Putting your home up for sale requires some preparation on your part. Before listing your house with Property.CoZa, you will need to obtain all the necessary compliance certificates, of which some are required by law.

In brief, compliance to electrical, water, gas and electric fence certificates is prescribed by law and carries penalties for non-compliance. The beetle certificate is not prescribed by law anymore, but it is customary to include it in standard Offers to Purchase, especially for property situated in coastal regions. Banks also often include these certificates as requirements for a loan for the property that they are bonding in order to ensure that the property is compliant for their security purposes. Let’s take a deeper look into each compliance certificate:

1. Electrical compliance certificate

This certificate must certify that the electrical installation on the property complies with the prescribed standards of safety. The Electrical certificate must be issued by a qualified and registered electrician.  The requirement for the electrical certificate required in property transactions is governed by the occupation Health & Safety Act, Act 85 of 1993.

In respect of property transfers, the regulations prescribe as follows:

• It is obligatory to obtain an electrical certificate where ownership changes; and
• Save where there is a valid certificate in place that is (1) not older than 2 years, and (2) there were no alterations to the installation since the issue of the current certificate, a new certificate is NOT required for purposes of transfer. The Seller can then hand the current certificate to the purchaser.

The Buyer and Seller may nonetheless agree that a new certificate must be provided, even where the current certificate is less than 2 years old and no alterations or additions to the installation have taken place (which is often the case in many standard Offers to Purchase).

Although the onus is on the Seller to obtain this certificate and pay for the costs of repairs, this obligation can be shifted to the Buyer by way of agreement.

2. Electrical Fence Certificate

The electric fence certificate will certify that the electric fence installation complies with the Occupational Health & Safety Act.  The Seller and purchaser can agree to waive the requirement to supply an electric fence certificate.  A new certificate only needs to be obtained if a change was made to the electric fence installation after the original certificate was issued.  It will also apply to a sectional title property.

The certificate is required where:

• there is a change in ownership of a property after 1 October 2012 at which property there is an electric fence; or
•  there was no change of ownership but there has been an alteration or modification to an electric fence after 1 October 2012, even if it was installed before 1 October 2012.

There is no mention in the legislation of the certificate being valid for a fixed time period once issued (unlike electrical certificates) and once obtained it can be transferred from one owner to the next, provided of course the agreement of sale does not specify a time period and provided there were no alterations to the installation after the certificate was issued.

With sectional title properties, the electric fence is generally situated on the common property which is deemed to be body corporate property. Every owner of a section within a sectional scheme is also a member of the body corporate and is also therefore an undivided part share owner in the common property. When a sectional title unit is transferred there is also a change of ownership (even though only in part share) of the common property, and as a result of the change of ownership of property on which the electric fence is situated it will be necessary to comply with these regulations.

Given that the management of common property falls within the duties of the body corporate, it is adequate for the body corporate to have a compliance certificate issued for the electric fence of the entire scheme, which can be produced as and when called upon to do so. The body corporate should have a new certificate issued every time there are alterations done but it would not be necessary to have a new certificate issued every time there is a transfer within the scheme.

What happens within a gated estate that is not sectional title but free-standing erven where part of the fence is on the erf transferred (commonly referred to as homeowners’ associations)?

As discussed above, the compliance with the regulations is triggered when there is a change in ownership of property on which an electric fence installation exists. Technically where there is a change in ownership of property within a homeowner’s association on which an electric fence exists (typically your perimeter properties) then a certificate would need to be issued or be in place. It does however seem unfair that all the members of a homeowner’s association benefit from an electric fence, but only those properties on which the actual fence is built would need to have the certificate issued. As a result, our view is that, as in sectional schemes, it would be more practical for the homeowner’s association to have a certificate issued for the entire electric fence installation which can be produced as and when required for transfers.

