Louise Reyneke Properties

Finding the right home is not only about finding an architectural structure that meets your requirements (three bedrooms, sun in the afternoon, a yard for the dogs, access control for the kids, etc.). The search is as much about finding a community you want to become a part of. For many residents, the community that surrounds them is governed by an entity known as a homeowners’ association (HOA).

HOAs are created in full title or freehold housing establishments and are, at their core, responsible for the wellbeing of a residential area and the community that exists within its boundaries. An HOA will fall into one of two categories: a non-profit company or a common law association. When registered as a non-profit company, the HOA will be governed by the Companies Act and must appoint directors to manage its affairs. A common law association, on the other hand, is created informally and offers more leniency in its management, which is overseen by trustees instead of directors. While the formation of a common law association is indeed simpler, is does lack the security, accountability, and clout found in a registered non-profit company.

The responsibilities of the HOA include ensuring the upkeep of infrastructure and the creation of rules that ensure a harmonious living environment. The main purpose of these rules are to create a community that values the lifestyles and aesthetic preferences of the homeowners that reside within it and to create a sense of harmony. It is important for interested homeowners to familiarise themselves with the restrictions of the Memorandum of Incorporation (MOI) to ensure that they are comfortable with adhering to rules.

The rules created by the HOA are contained in its MOI, which should be made available to all new homeowners who move into the area. The rules of an HOA can include items such as quiet hours and regulate parking on sidewalks but can also include items that promote uniformity, such as what colour the exterior of a property may be painted and what flora may be planted in publicly visible areas.

When moving into a residential area run by an HOA, homeowners are required to become members of the HOA and will usually be required to pay an HOA fee. These fees primarily go towards the upkeep of the community’s infrastructure, including the maintenance of lawns and common areas, such as play areas and parks.

An aspect that is often overlooked when considering the scope of the HOA’s role, is the promotion of community building. Community activities and social events, such as yoga classes, book clubs, and even the classic braai, should be arranged by HOAs to bring the community together. HOAs can also promote activities such as recycling and encourage more environmentally conscious behaviour.

It’s clear that homeowners’ associations can play a vital role in the creation and wellbeing of communities when approached correctly. If you want to learn more about the creation of a homeowners’ association or have questions regarding the one you are a member of, get in touch with one of our professional property practitioners to assist you.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Original article: Gustav Barkhuysen Attorneys - The role of homeowners’ associations

Home insurance is there to protect one of the most important assets you own. And when done properly, it will allow you to insure both the structure of your home and the life that is lived within its four walls.

Home insurance can be divided into three sections: Building Insurance, Home Contents Insurance, and Personal Valuables Insurance. The purpose of Building Insurance is to cover only the structure of your property, and Home Contents Insurance covers items such as appliances and furniture that stay within the home, while Personal Valuables Insurance covers the household items that travel with you out of your home, such as cell phones and laptops.

To ensure that your home insurance policy covers you as best as possible, you should understand your cover fully and assess its accuracy over time as your property changes.

Check your liability limit

It’s important that you should be covered realistically, which is why comprehensive coverage is always advisable. When you consider the costs of rebuilding your property or replacing its contents, the numbers can quickly add up, and you need to be sure that you are covered adequately should you need it.

Cover for natural occurrences

While damage caused by natural disasters, such as hurricanes and tornadoes, is usually covered by insurance policies, other natural occurrences may be excluded. When you live near areas that are prone to natural influences, such as a riverbank or known fault line, you need to find insurance that will cover you should damages arise due to these natural causes.

Update it as you go

Your policy is based on the contents of your home, and should this change, your policy should also be updated accordingly to reflect its latest status. The presence of a piano or original piece of art in your home, for instance, can increase your instalment substantially. So, if you decide to sell an item of substantial financial worth, make sure to update your policy to avoid paying for cover of an item you no longer own. When you add something, on the other hand, updating your policy is just as important, as major items (especially high-value ones) will not be covered if they are not explicitly included in your policy.

