local agents had some advice for landlords while they wait for the (inevitable) upswing. “Landlords need to be aware that there’s plenty competition in the rental market and therefore their pricing needs to be realistic and market-related,” says Hayley Bird, Complete Coast Properties.
RE/MAX Property Associates. “My advice to landlords is to provide an excellent product and even better service. Opt for steady, long-term relationships rather than quick gains,” says Russell Fisher, Russell Fisher Properties.
John Birkett, Rawson Rentals Cape Metro Classic Rentals, agrees. “The rental market in 2019 has seen lowerthan-usual rental incomes. Many landlords have had to be negotiable on the rent and the annual increases, as creditworthy tenants who look after the property and pay on time are increasingly hard to come by.” “Traditionally the winter period is always quieter and demand normally picks up towards the end of the year. Landlords are having to seriously consider reducing monthly rental amounts – lower price rentals remain active,” says Caron Leslie,
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Herschel Jawitz, CEO, Jawitz properties says, “The rental market is relatively flat at the moment due to the large number of properties available for rent, especially in the sectional title market and because of the current economy. Lessees are currently pricesensitive and spoilt for choice. As a result, many lessors are accepting below-inflation escalations to keep a good tenant and may have to accept a lower rental to find a new tenant.”
It’s the law It’s crucial that landlords and tenants know their rights according to the law. The Rental Housing Amendment Act 35 of 2014 is the latest amendment to the Rental Housing Act 50 of 1999.
It increases the rights of tenants and obligations of landlords and aims at firming up the rules regarding inspections, deposits, the condition of a property and what should be included in the lease. Glenda Taylor, principal, Greeff Rentals, says, “While the Amendment Act is yet to be gazetted, both landlords and tenants are required to comply with the provisions of the Act immediately for all new lease agreements, while existing lease agreements are to be updated within six months of the Act coming into effect.” The new legislation requires that landlords provide a written lease agreement as verbal agreements will no longer be binding. The landlord must ensure that the property is structurally sound, suitable for habitation, has adequate space, and provides basic services such as water and electricity. All these items should be addressed in the lease agreement. It also addresses the fact that the landlord must place the tenant’s
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PORTMAN PLACE, MELROSE
deposit in an interest-bearing account – the interest accruing for the benefit of the tenant. The deposit interest accrued should be refunded as soon as possible (usually seven days) after termination of the lease agreement. The deposit may be applied towards the payment of any outstanding amounts for which the tenant is liable under the lease agreement, including outstanding accounts for water and electricity and the reasonable cost of any repairs caused by the tenant to the premises. The Act also protects landlords from tenants who cause malicious damage to a property. The onus is on the landlord to inspect the property with the tenant at the start of the lease. Any defects or damages must be noted but not necessarily rectified by the landlord and must be listed and attached to the lease agreement for later comparison.
to follow correct legal procedures even if the tenant is in breach. Tenants are entitled to privacy but landlords can inspect the property from time to time. Unannounced inspections, however, are not permissible.
FAQs Tenants are often in the dark with regard to their rights and responsibilities when renting a property. PG van der Linde, rentals manager, Seeff PTA East, answers four commonly asked questions.
On exit, if a joint inspection doesn’t take place, the property is assumed to be in good condition and the landlord may not withhold the deposit for repairs or damages.
Q: May tenants make changes to a rental property? A: Once the lease has been approved and the tenant has moved in, they’re not allowed to make any structural additions or install fixtures without written consent from the owner. If the owner does give consent, tenants aren’t entitled to compensation for convenient changes and fixtures when the lease expires. Tenants may also not remove these alterations and fixtures from the premises.
The landlord cannot cut off utilities and services due to non-payment – this can only be done by the municipality – or lock a tenant out of the property without a court order, and is required
Tenants may, however – in some instances – be entitled to reimbursement where necessary improvements and maintenance were undertaken.
Q: How can tenants be sure to get their deposit back? A: Hand the property back in the same condition as it was received, with the exclusion of fair wear and tear, which is something the tenant should not be penalised for. Wear and tear is scuff marks on a wall or chipped paint. A hole in the wall is considered damage and you’ll be penalised. Q: Can tenants back out of their rental lease? A: You’re allowed to give 20 business days’ notice to cancel a lease agreement. If the landlord or agent makes an effort to procure a new tenant by marketing the property at market-related prices after receiving notice but fail to find a new tenant, the tenant who gave notice can be held liable for a reasonable cancellation penalty. A reasonable cancellation penalty may require that the tenant pays the rental for the remainder of the lease should a new tenant not be sourced. Q: What if I can’t resolve issues with my landlord? A: Tenants and landlords can turn to the Rental Housing Tribunal who will listen to both parties and establish a fair settlement or will assist in mediation.