3. Water Installation Certificate

In 2011, the City of Cape Town Municipality passed a new water by-law which requires that, with effect from 18 February 2011 onwards, all Sellers of properties within its jurisdiction must furnish a Water Certificate (which has loosely, and in our view, incorrectly been called a Plumbing Certificate) to the municipality before transfer of ownership.

Note that:

• This requirement is only applicable to properties that are situated within the jurisdiction of the City of Cape Town Municipality.
• The certificate is required for both freehold and sectional title properties.
• It is not a full plumbing check and fix which should be explained to the Buyer. The requirements of what needs to be certified in a Water Compliance Certificate are very specific and limited (as listed below) and it is for this reason we believe that calling these certificates “Plumbing Certificates” is misleading, as it may lead purchasers to believe that a comprehensive plumbing check is being conducted and certified.
• Although the by-law does not specifically say that the certificate must be provided to the purchaser, it has become commonplace to include such a provision in the Offer to Purchase. It safeguards the purchaser who then knows that his property at least complies with the requirements of the City’s water by-law – and the Seller is in any event obliged to lodge it with the City BEFORE transfer.

What does the Water Installation Certificate say?

This Certificate confirms that:

• The water installation conforms to the National Building Regulations.
• The property’s water meter is registering.
• There are no defects that can cause water to run to waste.
• No rainwater leaks into the sewerage system.

The intention of the legislation:

• Manage water resources and water loss.
• Protect the Buyer from latent defect claims and high water bills due to leakages.
• Health and safety (not allowing a cross connection between storm water and sewer).
• Ensuring water meter accuracy.
• Provide an opportunity to gradually eliminate the increasing number of storm water connections into our sewers that are putting capacity pressures on our sewerage network, treatment capacity, and which are illegal.

The plumber attending at the property basically does the following:

• Checks that the water meter is standing still when all taps are closed (this means there are no leaks on the property).
• Checks the roof gutters / storm water drains and the sewerage manholes (to ensure the rainwater flows into stormwater drainage and the sewerage in the sewerage drainage with  no cross connection).
• Checks that the geyser is up to SABS standards.
• Checks pipes under basins / sinks.
• Checks that all external pipes are bracketed properly. In respect of all other plumbing works or sanitaryware which is not working properly. This may fall under either a latent or patent defect and is a matter to be resolved between the seller and purchaser, bearing in mind the principles applying to voetstoots clauses.4. Gas Certificate

A gas certificate will certify that any gas installation on the property complies with the Occupational Health & Safety Act (effective October 2009), where applicable.  If the property only makes use of electricity, no gas certificate is required.

Legislation stipulates the following:

• From 1 October 2009, it is required that any person installing a liquid gas appliance at a property must have a Certificate of Conformity issued in respect thereof.
• The certificate may only be issued by an authorised person registered as such with the Liquified Petroleum Gas Safety Association of Southern Africa (LPGAS), after he has inspected the installation and is satisfied that it is safe and leak free.
• Gas installations for which certificates of conformity are required would include built-in gas fires or braais, gas stoves, hot water systems and the like.
• Furthermore, in terms of Regulation 17(3) of the Pressure Equipment Regulations, the law speaks of a certificate being required after any installation, alteration, modification or change of ownership of property which necessarily implies that a certificate would need to be in place or issued upon the transfer of a property.
• The parties cannot contract out of it – it is required in respect of all properties where there is a gas installation, whether the owner lives there, rents out the property or whether it is vacant or stands empty for most of the year.
• Unlike electrical certificates, there is no mention of how long the certificate is valid for once issued in the legislation, although many standard offers to purchase will put a time frame on how old the certificate that is provided may be (usually two years).
• Ordinarily in terms of the offers to purchase there will be an obligation placed on a Seller to obtain the certificate prior to transfer for delivery to the purchaser after transfer. As with the other certificates, it is always better for the inspection and any remedial work to be carried out prior to the date of occupation by the purchaser and even earlier due to bank and bond requirements, as mentioned before.5. Beetle certificate

The beetle certificate will certify that the wood structures on the property are free from certain beetles that eat and destroy wood.  This certificate is not provided because of any legislation, but it is a practice that has developed over the years and has become firmly embedded in property transactions especially in the coastal areas like Western Cape and KwaZulu Natal.

