Easy ways to ‘green’ your home office

Posted on May 20, 2013 by Barry Davies

green-home-officeThese days just about every home has an “office” space, ranging from a desk and computer in a corner of the living room to a separate room or outbuilding that is fully kitted out as a base for a home office or business.

And they all use a high amount of energy and resources relative to their size and the rest of the home, so if you’re trying to live “greener” – and cut your power bills in your home office – it is worth following some simple guidelines to make them more environmentally friendly, says Berry Everitt, MD of the Chas Everitt International property group.

As an easy start, he says, you should buy a second wastebasket to use for recyclables such as plastics, old batteries and printer cartridges, and add any used paper such as old memos and letters, computer paper, newspapers, magazines, clean cardboard and old telephone books to a household pile or sack for recycling in your home office. (To find out if and when there is a used paper pickup or community recycling depot in your area you can call 0800 022 112 or email info@mpact.co.za). In addition, take any old electronic equipment to a proper recycling depot and make sure it does not go into a landfill.

“Secondly, cut down on home office paper use by not printing out emails unless absolutely necessary, filing your documents electronically (with a good backup system), setting your printer to use both sides of a page, and changing to electronic billing as far as possible.”

Writing in the Property Signposts newsletter, Everitt also suggests the use of “green” cleaning products in your office, and stationery and office supplies with a high percentage of recycled content, as well as refilled printer cartridges and rechargeable batteries.

“Fourth, tackle the power usage issue. Make sure any new home office equipment you buy is Energy Star-rated, because this will typically use 20 to 30% less power than non-rated equipment. Use flat computer screens rather than the old CRT monitors to cut computer power consumption by about a third.

“Use CFLs or LEDs instead of ordinary globes and plug all your electronics into a power bar with surge protector that can be turned off at the end of the workday, because equipment left on standby still consumes power.”

And finally, he says, you should give yourself credit for every day you can spend working in your home office instead of commuting, because this reduces energy and resource consumption and helps cut carbon emissions.

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The Problem With Installment Sale Agreements

Posted on May 15, 2013 by Barry Davies

property-installment-saleA person wishing to purchase a property in South Africa may conclude what is known as an “Installment Sale Agreement” (Instalment Sale Agreement) in terms of which the purchase price is paid in installments.  The contract provides certain protection to the parties in that the contract itself may be registered at the relevant deeds office.  In order to conclude an Installment Sale Agreement the property which is to be sold must be residential property which then obviously excludes commercial, agricultural, industrial and other properties.  In addition the purchase price must be paid by way of two or more instalments over a period of at least twelve months. There are numerous formalities which must be complied with in order to make the contract valid.  Accordingly it is wise to ensure that an attorney drafts the actual contract to ensure that the statutory requirements are all fulfilled.

Various information must be disclosed in the Installment Sale agreement including obviously the names of the buyer and the seller, the purchase price and the description of the property but also other information such as the name of the mortgagee and the transfer duty payable.  Because of the fact that transfer duty must be paid within 6 months of the contract being concluded, one must remember to do so otherwise the purchaser will pay penalties plus interest.  The penalty is normally 10%.

Whilst, on the face of it, the Installment Sale Agreement would appear to be the solution where one cannot pay for the purchase price of a property shortly after the contract is signed, unfortunately, because of the introduction of the National Credit Act, there are a number of problems in relation to concluding an Instalment Sale Agreement.  Effectively the seller is providing credit to the purchaser and therefore has to comply with the National Credit Act.  This means that if the amount which is being paid off is more than R500 000, the seller has to register as a credit provider.  In addition, because the seller is providing credit, the seller must therefore ensure that the purchaser can in fact afford to pay the monthly instalments and other amounts due in terms of the Instalment Sale Agreement otherwise it could amount to “reckless lending”.  This means that the seller must assess the financial situation of the purchaser including the purchaser’s income and expenditure.  The major hurdle here is that very often one wants to conclude an Installment Sale Agreement because of the fact that the purchaser could not obtain a loan through a financial institution.  The question which arises is, why the purchaser can afford to pay the seller if the financial institution made the decision that the purchaser could not afford to pay the monies due in terms of the loan which was going to be secured by a mortgage bond registered over the property.  This is almost an indication that the purchaser does not qualify for the credit and that the conclusion of the Installment Sale Agreement by the seller may amount to reckless lending. This obviously is not always the case as different criteria may apply and the interest rate which the seller is prepared to charge may be lower than the interest rate which the financial institution would charge.