PORTMAN PLACE, MELROSE
The rent trap This describes a situation where people are continuously renting property instead of buying their own – and it gets harder and harder to break out of that as you get older. “The first step in avoiding the rent trap is making the choice to rent a property in a lower price bracket and save up towards a deposit on a property to buy,” says Just Property CEO Paul Stevens. He says it’s easy to fall into the rent trap by assuming that your income will increase as you get older. “But that’s not always the case. Responsibilities increase, as does rent and already we’re seeing data showing long-standing tenants battling to keep up with escalations.”
THREE FOUNTAINS, KENILWORTH
THE FIC AND ESTATE AGENTS WHO IS THE FIC
The Financial Intelligence Centre (FIC) is the administrator of the Financial Intelligence Centre Act, 2001, which is central to South Africa’s legislative framework on anti-money laundering, countering the financing of terrorism and combating the proliferation of weapons of mass destruction. The FIC is the country’s national centre for gathering and analysing information disclosed to it. In doing so, the FIC assists in identifying funds generated from unlawful acts, combating money laundering and terrorist financing. To help towards fulfilling this mandate, obligations are imposed on certain business sectors deemed vulnerable to money laundering and terrorist financing, such as banks, attorneys, and estate agents. Part of the obligations imposed on these sectors, known as accountable institutions, is for them to register with the FIC, and to submit regulatory reports to the FIC. Using the information and data submitted by these sectors, the FIC develops financial intelligence, which is requested or referred to competent authorities such as the South African Police Service, the National Prosecuting Authority, the Asset Forfeiture Unit and others including the South African Revenue Service, the Public Protector and supervisory bodies. This financial intelligence is used by domestic and foreign partners in their investigations, prosecutions and other follow up actions. As the FIC is reliant on timeous and quality information from accountable institutions, it is important that the sectors provide accurate, quality data and information to the FIC.
MONEY LAUNDERING
Money laundering refers to the concealing or disguising of the nature, source, location, disposing or movement of the proceeds of unlawful activities such as drug trafficking, human trafficking, proceeds derived from a fraudulent act or any other criminal activity that would have generated illegitimate monies.
have been identified as being at risk of being abused by money launderers. The estate agency sector has also been used as a vehicle to hide funds and to help criminals introduce their proceeds into the financial system.
Potentially, criminals can use the property sector to hide or clean large amounts of money in single transactions. The purchase of any type of property for a The primary intention of money launlarge sum of money, for example, may dering is to transform illicit monies into legitimate funds by introducing it into the not raise too many alarm bells. Estate agents can therefore become easy financial system i.e. changing money targets for criminals wanting to use from ‘dirty’ to ‘clean’. them to launder their illicit funds. To acquire their criminal proceeds, individuals may conduct a wide range of offences from petty to more serious crimes. The proceeds are integrated into the financial system through various means including the purchase of high-end goods such as property, motor vehicles, art, shell companies and so on. When successfully laundered, criminals are able to have full control over their money in the financial system and they are able to continue criminal activities with near impunity.
THE FIC ACT AND ESTATE AGENTS
These seven compliane obligtions are:
Record keeping Client identification and verification
Risk management and compliance programme
Apply risk-based approach
Compliance officer
Given that estate agents are familiar with their clients’ behaviour and habits, as experts in this industry estate agents Reporting Training of are best suited to identify when their employees clients’ behaviour is suspicious or unusual. Estate agents, like all accountable Registration with the FIC institutions, are required to fulfil certain Why should I submit reports to the obligations to achieve compliance with FIC? the FIC Act. A fundamental measure to minimize the risk of money laundering is for estate Compliance obligations that estate agents to submit regulatory reports to agents must fulfil within their busithe FIC. As a necessity, estate agents ness: The diagram depicts the FIC Act obliga- need to increase their understanding tions which apply to estate agents as an and awareness of their reporting obligations as well as remain alert to accountable institution: what needs to be reported
Estate agents, as defined in the Estate Agency Affairs Act, 1976 (Act 112 of 1976), are listed as accountable institutions on Schedule 1 of the FIC Act. Sectors included on Schedule 1,
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The primary regulatory reporting areas are: Cash threshold report (on cash transactions of R24 999.99 and above), Suspicious and unusual report (on transactions that are suspicious or do not make business sense) and Terrorist property report (where the institution holds or on behalf of someone holds property which may be associated with terrorism). It is important to remember, reports can only be submitted by estate agents who are registered with the FIC.