The most common beetles that might have an impact on properties are:

• European house borer (Hyloytopus bajulus);
• Longhorn beetle (Oxypleurus nodeiri); and
• West-Indian drywood termite (Cryptotermes brevis).

Some noteworthy points:

• The Seller and purchaser can contract out of the requirement to provide a beetle certificate. However, if parties agree that no beetle certificate is necessary and the bank requires it for the purchaser’s bond, then it will need to be provided at the purchaser’s expense. Obviously if it is a cash deal, this does not present a problem.
• The certificate is usually not required in sectional title schemes as these are generally more recent buildings with little or no timber. However, where there is a risk of beetle infection in a sectional title unit, for example where an old building was sectionalised or where you have a top floor unit with wooden beamed roofing, it may be prudent to provide for a beetle certificate.
• The Seller and Buyer can agree on the validity period of the certificate, so there is also no time requirement like with an electrical certificate. (i.e. not older than two years).  They can also agree that the Seller does not have to supply a certificate as there is no obligation on the Seller to do so.  It is always better to supply the certificate than not, to avoid any issues later.

It is always recommended that Sellers do their inspections at the listing stage and then they will know what they are in for in terms of repairs. In addition, although it is usually required that the Seller should provide the purchaser with the certificate by no later than the date of transfer, it is best that the inspection and remedial work is done before occupation by the purchaser and better still even earlier, as most banks now request a copy for purposes of clearance of the bond for lodgement.

Source: Abrahams & Gross Attorneys

March 6, 2020

With concerned expectation for the 2020 Budget Speech, South African consumers prepared themselves for the worst. Speculation of a possible VAT increase to 16% had already put a damper on everyone’s mood and consumers prepared themselves for worse things to come. Instead, it seems that 2020 is a year of self-reflection for the South Africa Government. Promises have been made to reduce Government’s spending and to focus on kickstarting the economy by motivating consumers to save more money and to spend it at the right places.

There was some good news for the property market and some points raised by Finance Minister, Tito Mboweni, will contribute to Government’s effort to grow the economy and stimulate the property market:

1. No increase in VAT and exemption of transfer costs on properties priced at R1 million and below

Treasury reported that new tax increases could harm the economy’s ability to recover prompting the decision that there will be no major tax increases apart from annual hikes in fuel and Road Accident Fund levies.

The increase of transfer duty fee exemption on properties (from R900 000 in 2019 to R1 million in 2020) could open the door to more potential buyers. “South Africa is experiencing a buyers’ market at the moment and this will be a welcome relief for buyers buying below R1 million,” says Sandy Walsh, MD Property.CoZa. According to Lightstone, the affordable market segment reflects the greatest growth over the last few years. “This trend is likely to continue for some time and having no transfer costs for these transactions may help to grow this market further,” says Walsh.

2. Personal income tax relief

Personal income tax brackets will be changed so that individual taxpayers will pay around R2 billion less in income tax. The changes will mean that someone earning R460,000 a year will see their taxes reduced by nearly R3,400 over the next year.  Those who earn around R265 000 a year will see a tax saving of more than R1 500. According to Mboweni, someone who is earning R10 000 a month will pay 10% less in tax. Someone earning R100 000 a month will pay about 1.5% less.

Income taxpayers are already shouldering 52% of SA’s tax burden, compared to the contribution from VAT (26%) and companies (16%). This should put more money in the consumers pocket, in turn helping them to afford homes that are more suited to their needs.

Further to that Mboweni also announced that the annual limit on contributions to tax-free savings accounts will be increased from R33,000 to R36,000 from 1 March 2020 may motivate consumers to save more on a yearly basis.