Specify your structures

Knowing which structures are covered by your policy can save you a lot of hassle and financial turmoil. Many insurance policies cover only the main dwelling structure, the home itself, and do not cover any damages to, for instance, garages, swimming pools, or lapas. Keeping your policy simple may save on instalments and may be prudent when the other structures on your property are not of high value. But when the additional structures on your property are of high value, it is usually advisable to include them in your policy.

While most home insurance policies are rather comprehensive in their cover scope, there are a few items that are most often not covered by insurers. Coverage is often limited/not granted in the following instances:

Home insurance may not be something you look forward to utilising, but the old proverb is highly applicable here: it’s better to have it and not need it, than need it and not have it. If you’re looking for new home insurance or want to update yours to be more comprehensive, make sure to contact us for the advice you need.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Original Article: Gustav Barkhuysen Attorneys - Know how to make the most out of home insurance

Purchasing a home is one of the biggest decisions most people will make in their lives. It makes sense then that this endeavour should be approached with diligent consideration and care. While the necessary assistance of professionals, who will help you make the best decisions along the way, is highly advisable for this journey, there are a few tell-tale signs you can spot yourself that will help you identify whether a property deserves another moment’s consideration.

Once a house become a showhouse, a magical veil is drawn over a mundane property that allows it to appear like a home right out of a movie or magazine. It’s undeniable that first impressions leave lasting impressions, which is exactly why homeowners may try to cover up any defaults by dazzling you before you find out something is amiss. It is important to not let first impressions affect your judgement.

Because of this, it is vital that you investigate thoroughly.

If you are serious as a buyer, and the seller is serious about selling, the seller should not have a problem with allowing you free reign through the property (even if it is supervised by them). Like a real estate Indiana Jones, you should explore every inch of the property. Open doors, flush toilets, test the taps, flip every switch you can find, jump on the floors (especially upstairs) - go all out.

During this exploration, it’s important to pay attention to cracks, even minor ones, and doors that struggle to close. These occurrences may indicate foundational problems. When you find either of these, it is best to have a structural survey completed beforehand. You should also pay attention to any fresh coats of paint, especially when found in selected patches. If an entire room has been repainted, it is advisable to enquire as to the reason for the repaint, but when a patch of paint is visible it usually indicates an area where damage has been patched up. Getting to the bottom of such damages is important.

As you travel from room to room, it is also good to get a feel of the climate within the house. You shouldn’t have to imagine what a room would feel like once you have a new air-conditioning or heating system installed. If the house’s interior temperatures are not accommodating, you need to consider to what extent this will influence you.

Once you’ve done the rounds inside, remember to take a tour of the exterior as well. It’s a given that you should inspect the condition of the yard and the roof, but you should also ascertain the state of the neighbours’ properties where possible. This will not only help you get a feel of property itself, but also of the community that will ultimately affect your living experience and the value of your property.

All of that said, it is also important to be able to see beyond minor shortcomings and the current state of things. An unkempt yard, unvarnished kitchen counters, clutter throughout the house – these are all factors that can be given the necessary attention in time. When you tour a property, it is important to envision your home, as you would want it. While there are various deal-breakers, especially when it comes to structural security, there are also many shortcomings that may make a bad first impression that should not inhibit you from seeing the potential of the property.

Go in with a plan. Ask questions. Demand answers. It’s your future home – it’s worth the trouble.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Original article: Gustav Barkhuysen Attorneys - Exploring a potential property

We have received the following notification from the City of Cape Town regarding building plans.

In short:

When sellling your house, homeowners are required to ensure that the approved building plans on record at the Municipality correctly reflect the building structure of your property and that all alterations have been approved.

The City of Cape Town requests all homeowners to ensure that these plans are current and all buildings have been authorized.