TARGETED FINANCIAL SANCTIONS
Targeted financial sanctions and estate agents Estate agents must remember that it Since April this year, the FIC has put in is prohibited to acquire, collect or use place measures to effect sanctions and of the property of a person or an entity resolutions imposed by the United Nawhose names appear in the sanctions tions Security Council (UNSC). notices. This implies therefore, that they The measures are intended to assist in may not transact or process transactions combating the financing of terrorism and for a sanctioned person or entity. The the proliferation of weapons of mass only exception to this general prohibition destruction. South Africa has implement- is in specific instances where the Mined these measures, as it is a member ister of Finance has permitted certain of the UNSC and of the Financial Action financial services or dealings with propTask Force erty as discussed below. To assist estate agents with implementation of the UNSC measures, the FIC has on its website a targeted financial sanction list containing all persons and entities identified by the UN. Updated regularly, the persons and entities list remain effective indefinitely, unless withdrawn.
The reporting obligation typically arises during day to day business. Suspicious and unusual transactions can be identified by assessing the client and/or transaction against money laundering indicators. Estate agents must acquaint themselves with some of the possible indicators of illicit financial activity. These The Minister of Finance publishes a may include: notice in the government gazette on the adoption of UNSC Resolutions, while • Source of income not matching the FIC Director publishes notices on client’s occupation persons or entities subject to sanctions • Attempts to conceal identity of indimeasures as per the sanctions list. viduals involved in the transaction by using nominees or fronts Estate agents are required to identify • Purchasing an income property to whether they have a sanctioned person allow legitimate rental income to be or entity as a client. They may draw the co-mingled with criminal revenue and attention of the sanctioned person or • Abusing property related compaentity to the notices published by the nies such as property development Minister of Finance and the FIC’s or construction companies These Director, in the government gazette. companies would then purchase properties, financed in part by bonds provided by other shell companies established by the launderer.
With the FIC’s targeted financial sanctions list in place, estate agents are required to screen their new and existing clients against this list. Furthermore, the process for this screening must be contained in the estate agents RMCP. Estate agents and all accountable institutions may also subscribe to the FIC to receive alerts when any changes on the list are made. Should an estate agent discover that they have a client on the targeted financial sanctions list, they are required not to transact with the individual or entity. The estate agent is required to submit a terrorist property report (TPR), should they identify property in their possession or under their control, which is owned or controlled or on behalf of a person or an entity identified in the sanctions list.
Penalties for non-compliance with these obligations can include administrative sanctions and criminal prosecution. This may amount to a maximum of 15 years in prison or a fine not exceeding R100 million. Penalties depend on the contravention and the severity of the offence. Compliance with the FIC Act makes it more difficult for criminals to hide their illicit proceeds in the formal financial sector. Further information to assist estate agents on what to look out for as indicators of potential criminality is available on the FIC website www.fic.gov.za.
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PROPERTY NEWS
8 SEPTEMBER 2019
Neighbourhood
Rules are made to be broken There are always so-called ‘rules’ around design, decor, photography, you name it. But it’s only when you know those rules and feel comfortable enough to break them with impunity that you create something unique. WORDS: ANNE SCHAUFFER
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omewhat of a design maverick, Grant Webster of Fahrenheit Design has been in the interior and decor industry as long as he cares to remember. One of his favourite things is talking about his most important rules around interior design, many of them breakaways from conventional thinking. He offered up nine…
Rule #1
The most important rule is this: know what you’re trying to do. Creating a space that has style or chic, comes with a real effort to distil the essence of this style, and then to repeatedly reinforce this idea in every decision, every colour selection, every furniture choice, and so on. Style with a single idea in mind!
Rule #2
Don’t do anything you don’t like doing. It may sound so obvious, but it still holds true. Don’t use a style or theme you don’t personally enjoy. Not being able to embrace that concept will lead to a lack of confidence that is visible to others, and won’t fulfil you or encourage your efforts. Creativity must play a role and a lack of conviction will crush the result.
Rule #3
Paint a small space with light colours? No, it’s a lie. Nothing you do in a small space will fool anyone into believing it’s not a small space. Using mirrors on only one of the larger walls will help, as will the use of indirect light because it eliminates shadows. But a small space will remain a small space. Rather celebrate the uniqueness of that small space and be bold when considering what to do with it.