3. Support Lending

Working with the financial sector, a pilot of the Help to Buy scheme has supported over 2 000 families to buy their own homes. For every R1 subsidy provided by government, the scheme gathers R8 from the private sector. In a single year, the Help to Buy scheme has supported nearly R1 billion in new lending.

Other factors that will have an indirect effect on the housing market are:

• Increase in fuel levy

Over the past few years the constant increase in the fuel levy has motivated property buyers to buy property conveniently located close to their place of work, amenities and schools.

The total tax on 93 octane petrol in Gauteng will be increased to R5.88 a litre, and to R5.74 for diesel. This means that tax is now 37% of the petrol price and 39% of the diesel price.

• Energy supply

It is no secret that South Africa has been burdened with unreliable power supply by Eskom. Government have acknowledged the negative effect Load Shedding has had on investor confidence over the past few years. In a positive move, although a plan is in place to restore the country’s energy supply infrastructure, Government will soon allow for municipalities to purchase electricity from independent power producers. Hopefully municipalities will pay these independent contractors in order to continue power supply.

Mboweni announced that from 1 April 2020, the incandescent light bulb levy will be increased by R2 from R8 to R10, to encourage the uptake of more energy-efficient light bulbs. Government is also considering product taxes on electrical and electronic waste. Energy efficient products have become trendier over the past decade and Government’s move to encourage consumers to reduce their environmental footprint and effectively save money through energy saving is encouraging.

• Learning, health and social development

A country without residents that work and earn money, is a country that will fail and go broke. Mboweni reported that 8.2 million young people between the ages of 15 and 34 are not in education, employment or training.

Government have emphasised their commitment to helping them. Raising skills and improving the matching of young people and jobs is an important focus of the Presidential Youth Employment Intervention. “For a fast-growing economy we need to make sure our children are well educated, our people are healthy, and our money is invested properly,” promised Mboweni. To date, Jobs Fund projects have created more than 175 000 permanent jobs and helped 21 000 people into internships and created 59 900 short term jobs. Of these, 65% went to youth.

Helping the younger generation to be educated, skilled and employed, will create the opportunity for them earn the income and to either rent or acquire their first home.

February 27, 2020

You have come to that point in your life where you have decided to invest in your future wealth by buying a property. Purchasing a home and registering a home loan can be a stressful and lengthy process. It helps to know the processes and parties involved and the steps required for home loan registration.

Parties involved:
•  Seller
•  Property Practitioner / Estate Agent
•  Buyer
•  Bond Originator
•  Transferring Attorney (appointed by seller to transfer the property to the buyer’s name)
•  Home loan Attorney (appointed by the bank granting the home loan)
•  Cancellation Attorney (appointed by the bank cancelling the home loan of the seller, where necessary)

1. Do your sums

First things first, you will need to calculate the monthly home loan repayment that you will be able to afford. The amount is calculated based on your monthly household income and expenses. You can also check your bond repayments on a desired bond amount. Make use of our handy “Bond Calculator” and “Affordability Calculator” on www.propertycoza.com.

2. Understand the costs

Putting down a deposit

You may need to put some of your own money on the table before you can buy a house. Depending on your financial situation, some home loan products allow you to qualify for larger home loans without paying a deposit.

The right package

The banks have a wide range of financial products tailored to meet your individual requirements. It’s important to choose a Home Loan package that works for you.

Plan for additional costs

Be aware of other once-off costs that you will have to pay, over and above the deposit. These include initiation and administration fees, legal costs, bond registration fees and VAT/transfer duty.

3. Get pre-qualified

Getting pre-qualified will give you an indication on whether you qualify for a home loan or not and will let prospective sellers know you are a serious buyer. Get in contact with one of our knowledgeable bond originators at Property.CoZa Financial Services who will assist you through the process of getting pre-qualified.