If you do not have a copy:

  1. go the City Website, download and complete a plans request form
  2. copy your business partner number (found on your municipal account)
  3. collect a hard copy at the relevant municipality  various district planning offices
  4. ensure that the authorized plans cover all alterations made

Should you have made unauthorised alterations, you need to get a draftsman or architect to draw up plans and have them submitted.

Please call us if you need any more information or assistance.

See the article below:

1 FEBRUARY 2019

 

MEDIA RELEASE

 

City advises on how to obtain your building plan

 

The City of Cape Town encourages all building owners to ensure that they have a copy of their approved building plans. Having these plans readily available will prove to be very helpful when wanting to make extensions, additions or alterations to a building or when the opportunity to sell arises. Read more below:

 As the authority responsible for ensuring a safe and healthy built environment for all residents and visitors in Cape Town, the City holds approved building plans for existing buildings in the city. Property owners or architects that have the necessary power of attorney may obtain copies of these plans from the City before preparing a building plan submission on any previously approved building plans.

It is also customary for property owners to have their building plan available when selling their home. In the case of owners wanting to sell a building, they need to ensure that the property is in the same condition as reflected on the existing approved building plan. In cases where unauthorised alterations have been made, owners are encouraged submit the necessary plans to regularise the unauthorised alteration before the sale and transfer of ownership takes place. In some instances, an owner may be liable to pay an administrative penalty for unauthorised building work. Building plans also form an important part of various processes which include the insurance of properties.

‘The City’s Development Management Department offers a decentralised service delivery system to ensure that our services are available closer to communities. All building owners are therefore able to obtain hard copies of their building plans at our various district planning offices across the city.

‘Customers simply have to complete the plans request form which is available on the City’s website, pay the search fee and obtain the plan at the nearest district office. Each building owner has a business partner number which can be found on your municipal account. Please remember that this number is an essential requirement when requesting a copy of your plan,’ said Mayoral Committee Member for Spatial Planning and Environment, Alderman Marian Nieuwoudt.

It’s important to note that there are certain instances where the City may not have a copy of a previously approved building plan on record. If for any reason plans of a particular property are not available, it is the responsibility of the registered owner to have the as-built structures measured and drawn up.

In terms of submitting building plans and land use applications for approval, residents, architects and developers can do so by submitting applications via the  Development Application Management System (DAMS) which conveniently allows for the electronic submission, processing and tracking of building plans and land use applications via e-Services on the City of Cape Town website.

‘We are also currently in the process of enhancing the DAMS which will then allow customers to obtain their building plans online. The City is moving towards online submission via e-Services as the only mechanism for the submission of building plans and land use applications therefore we encourage anyone intending to submit planning applications in the future to register for the department’s services on e-Services,’ said Alderman Marian Nieuwoudt.

 

This by-law only applies to properties in the COCT and was published in the Government Gazette on 20 July 2018.
warer tap

Changes included the following:

The changes furthermore indicate that as with boreholes, well points and wells must now also be registered. You now need to apply for consent from the Department of Water and Sanitation in terms of section 39 of the National Water Act1998 (Act 36 of 1998) if you want to sink a well; well point or borehole.
Failure to comply with this water-by law can land you in jail for up to FIVE years and you can be fined!

 

For more information, please go to: http://resource.capetown.gov.za/documentcentre/Documents/Bylaws%20and%20policies/Water%20Amendment%20By-law%202018.pdf

This summary was kindly provided by Robert Krautkrämer from MILTONS MATSEMELA ATTORNEYS

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Further to unpaid municipal debts older than 24 months:

A recent High Court judgment (Stand 278 Strydom Park (Pty) Limited v Ekurhuleni Metropolitan Municipality) confirmed that:

This case brings some relief to those owners who have been in lengthy disputes with their municipality regarding debt incurred by the previous owners of the property.

What this means for purchasers

When a property is sold and in the process of being transferred to the purchaser, it frequently happens that the municipality does not recover all of the arrears from the seller but nevertheless issues a rates clearance certificate to the transferring attorney.