Rule #4
A high ceiling makes a space feel bigger. Really? No, it doesn’t. Would you feel comfortable standing at the bottom of a lift shaft? Not likely, even though this is an extreme example. It’s all about balance. Any space taller than it is wide won’t ever
be considered calming. Rather use horizontal breaks such as dado rails, and levels of cornicing to divide the space into sections that are manageable by a mind that’s seeking balance.
Rule #5
The largest piece of furniture goes on to the largest wall. This is a simple decor rule, and it holds true if you’re not trying to create an unbalanced environment. Simple, easy, true.
Rule #6
The wall with the window is the wall that will always appear darkest in a room. This may seem the obvious place to make the feature wall, but it’s not. Because of this, one of the side walls is the best place to embellish with wallpaper, a bar, panelling or mirror.
Rule #7
Always use the most matt paint on your ceiling. Unless you want to see every bump, blemish and defect, stay with matt – I use Dulux Trade Dura 65, as the ceiling paint specification of choice. Light or dark paint selection doesn’t matter. In fact, a darker shade of paint helps present a view in its best form, a note to remember when painting large veranda ceilings.
Rule #8
Reflective surfaces create excitement, dull surfaces create calm. Not always as obvious as it seems, but this trick allows you to create areas of interest and attention, when you use reflective items and surfaces in a space that’s largely matt or dull. This allows for the use of glass, and metallic items in a collection arrangement, to become a feature in a dull, matt, cocooning space. Surprisingly, this works just as well in a monochrome palette, in fact, even more in a room with many different colours.
Rule #9
Never follow the rules. Greatness comes from individuality, a break from tradition and a healthy disregard for convention. Enough said…
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Airbnb Steyn City’s new generates launch gains traction an estimated J R10,5bn for SA N
ew research shows that Airbnb’s host and guest community generated more than $100bn (±R1,500bn) in estimated direct economic impact across 30 countries last year. The estimated direct economic impact of Airbnb in SA was more than $685m (±R10,3bn), based on host income and guest spending during trips. In an Airbnb survey of more than 228,000 responses, 51% of Airbnb hosts said that hosting on the platform
helped them afford their homes. “Travel on Airbnb is helping to spread tourism benefits to more families, communities and local businesses,” says Velma Corcoran, Airbnb country manager for sub-Saharan Africa. “It’s never been easier to travel to and stay in SA’s smaller towns.” Host earnings from Airbnb in smaller towns have risen significantly. Mossel Bay, for example, had a year-on-year increase of more than 80%, whereas earnings in Saldanha Bay increased by almost 60%.
Berlin and Paris lead global prime residential growth
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erlin and Paris experienced standout growth for prime residential property of about 4% over the past six months and 8% growth over the past year, reports the Savills World Cities Prime Residential Index. However, price growth across leading prime city housing markets continued to dip during the first half of this year. “There are a number of reasons why prime residential markets in global cities are slowing down, with government policy, the cost of money, increased supply, and global economic uncertainty all playing their part,” says Savills World Research head Sophie Chick. The six months to June marked a turning point for various Chinese cities, as prices recovered following drops during the second half of last year.
Hong Kong still has the most expensive residential property in the world at €45,400/m2 (±R745,921/m2), with growth of 1.3%. In Moscow prices increased by 1.2%, after years of falls. In Bangkok and Kuala Lumpur prime prices increased by nearly 2.5% in the first half of the year. Conversely, over the same period prices fell in many US cities owing to tax changes impacting demand and, in the case of New York and Miami, high levels of stock. In Dubai, prime prices have fallen 20% in five years and are continuing to drop because of high new-build stock levels and economic uncertainty. In Sydney and Cape Town, the report shows values have increased significantly over the past five years, but both cities are now experiencing price falls, slowing their property markets.
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ust three months after its launch, 104 on Creek – the new luxury resort-style apartment development at Steyn City – has attracted much attention from buyers in the market; an excellent sign ahead of its occupation date in the first quarter of 2020.
“The success of 104 on Creek shows us we’re on the right track when it comes to perceiving the market’s needs for apartment living coupled with the finest lifestyle offering every homeowner could desire, from access to world-class facilities to freedom of movement and the space to roam,” comments Lambert Bezuidenhout, sales manager, Steyn City. As Steyn City’s latest luxury apartment development, 104 on Creek subscribes entirely to the parkland’s ethos of accessibility and ease. The high-specced nature of these two- and threebedroom homes is testimony to this – each boasts double-glazed windows, air-conditioning, selected Siemens appliances and superior fittings, while thoughtful design ensures privacy and comfort. These features may be viewed at the development’s threebedroom showhouse, which has been beautifully decorated by Weylandts. Apartments are priced from R2,7m, and measure 96m² up to 133m², complete with undercover parking and a selection with basement parking.