4. Find a property

Now that you know what you can afford, it’s time to start with the big search.

First you need to determine what your needs are when it comes to searching for the perfect home. Secondly determine in which area you would like to live.

5. Partner with a Property.CoZa Property Practitioner

When you have identified the areas that you feel you would like to buy, choose one of our many Property.CoZa Property Practitioners in that area. They are area specialists and will be able to discuss a full area report about what the average selling price is of properties in that specific area.

6. Sign an offer to purchase (OTP)

Once you and your Property Practitioner have managed to find your perfect property match. You offer to buy a property from the Seller by signing an Offer to Purchase (OTP) which the Seller will consider and either accept or decline. The estate agent will present the OTP to the Seller. Once the Seller signs the OTP, the contract is valid and conveyancing process can begin.

7. Apply for a home loan through Property.CoZa Financial Services (PFS)

Our offices work closely with our bond origination specializing and they will send your OTP to PFS to handle the process of applying for a home loan. They will apply to multiple banks, including your own, for a home loan and will come back to you with various offers from the banks, allowing you to choose the option best suited to you.

Required documentation for First Time Buyers:

• Valid South African ID or passport and a copy thereof
• A copy of your spouse’s ID or passport, if married
• Proof of current residential address (i.e. municipal account, Telkom account or valid TV license)
• Employer’s physical address and telephone number
• Marriage certificate
• Pay slip
• Offer to Purchase

Required documentation for existing homeowners:

• Valid South African ID or passport and a copy thereof
• A copy of your spouse’s ID or passport, if married
• Proof of current residential address (i.e. municipal account, Telkom account or valid TV license)
• Employer’s physical address and telephone number
• Marriage certificate
• Payslip
• Offer to Purchase
• Six months statements on the existing home loan if you have a home loan with another financial institution
• Existing home loan account number for existing customers
• The registration number of the company, trust, close corporation, if applicable

8. Accept the quote

Select a home loan offer that suits you best. Bear in mind that the amount might be lower than expected.

9. Instruction sent

The Seller will instruct their Transferring Cancellation Attorney to cancel the existing bond (if applicable). The relevant conveyancing Attorneys are instructed to carry out the transfer and bond registration by the bank. Title deeds and cancellation figures are requested from the bank currently holding the bond. A rate clearance is from the local authorities/municipality.

10. Signing of documents

Once all the conditions have been met, the transfer and bond documents are drafted by the relevant attorneys. The buyer and seller sign the respective transfer documents. The buyer signs the bond documents. All relevant transfer costs are paid by the buyer. The seller pays their rates accounts, including advanced rates, if required. The transfer attorney applies for a transfer duty receipt from SARS, a Rates Clearance Certificate and a Levy Certificate, then  makes the necessary payments.

11. Compliance certificates to be supplied

The seller is now required to provide the following compliance certificates:

• Electrical
• Plumbing
• Beetle (where applicable)
• Gas
• Electric Fence

12. Guarantees are provided

The Attorneys provide Guarantees from the Buyer’s bank for the purchase price, or the balance of the purchase price, if a deposit is being paid up front. The Seller’s existing bond on the property is prepared to be cancelled. The Attorneys ensure FICA compliance as a protective measure against fraud.

13. Lodgement

When all documents are signed, costs are paid and certificates have been obtained, the documents are prepared for lodgement at the Deeds Office.

14. Registration & Proceeds

The Conveyances appear at the Deeds Office to register the Title Deeds.

Ownership passes from the seller to the buyer.

The buyer’s new bond is registered.

The guarantees are paid.

The seller is paid out the net proceeds.

The Estate Agent is paid their commission.

The new owner takes occupation of their new property.

15. After the sale is complete

After approximately three months, the original Title Deed and Bond documents are delivered back to the Attorneys by the Deeds Office. The original Title Deed is delivered to the Bank (if the property is bonded) or to the Owner (if not bonded). A copy of these documents is normally sent to the buyer and seller by the Attorneys.