After transfer of the property to the new owners, the municipality then realises that the previous owners’ rates and taxes in respect of the property are still in arrears. The municipality then attempts to hold the new owners of the property liable for payment of the historical debt.

The new owners, unaware of their legal rights, are bullied into making payment arrangements with the municipality to pay off the previous owners’ debts because they fear that their water and electricity supply will be cut off, or worse, that they might lose their property.

What to do in the event that the municipality threatens the new owners with disconnection

Remember that the purchasers are not liable for the previous owners’ municipal debts and it is unlawful for the municipality to cut off water and electricity supply to the property because of such debt.

Purchasers are advised to seek urgent legal advice in the event that they are faced with letters of demand for the payment of the previous owners’ municipal debts and/or threatened with the termination of their municipal services.

From Bissets, Boemke and McBlain Attorneys, Notaries and Conveyancers (May 2015)[/vc_column_text][/vc_column][/vc_row]

With thanks received  from Smith Tabata Buchanan Boyes Attorneys: Jan 2015

If you own an erf or a sectional title unit, you are liable for certain payments to the local authority with jurisdiction over the property. This local authority has the right to collect two types of contributions from property owners:

Rates and taxes:

The rates and taxes due in respect of a property are based on the value of the property. The municipality examines its budget and its need for income for a particular financial year and then distributes the tax burden amongst the property owners according to the valuation of the properties. The higher the municipal value of a particular property, the higher the amount of rates and taxes that will be payable.

Rates and taxes are determined annually, but do not necessary work on a calendar year; generally they are calculated to coincide with the local authority’s financial year. Some local authorities require property owners to pay their rates annually in advance (ie at the beginning of the term), while others require a monthly payment.

 

Amount charged for service:

Local authorities will bill property owners on a monthly basis for services rendered to the property, separate from and in addition to, the rates and taxes. These include services such as water, electricity, sewerage removal, refuse removal and the like. Water meters and electricity meters installed on each property measure the water and electricity consumption by the particular household or business, and the property owners receive monthly accounts for the services used.

These are known as ‘utility bills’.

Why is a rates clearance necessary in a property transfer?

The simple answer is that transfer of the property is not possible without it as the Deeds Registries Act prohibits the Registrar from passing transfer without such a certificate. This is favourable to a Purchaser who can rest assured that the rates for the 24 months preceding the transfer has been paid in full. The certificate does however not cover so-called ‘historic rates’, ie unpaid rates and taxes older than 24 months preceding transfer, which will remain a charge against the property itself. Ideally therefore, a sale agreement should address the possibility that such unpaid debts exist and ensure that the seller accepts liability for payment of these.

How is the rates clearance certificate obtained?

Nowadays the process is automated. In essence, the conveyancers will apply to the relevant local authority for the issue of ‘rates clearance figures’, and after payment of the due amount by the conveyancers, the rates clearance certificate is issued. A breakdown of the rates clearance figures is provided. The conveyancer collects the money from the seller and effects payment thereof (together with certain mandatory advance rates) to the local authority. On payment, the seller’s municipal account is credited accordingly. The seller can discontinue paying monthly rates for the period covered in the assessment.

Period of validity of a rates clearance certificate:

Rates clearance certificates are valid for 120 days after the date of issue. Thereafter they lapse and if the transfer is not yet registered by then, new figures will have to be applied for and the process is repeated.

Advance rates:

Generally the municipality’s assessment includes a charge for rates and taxes, electricity, water, sewerage and refuse for a period of 90 – 120 days in advance. This is a practical measure as the law states that a clearance must remain valid for 60 days from the date of issue. In order to cover the time it takes for the assessment amount to be paid and the 60-day period of validity, it is necessary to include an advance estimation.

This amount is not negotiable, but any overpayment will be returned to the seller by the local authority in due course.

Who pays for what?

It is generally the Seller’s responsibility to pay all the amounts raised in the assessment. The money must be paid to the conveyancer who will submit it, together with any other requirements, to the municipality.