This is an indication of why the National Credit Act should never have applied to South African property.  Whilst many people have argued that the National Credit Act helped saved South Africa from a worse financial crunch, it is quite clear that the banks were not lending monies recklessly prior to the National Credit Act being concluded in regard to property transactions.  The National Credit Act should have applied to wasting assets such as cars and furniture but never to property.  The result is that the Act has now hurt the very people it was supposed to protect.  Because of the National Credit Act, many people cannot obtain mortgage bonds which not only has the effect of reducing the value of properties in general, but more importantly has the effect that such persons cannot buy houses in South Africa.  They are accordingly forced to rent properties and because this increases the demand for rentals, it means that rentals are higher than they would have been had more people bought properties.  The result is that the very people that were supposed to be protected are now suffering because they cannot buy houses and at the same time are paying higher rentals than they would otherwise have paid.

It is therefore unfortunately a fact that because of the National Credit Act, one often cannot conclude an Installment Sale Agreement and that as a result much fewer Installment Sale Agreements are being concluded than would otherwise be the case.

 Installment Sales Article courtesy Peter Dykes | Attorneys Dykes Van Heerden

 

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The South African property market and employment

Posted on May 13, 2013 by Barry Davies

south african property There’s good news and bad news for the real estate industry on the employment front this month, says Berry Everitt, Managing Director of the Chas Everitt International property group.

“On the positive side, the new International Business report from professional services group Grant Thornton suggests that SA workers will receive higher wage increases than those in most other countries this year.

“This report is based on interviews with 3450 CEOs at the end of last year, and states that about 68% of South African businesses will increase salaries in line with inflation this year, while some 26% plan to award above-inflation increases compared to only 15% in the other BRICS (An association of emerging national economies including Brazil, Russia, India, China and SA) countries.

“And from a South African property point of view, this means that those in employment this year will have an improved chance of being able to qualify for a home loan and afford their own home.”

What is also encouraging, he says, is recent news from recruitment group Adcorp that income inequality between the races, and especially between blacks and whites, has declined sharply in the past decade, and could be eliminated entirely by 2020 at the current rate of progress, which sees the average white employee’s income rising by 5,3% a year while the average black employee’s income rises by 14,9% a year.

“On the negative side, however, employment numbers go up and down like a yo-yo from month to month, demonstrating the lack of sustainable progress being made in creating new jobs in South Africa and, by implication, an expanded South African property market.

Writing in the latest Property Signposts newsletter, Everitt notes that over the past six months, the net gain in jobs seems to have been only around 20 000, with probably half of those being in the informal sector.

“In addition, the latest statistics show that the number of formal employers continues to decline, having shown a drop of 2000 in the last quarter of 2012, and standing now at 10% fewer than at the start of the global financial crisis.”

It is thus not surprising, he says, that ABSA’s latest SME Index shows an increase in the number of people who are self-employed – to some 1,25m, or 10% of all the working adults in the country.

“But while the entrepreneurial spirit shown by these people, often in the face of retrenchment or company closure, is to be admired, we all know that it is notoriously difficult for self-employed people to obtain home loans, so most of them are effectively out of the property market for now.”

Consequently, he says, although both residential housing demand and South African property prices have been rising steadily for the past few months, the economic growth rate is going to have to rise and send employment numbers up before the next real property ‘boom’ can realistically be expected.

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Sectional Title: Extensions involve lots of red tape

Posted on April 24, 2013 by Barry Davies

sectional-title-complexSectional title property owners who would like to extend or alter their units to create more space will probably have to spend a considerable amount of time and money to get the necessary approvals.

Before any Sectional title extensions can be started by an owner they will need to ensure that they have the following:

· The approval of the body corporate, authorised by a special resolution of its members;

· The approval of every bondholder (bank) with an interest in the Sectional Title scheme if they intend extending the unit by more than 5% of its current area;

· An amended sectional plan and a new schedule of participation quotas, drawn by a land surveyor or an architect for submission to the Surveyor General and then registered in the Deeds Office;

· The approval of the local authority for the building work proposed, which can only be obtained after the changes to the sectional plan have been approved and registered.

It is worth noting, says Berry Everitt, MD of the Chas Everitt International property group, that approval to extend a section in a sectional title complex comes from the body corporate – not the trustees – and that a special resolution requires a 75% vote in favour (in number and participation quotas by the members of the body corporate present or represented by proxy at a meeting at which a quorum is present and of which at least 30 days’ notice has been given.

