TRENDING
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
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