Refunds and overpayment:

After transfer, the local authority’s rates department will process any possible refund and return the payment to the seller. This is an automatic process at many local authorities although with others, it may still be necessary to submit a refund application.

Depending on the turnaround times at the local authority, it may take some time for the new details to reflect on the local authority’s system. As a result, a purchaser may wait a few months before he receives his first rates and taxes bill in respect of the new property.

INVASIVE ALIEN PLANTS AND THE PROPERTY OWNER

A1a

On 1st August 2014, the Minister of Environmental Affairs published the Alien and Invasive Species Regulations which come into effect on 1st October 2014.  A list of Alien Invasive Species was also published and the list can be found at http://www.invasives.org.za/legislation.html.

A total of 559 alien species are listed as invasive in four different categories, and a further 560 species listed as prohibited and may not be introduced into the country.  The species relate to fauna and flora.

The main aim of the legislation is prevent more alien invasive species coming into South Africa and the new regulations are intended to halt the spread of potentially devastating species.  Invasive Alien Plants (IAPS) are a major threat to biodiversity, human livelihoods and economic development.  Many IAPS are products of unwise and unintentional plant introductions, however if new invasions are discovered before they are well established, eradication is possible and management costs are greatly reduced.

The second main focus is on the early detection of and the rapid response to emerging invasive species.  These are listed in category 1a and require immediate control by all land owners.

A1b

The third main focus is to address the established invasive species that are most harmful and destructive and these are listed in category 1b.

The fines and penalties for non-compliance with the regulations can attract a fine not exceeding R10 million or imprisonment not exceeding 10 years. However, from the regulations, it would appear that the idea is to obtain co-operation and the fines and penalties will only become applicable if the landowner refuses an authorised official from the Department to enter onto the land to monitor, assist or implement the combating; control or eradication of the species, or flatly refuses to comply with the regulations after due notice.

How will the regulations impact upon the seller of a property?

In terms of Regulation 29:

1. If a permit holder sells the property on which an alien listed invasive species is under the permit holder’s control, the new owner of such property must apply for a permit in terms of the Act.

2. The seller of any immovable property must, prior to the conclusion of the relevant sale agreement, notify the purchaser of that property in writing of the presence of listed invasive species on the property.

The purpose behind the regulations is to ensure that coherent control programmes are run and maintained.

Most of us would not know a Cardiospermum grandiflorum (balloon vine which is a Category 1b species) from a Cardiospermum halicacabum (lesser balloon vine – Category 3) unless we are told.  So needless to say, if the seller is unaware of the presence of a listed invasive species, then the regulation cannot be complied with and it would not be right for a purchaser who subsequently becomes aware of the invasive alien, to hold the seller responsible after sale of the property.

A1c

For this reason we advise that reference to plants and vegetation be included in the acknowledgement by the purchaser that he has acquainted himself fully with the extent and nature of the property he is buying and that he accepts it as such.

The estate agent should request Sellers to confirm in writing whether they are aware of, or hold any permits in respect of any alien invasive species located on the property. If the Seller advises being aware of any alien species, or confirms that he holds a permit, then the estate agent can give a copy of this confirmation to a prospective purchaser who submits an offer on the property, in which event the offer should include an acknowledgment by the Purchaser to the effect that the Purchaser has been advised of the invasive species presence on the property.

Article obtained from http://esilaw.co.za/invasive-alien-plants-property-owner/

Resources:  “Invasive alien plants and the property owner” written by Maria Davey from Meumann White Attorneys (shortened article) and Miltons Matsemela Newsflash (Invasive Species) – October 2014

Maintenance defaulters are shortly going to find it much more difficult, if not impossible, to buy property, thanks to proposed amendments to the National Credit Act (NCA) regulations.

Now with maintenance payments added to the list of debt obligations they must include in their calculations, and maintenance defaults to be included when it comes to credit scoring, it is unlikely that anyone who is neglecting their maintenance obligations will be able to obtain a home loan or any other kind of credit, for that matter.