“However, owners who want to extend their sections must pay all the legal and administrative costs of changing the sectional plan and getting it approved and registered themselves. This is not a body corporate expense.”

On the other hand, he says, there is no question of an owner who wishes to extend having to “buy” the land on which he or she plans the addition. “All land within a sectional title scheme forms part of the common property and is owned in undivided shares by all the members of the body corporate.”

Writing in the Property Signposts newsletter, Everitt says the benefit to the body corporate of any extension will come in the form of a higher levy paid by the owner as a result of the increase in the participation quotas resulting from the increase in the floor area of the section – and that this will apply even if the section is extended vertically rather than horizontally.

sectional-title-property

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Heightened demand for property in Constantia

Posted on April 17, 2013 by Barry Davies

property in constantiaThe great heritage suburbs of South African property – including the likes of Constantia  in Cape Town, Houghton in Johannesburg and Waterkloof in Pretoria – are enjoying renewed popularity among top professionals and captains of industry, and a surge in home sales, thanks largely to the value for money now evident in these areas.

“This revival is clearly reflected” says Andre de Villiers, the Chas Everitt International franchisee for Constantiaberg, “in the fact that our agents working on property in Constantia and Upper Constantia have sold more than R42 million worth of homes in these areas since the start of the year.

“Property in Constantia and similar areas has always been desirable, but these kinds of areas were regarded by many as having become overpriced during the last boom, when it also became fashionable for well-to-do buyers to acquire more modern homes in upmarket security estates further away from city centres.”

But now the pendulum has swung the other way, he says. “Living in a heritage area like Constantia with leafy avenues, gracious homes in large grounds, easy access to the city centre and above-all, proximity to excellent schools, is once more the very ‘in’ thing to do – especially when the area also contains superb restaurants and top-class entertainment and sporting venues.

“In addition, of course, home prices in these areas have moved very little in the past four years, and many existing owners of property in Constantia are now also of an age when their families are grown and they are looking to downscale to smaller properties that are easier to maintain. They are generally negotiable on price and as a result, there is currently really good value to be had, to add to the cachet of an address in one of the country’s top areas.

“And on top of that there is great potential for excellent investment returns as the South African property cycle turns upwards again – a fact which has not been lost on high-end buyers, knowledgeable as they usually are about the real estate market.”

property-in-constantia-cape-townIn terms of property in Constantia, says Chas Everitt International area specialist Shanaz Sity-Herskovitz, home prices currently range from around R2 million to R13,5 million, but there is a “severe shortage” of properties available for less than R3 million. “Demand has surged since late last year and now even properties that had been on the market for a considerable time have been sold. Constantia Hills in particular is now very sought-after because it is zoned for Sweet Valley School and close to the American International and Reddam schools.”

Properties she has sold since January include a traditional Constantia family home in need of modernisation which went for R2,2 million and a stylish modern property in Constantia sold for R3,75 milllion, as well as a clutch of properties sold for between R2,6 million and R3 million.

And there is also strong demand, she says, for rental property in Constantia at rates between R10 000 a month for a smallish townhouse and R15 000 to R25 000 a month for a family home.

Rental demand is also high in Upper Constantia, especially from multinational corporations who favour the newer “security estates” in this area for their senior management working in South Africa on assignment, according to Chas Everitt International area specialists Marion Bolton and Sally Gracie. Rentals for the luxury homes in such estates start at around R25 000 a month and can reach R80 000 a month.

However, the Constantia estate agents say, there is also rising demand, notably from foreign buyers, for homes to buy in Upper Constantia – where prices range from around R3 million to well over R30 million – and there is a definite shortage developing in the R4,5 million to R5,5 million range that is unlikely to be alleviated by new residential property development because there is very little undeveloped land available and existing Upper Constantia properties can only be subdivided to a minimum of 1350 square metres.

“Above that level, we find that sellers are still often pitching their initial asking prices too high. Those who are keen to sell quickly now should not that on traditional freehold properties, the average difference between asking price and actual selling price is currently around 20%, while the top-end homes in security estates have been selling for about 25% less than the asking prices.”

Recent sales by Bolton and Gracie include a luxury three-bedroom townhouse in an upmarket estate sold for R2,75 million, a traditional family home sold for R6,65 million and a four-bedroom luxury property in an outstanding position which sold for R14,5 million.

For more information contact Andre de Villiers on 021 712 7002

 

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