Real Estate Investor Magazine South Africa July 2013 | Page 23

REI Residential
REI Residential

Guarantees For Rentals
Property investors who invest in short-and
long-term rentals face big challenges when
the tenant leaves. Often they find the security
deposit doesn’t cover damages to the property,
or a tenant absconds and they lose that income
until they secure a new tenant. There have been
cases in the holiday rental market where property
damages have cost the property owner anywhere
from R200 000 up to R700 000.
What has happened in the short-term rental
market is that due to changes in the macro
environment, a one month security deposit has
become insufficient. With the demand now for
two to three month’s rental as a security deposit,
it is difficult to conclude rental agreements.
On Friday 17th May GEXsa officially launched
in Cape Town – Guarantee Exchange South
Africa provides much-needed guarantees to longand short-term rental owners and agents should a
tenant abscond or leave the property in a bad state.

Concern Over Home Loan
Legislation

Protect Against NonDisclosure

The Banking Association of SA has warned
against interference in the ‘stable’ banking sector,
fearing banks may be forced to make home loans
to clients who do not qualify. Concern has arisen
following Human Settlements Minister Tokyo
Sexwale’s intention to ‘deracialise’ residential
suburbs, using the Home Loan and Mortgage
Disclosure Act, among other measures.
Association head, Cas Coovadia, warned that
the government should not interfere in the
sector. ‘We have the second most stable banking
sector in the world. We shouldn’t do anything
to destabilise it,’ Coovadia is quoted as saying.
But Xolani Xundu, Sexwale’s spokesperson,
denied the Minister intends to force banks to
give home loans to people who do not qualify.
“The legislation obliges banks to give loans to
people of all races. It creates dialogue between
the Minister and the banks.”

In terms of the Consumer Protection Act,
as it stands right now, says Lanice Steward,
managing director of Knight Frank Anne
Porter, all sellers of residential properties must
sign a condition report on the property that
they are selling, providing all known details of
defects on the property.
The Property Practitioners’ Bill, which is being
drafted by the Estate Agency Affairs Board
and will govern all estate agents and real estate
principals in South Africa, will include this as
a requirement from all agents, to bring it in line
with the Consumer Protection Act.
However, it is imperative now, said Steward,
that all sellers sign this condition report when
they list their property. This should be supplied
by the agent with whom they are working and
should become part of the agreement of sale.
This condition report is to protect the seller
against non-disclosure, she said.

Valuable Input

Laurie Wener, MD
Pam Golding Group

Paul Abbott,
Franchisee, Rawson

Bill Rawson,
Chairman, Rawson

Johann le Roux,
Executive Director,
Propell

“There has been a
resurgence of investor
interest and buyers
of second homes in
all suburbs, but most
notably those along
the coastline. Middle
market family homes
are in demand in areas
which offer good
schooling.”

“Landlords today,
appreciate that a good
rental agent, using the
‘tools’ available to such
people (Payprop, TPN
and Search Works)
are able to weed out
99% of unreliable and
irresponsible tenants.”

“Two R1 million units
will probably give a
better return than
one at R2 million.
Similarly, three at
R700,000 will probably
bring in a better return
than one at R2,1
million.”

“If you’re considering
buying a sectional
title unit for the first
time, there are many
things to consider
and investigate before
choosing the scheme in
which to buy into.”

www.reimag.co.za

Martin Goodman,
Director, Rentshield
“It’s the perfect time
to be in the property
rental industry –
as indicated by
Rentshield’s research
survey, the demand
for rental properties
outstrips supply.”

July 2013 SA Real Estate Investor

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