Real Estate Investor December 2020 December/January 2021 - Page 38

In the early stages of the national state of disaster brought on by Covid19 , evictions were not allowed . It would have been politically contentious and downright unfair for people to be evicted from their homes just when we were all required to stay at home . So what has changed ?

As hard lockdown gave way to gradually lessening restrictions , the status of eviction orders also changed . For a while eviction orders could be granted but not executed , unless a tenant posed a danger to the landlord or the property . Now , as we near the ninth month of the State of Disaster , there is light at the end of the tunnel for property owners . Alert Level 1 evictions are being granted . In this article we look at the factors that constitute a reasonable eviction case .

Case by Case We have reviewed recent cases that have resulted in successful Alert Level 1 evictions , and have gained an understanding as to what the courts consider to be fair ( or ‘ just and equitable ’ in law ). Furthermore , there are time parameters that must be met before the court will order the Sheriff to physically evict the tenant .
Philander v Makiet While PIE and other rental housing legislation protects tenants against impetuous and unfair treatment by landlords , owners also have the right to the use and enjoyment of their property . As such , they must be allowed to evict a tenant who is illegally occupying premises . In an effort to ensure both parties ’ rights are respected , confusion has arisen as to what the courts will allow . Several cases have been heard that have helped the courts to define just and equitable eviction proceedings during this unprecedented time .
The case of Philander v Makiet was a significant watershed , decided by three judges in the Western Cape High Court . Although they arrived at the same conclusion , two of the judges expressed quite different reasons for their opinions . The judgment clearly explains the factors they considered in granting the Alert Level 1 eviction order , and what conditions must be present generally in the current environment .
“ Owners also have the right to the use and enjoyment of their property .”
In determining justness and equality , the court stressed that all relevant circumstances should be considered . What exactly are those circumstances ? The judgment states that “ Among those circumstances the availability of alternative land and the rights and needs of people falling into specific vulnerable groups are singled out for consideration .” In this case the tenant was a 19-year-old male with no dependants , whose grandparents and sister lived not far away .
The Time Frame Also Matters The availability of alternative accommodation is a key consideration . The time frame given for the tenant to vacate the premises is also important . And it must be reasonable not only for the tenant but also for the property owner : “ what date would be just and equitable upon which the eviction order should take effect . Once again , the date that it determines must be one that is just and equitable to all parties .”
“ If you are a landlord seeking eviction , you must make sure you can prove that your eviction is just and equitable .”
In this case , the tenant was originally given notice to vacate the property , fully within the terms of PIE and the Consumer Protection Act , more than 18 months previously . There was ample time to find suitable alternative accommodation . As there was no cooperation on the part of the tenant , and considering a wide array of circumstances , the court awarded eviction from the premises , to be vacated by 31 October . This was more than a month from the date of the eviction order .
Secure a Successful Eviction This case demonstrates that the courts will grant an eviction order under Alert Level 1 , allowing tenants a reasonable time frame to find alternative accommodation and vacate the property . If you are a landlord seeking eviction , you must make sure you can prove that your eviction is just and equitable . The illegal occupancy of the premises is not the only factor the court will look at . A judge will want to be satisfied that the tenant has access to alternative accommodation . Courts need to know that tenants will not be left destitute and without shelter .
You can facilitate this process by requiring your tenant to provide an address for potential alternative accommodation in the lease agreement . This will ensure they have a viable option , should you need to terminate the lease , and the court will be assured of the tenant ’ s security if you have to apply for an eviction order under Alert Level 1 .
SOURCES Simon Dippenaar & Associates
SA Real Estate Investor Magazine DECEMBER / JANUARY 2021 17
UNITED KINGDOM TRENDING PART 8 You don’t need money to make money Capital-raising & money-movement strategies SEAN THOMSON Sean Thomson, property investment coach at Wealth Trek, examines some basic ideas on raising capital for property investment deals in the United Kingdom, as well as the movement of capital between jurisdictions. TRENDING Below are some of the ways in which I have successfully raised capital, giving you a good idea of what is possible. 