Spring into action Spring-cleaning implies way more than a good airing of the beds. If you really want to feel the benefits, decluttering is everything. WORDS: ANNE SCHAUFFER IMAGES: SHUTTERSTOCK
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quote which resonates is that of Angel Chernoff, life coach and co-author of the best-selling book 1,000 Little Things Happy, Successful People Do Differently, “When things aren’t adding up in your life, begin subtracting. Life gets a lot simpler when you clear the clutter that makes it complicated.” So, what’s that got to do with springcleaning? Plenty. Increasingly, globally, everybody is becoming aware that bombardment of the senses by technology, materialism, clutter, you name it, isn’t doing anybody any good. Use it or lose it – to somebody who can use it.
Clear your head
A clear head’s a great result of springcleaning. You don’t have to do it in a day, or even a week – put together a 30-day/ month spring-cleaning calendar, so you literally have no excuse about being “too busy” or “too tired”. Take your time, but make sure you stick to the daily task you’ve set yourself. Alma Dewar Richardson is Decluttering Momentum, and her mantra is “give away, pack away, throw away, tidy and clean”. For her, it’s important that spring-cleaning isn’t considered one person’s job. It’s both halves of a couple or every member of a family. If the mindset isn’t established, it’s difficult to sustain. She’s adamant about setting time limits. Quick ones, so you limit the thinking time. “Create a designated spot for donations to charity – set the timer for five minutes, everyone identifies five items of their own they wish to give away and meet back at the spot with the items. Bag them and stow them in the car for delivery.” And she thinks likewise about everything else in the home. “Create a packaway mindset – toys in the toybox, dirty clothes
in the laundry basket, clean clothes in the cupboard. To maintain a neat home going forward have a chores list – for everyone – which is fairly distributed and make sure that keeping the house a home is the whole family’s responsibility. Find a home for everything and have everything living in its home – take a deep breath, allocate rooms to everyone in the family and do a 15-minute pack-away blitz.” Isabelle de Grandpre is NEAT FREAK. She considers clutter an impediment to, well, just about everything, and spring-cleaning. She suggests you start this way, “Write down on separate pieces of paper a list of all the things you need to do in the home or office that would help you feel better about that space. This could be accumulated admin and filing that really needs to be sorted before the taxman finds you, or your dining room that has become the family’s dumping ground.”
Timetable
But it’s not good enough writing out what needs to be done, it also needs a timetable, otherwise the temptation to abandon ship before you’ve embarked is strong. “Even if you only do the assigned task for one hour a day, you’ll be amazed at the difference it makes.”
She suggests this:
• M onday: Decluttering and placing items into piles so you can deal with them. • Tuesday: You have undoubtedly awoken the dust mites, so start dusting, vacuuming and wiping (inside and on top). • Wednesday and Thursday: Go through and categorise the items in those piles. • Friday: Rearrange the items you’ve sorted through. • Saturday: Wash and launder where you can. • Sunday: Decorate – and buy yourself a bunch of flowers for the effort! “And note,” says De Grandpre, “When you’re going through the
scheduled tasks – which you can adjust to fit a weekend – do whatever it takes to stay motivated. If you love music, play it loud.”
Must-dos
She offers a few tips: No matter how obvious or simple they seem, don’t skip them. Spring-cleaning and decluttering requires a methodical approach. One of the big hurdles is sentimentality, and although you don’t need to throw feelings out the window, best get a firm grip on them. “Don’t hold on to things you know you will not need, haven’t looked at since your 21st birthday, never liked anyway – donate it to someone who may. If there are items to throw away, recycle. Before you start, find out where the nearest recycling depot is, and drop off as soon as you’re done… otherwise, somehow, things find their way back into the spaces,” De Grandpre says. “Prepare for your spring clean before you begin. There are ‘tools’ required – rubbish bags, labels and cleaning supplies. Have a good idea to whom you can donate items. Have empty boxes available or even containers for dividing up items in cupboards and drawers. If you don’t have what you need, you’re likely to get seriously frustrated and risk throwing in the towel,” she advises. “Label!” says De Grandpre. “It’s a huge help when you know just by looking at the container what’s in it. “Think out of the box about the layout of your spaces. Consider your options – move things around and try new configurations. You can always put it back where it was if it truly doesn’t work.” De Grandpre likes the idea of a bragging session. “Before you start on your spring clean, consider arranging a dinner with good friends for afterwards. This could be another motivation for you – you can’t go backwards because you’ve invited everyone round for a brag session.”