The amendments, which are due to be tabled in Parliament soon, provide for monthly maintenance payments to be added to the list of debt obligations that lenders must include when conducting the affordability assessments that are required before any new credit can be granted.

They also provide for any judgment against a maintenance defaulter to be added to that person’s credit record and to remain there for five years or until it is rescinded by a court.

Sadly, maintenance defaulting in all too common is South Africa, where almost half of all children are being raised by single parents, but the Justice Department is hoping that these amendments will help change this situation.

They anticipate that this will make it difficult for anyone who is not meeting their maintenance obligations to their children to then go and obtain finance to buy themselves a new home or investment property.

Currently, the NCA already stipulates that any bank considering a home loan application must first establish what the potential borrower’s income is, what his or her regular monthly expenses are, and what debt repayment obligations he or she already has as per any credit agreements listed by the credit bureaux.

“It also sets out stiff penalties for anything perceived to be ‘reckless’ lending, and we all know how this has affected home loan lending over the past few years, with the banks tending to err much on the side of caution.”

Now with maintenance payments added to the list of debt obligations they must include in their calculations, and maintenance defaults to be included when it comes to credit scoring, it is unlikely that anyone who is neglecting their maintenance obligations will be able to obtain a home loan or any other kind of credit, for that matter, he says.

Information supplied by FNB Homeloans

Portside, Floor 23, 5 Buitengracht Street, Cape Town
Web: www.fnb.co.za | Mobile: www.fnb.mobi
To see the full legal disclaimer pertaining to this refer to www.fnb.co.za
First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).

A recent Supreme Court of Appeal judgment illustrates the importance of fulfilling suspensive conditions in an agreement and the consequences of not doing so.

On 11 April 2007, an agreement relating to a property development was entered into between Pangbourne Properties Ltd (Pangbourne) and Africast (Pty) Ltd (Africast). This agreement was subject to a suspensive condition that Pangbourne provide Africast with written notice that its board of directors had approved the purchase of the property within seven working days after conclusion of the agreement by the parties. The agreement was signed by both parties on 11 April, and was subsequently approved by Pangbourne's board of directors on 20 April 2007. Pangbourne provided Africast with written notice that Pangbourne’s board approved the agreement on 25 April 2007. From this date onwards, the parties acted on the basis that the agreement was valid and binding.

In 2008, 18 months after the signing of the agreement, and after buildings had been constructed in accordance with the contract, Pangbourne asserted that the suspensive condition in the agreement had not been fulfilled. And as such, Pangbourne refused to provide Africast with bank guarantees in respect of the fulfilment of its payment obligations under the contract. Africast considered Pangbourne’s new stance as repudiation and, as a result, cancelled the contract and claimed damages for breach of contract.

This claim was rejected by the South Gauteng High Court. Upon appeal to the Supreme Court of Appeal, the Court explained that upon conclusion of a contract containing a suspensive condition, the contract itself is enforceable, but some of its obligations are postponed pending fulfilment of the suspensive condition.

If the suspensive condition is eventually fulfilled, the contract is deemed to have existed from the date when the contract was initially concluded, as opposed to the date on which the condition was fulfilled. If the condition is not fulfilled, then the contract is deemed not to have come into being.

The Court confirmed that the suspensive condition had not been fulfilled and the contract never came into operation. Accordingly, the Court found in Pangbourne's favour, dismissing the appeal with costs.

The judgement of the Supreme Court of Appeal illustrates the importance of ensuring total and timeous compliance with a suspensive condition in a contract. As held by the Court, non-compliance with a suspensive condition vitiates a contractual agreement by rendering the contract void ab initio. As illustrated by the present case, this is the legal position even where one or both of the parties have already delivered performance in terms of the contract.

Information obtained from  Bisset Boehmke McBlain Attorneys, All rights reserved.

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