February 25, 2020

Times are changing… Not only are we living in a society where the economy is slow, causing consumers to tighten their purse strings. Droughts come and go more often than what we were used to and we as consumers need to adapt our lifestyle to make ends meet.

South Africa is a versatile country where a variety of climate areas exist. From warm and tropical areas to dry and bushveld like landscapes, our country offers a lush variety of plant life. What could be more beautiful than surrounding your home with a beautiful garden? Planting living works of art to beautify your home, giving you a place to find serenity and joy. But it’s not always affordable and planting and maintaining a beautiful garden takes time and energy.

With the recent drought in the Western Cape and other parts of the country, consumers have learned more about their water resources and come to understand how fragile and costly water supply can be. There is no need to take away the pleasure of a garden or to only pave or plant rocks in your garden! Rather opt for planting waterwise plants that are low maintenance and can cope with periods of heat and low rainfall, that way you will reduce your water bill. Many homeowners, especially in the Western Cape, have installed water storage tanks to collect rainwater to feed into their gardens over the dry times. Capetonians have learnt to comply with the water restrictions imposed, currently at Level 3, being 105 litres/day/person allocated to each household.

We have spoken to the garden experts and here are some suggestions of stunning waterwise plants that will suit your garden:

Tulbaghia (Wild Garlic) is one of the hardiest species on the list and has become very popular with gardeners and landscape architects around the country. It has a long-flowering period, and when mass planted creates a stunning display with its pinkish-mauve flowers. It can survive extended dry spells as well as heavy rain. This hardy plant is generally fuss-free provided it is used in a sunny to semi-shade position. Clumps can be split after a few years and used elsewhere in the garden.

Popularly known as Hen-and-chickens, Chlorophytum comosum can be used to good effect to cover bare soil in semi-shaded conditions in your garden. Mass planted they make a stunning display and work beautifully on a semi-shaded embankment or on a retaining wall. The variegated varieties also brighten up those dull spots in the garden, whilst the green variety adds a beautiful, lush forest effect. Some home owners prefer to cut the ‘chickens’ off the mother plant, but it is often preferable to leave these in place as they will soon root themselves and help to spread the plant around your garden, thereby helping to prevent soil erosion and aiding water retention.

This beautiful succulent groundcover is a favourite for retaining walls and dry patches of soil where other plants may struggle. It is rich green in colour, with dainty pinkish-red flowers and can spread rapidly, helping to cover an area in a short space of time. It can be used to stabilise soil in areas which may be susceptible to run-off or erosion and can be used as a lawn replacement for difficult to reach areas. A golden-coloured variety is also available.

These grass-like perennials have become ubiquitous on South African verges and in gardens. They are very hardy and once established require little watering or maintenance. A few varieties are available, including Dietes grandiflora with white flowers, and Dietes bicolor with yellow flowers. They can be mass-planted to create beautiful backdrops in a flowerbed or used as filler shrubs for dry areas in the garden.

Also known as Pork Bush or Elephant’s Food, this indigenous evergreen is an environmental miracle worker, with the potential to tackle carbon emissions like no other plant can. Whether you’re a succulent fan or have yet to hear about this magnificent tree, here are 5 things you probably didn’t know about this wonder plant. Hectare for hectare, Spekboom thicket is ten times more effective than the Amazon rainforest at removing carbon dioxide from the atmosphere. One hectare of Spekboom can sequester between 4 and 10 tonnes of carbon per year. This makes it a powerful tool in the fight against climate change and the move towards a zero-carbon world.

Tips for water-wise gardening: 

1. Go indigenous, planting what occurs naturally in your area. Exotic plants often need more water.
2. Group plants with similar water needs together so you don’t overwater less thirsty plants while attending to the thirsty ones.
3. Use mulch to stop moisture escaping.

Source: Glenis Ebedes

February 7, 2020