1 Angel Investors Angel investors are cash-rich, time-poor individuals looking for better returns. But how do you find these angels? How do you connect with them and what do you have to show them? It could be you are dealing with a sophisticated individual or even a family member – but whoever the investor, he or she must be treated strictly as a business partner. Our online Discovery Series touches on the use of a private finance proposal. The aim of this proposal is to outline the details of your business and its operations. I suggest you include the following: An executive summary The objectives of your business Your mission statement An overview of the national jurisdiction in which you would like to invest An overview of the local area in which you would like to invest, and any future plans you may have for this area Your strategy regarding finding leads and managing refurbishments and tenants, as well as any future sales Investment options, should anyone want to invest in your business I n our seventh article in this series, we provided some basic tips on UK cash-flow property strategies to help to get you started as an investor, such as buy-to-let (B2L), social housing and houses in multiple occupation (HMOs). We also explored flipping property for cash and how this can assist you with recapitalising your UK property business. This article – the eighth in the series – focuses on capital- raising strategies for property investment deals and explores how you can legally move money from South Africa to the UK. Capital-raising Strategies A lot of people I meet use the expression “it takes money to make money” as an excuse for their failure to achieve what they set out to do in life. All the successful people I have met (or whose books I have read) have one thing in common – they all started with nothing. The ability to raise capital is a fundamental skill you will need to develop, whether in business or in property, if you want to build a sustainable portfolio over time. My mentor got me to focus on this area when I started out 36 DECEMBER / JANUARY 2021 SA Real Estate Investor Magazine in property, helping me to shift my mindset from ‘asking for money’ to ‘offering an opportunity’. No one likes asking, but presenting an opportunity to someone – showing them how to safely double or triple the interest their money would earn in a short period of time rather than keeping it in the bank earning next to no interest – is a win-win situation. What do you need to take into consideration? The amount of money required to conclude the deal The loan term – that is, how long you will need the capital for The interest rate, looking at what you are prepared to pay The payment – how you intend to service the loan (for example, monthly or with one balloon payment at the end of the loan term) Security – that is, what you can offer as surety to provide assurance to the investor that their capital is secure. Details of your education, continuous professional development, and any mentors you are working with Your proposal can do the asking for you, in a sense. When meeting a potential angel investor, you can use the proposal as a guide when talking through your business, and ask if he or she knows of anyone who might be interested in investing. You may be surprised at how well this works. 2 Joint Ventures Investors you meet could well be interested in working with you, but might lean towards joint ventures rather than being paid a return on a monthly or per-deal basis. This means they will take a percentage of the profit. I have always believed that 50% of something is better than a 100% of nothing, but (and this is a big ‘but’) you should structure the deal in the following way. The investor must stump up all the cash required (possibly excluding any bank leverage you can arrange) and you can contribute the ‘sweat equity’. The investor then gets paid when you do – either once a flip project has been sold, or when you have refinanced a property and decided how to split the monthly cash flow. 3 Equity Release Leveraging existing assets to buy more property is something investors have been doing for a long time. When training people around the world, I have shown them that, by arranging a flexible option mortgage (known as a flexi-bond in South Africa), they can set up a drawdown facility that allows them to purchase more property. The great thing about being able to refinance UK property easily after refurbishment works is that, if you decide to leverage your home, you could raise from there to put into the deal, do the refurb, refinance the property, and pay back into your home account whatever you get back after refinance. 4 Houses Into Home Loans One reason why a lot of our FastTrack students invest in Wales is this hugely attractive scheme offered by councils within the Principality. If a property has been standing empty for six months or more, it may qualify for an interest-free refurbishment loan of up to £25k per unit. This loan is interest free for between three and five years. The council will take the necessary security on the property, and there is an application process, but this is clearly a fantastic scheme if you are in the market to buy distressed UK property, and want to force the appreciation through refurbishment. Money Movement What happens if you want to move capital from one jurisdiction to another? I would strongly advise that you use a forex broker rather than a bank to move your money around the world. A forex broker can easily better than rates you would get through a bank and in addition can provide you with a more personal service by assisting you with any exchange control queries and helping you with tax clearance applications. Forex brokers get paid from the margin on the underlying spot rate and since the rates offered to their clients typically come in 1-2% lower than what the bank would charge, there is absolutely no cost to you. When it comes to moving money offshore from South Africa, the following applies: You can move up to R1 million offshore using your annual Single Discretionary Allowance (SDA). This will include any spend on overseas travel, that is, international spend on South African credit cards or purchases of foreign currency cash. You can move an additional R1 million to R10 million over and above your SDA as part of your Foreign Investment Allowance (FIA), but this will require SARS tax clearance. Anything over the R10 million FIA allowance will require special approval from the South African Reserve Bank in addition to SARS tax clearance. All of the allowanced mentioned here are per adult, per annum allowances. Always apply for SARS tax clearance in advance and make sure all your tax affairs are in order. SOURCE WealthTrek SA Real Estate Investor Magazine DECEMBER / JANUARY 2021 37