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As presented by Dieter Deppisch

Head of Property Data Research for SAPTG

A division of Knowledge Factory (Pty) Ltd

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Contents SAQA 246735 ....................................................................................................................................................................... 3

Legal Frame Work ................................................................................................................................................................. 3

Land Use Control .................................................................................................................................................................. 4

Deeds Registries Act 47/1937 ............................................................................................................................................... 5

Deeds Records on SAPTG ................................................................................................................................................... 6

Servitudes ............................................................................................................................................................................. 7

Costs when buying property .................................................................................................................................................. 7

SA‟s land registration system ................................................................................................................................................ 8

Matrimonial Property Act 88 / 1984 ....................................................................................................................................... 8

Estate Agency Affairs Act ...................................................................................................................................................... 9

Estate Agency Affairs Board ................................................................................................................................................. 9

An Estate Agency markets & sells......................................................................................................................................... 9

Stakeholders ....................................................................................................................................................................... 11

Estate Agents ...................................................................................................................................................................... 11

Legal & Ethical Obligations ................................................................................................................................................. 11

Multi-listing System ............................................................................................................................................................. 12

Referral Networks................................................................................................................................................................ 12

Valuers ................................................................................................................................................................................ 12

Developers .......................................................................................................................................................................... 12

Global Quick View ............................................................................................................................................................... 13

SAPTG - Kick with CONFIDENCE ...................................................................................................................................... 13

Emotional Intelligence ......................................................................................................................................................... 13

EQ ... Is the Ability to ........................................................................................................................................................... 13

Improving Emotional Intelligence ........................................................................................................................................ 14

Services Seta Compulsory Legislation ................................................................................................................................ 15

Remember the following ...................................................................................................................................................... 15

Build a POE ......................................................................................................................................................................... 16

What does DITASA offer? ................................................................................................................................................... 16

When do we offer these Qualifications? .............................................................................................................................. 17

Dykes van Heerden ............................................................................................................................................................. 20

SA Homeloans .................................................................................................................................................................... 22

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SAQA 246735

Understanding the Real-Estate environment:

Demographics

Economics

Legal framework

Stakeholders

Legal Frame Work

SA Common Law

Developed by judges through court decisions.

Represents the body of precedent.

Applies automatically (unless specifically excluded by legislation or an agreement concluded in a contract.)

Acts of Parliament

Alienation of Land Act, 68/1981

Rental Housing Act, 50/1999 o Regulates lessor / lessee relationship

Sectional Titles Act, 95/1986

Share Block Control Act, Act 59/1980 o Share owner entitled to occupy a portion of a building owned by the company

(Rights: Use & Occupation Agreement)

Deeds Registries Act, 47/1937

Matrimonial Property Act, 88/1984

Housing Dev. Schemes for Retired Persons Act, 65/1988 o Regulates retirement villages

Financial Intelligence Centre Act, 38/2001

National Credit Act 2007 o Regulates the credit industry

Estate Agency Affairs Act 112/1976

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Land Use Control

Promotes the best use of land & resources for residential, commercial, institutional and recreational purposes. Property Use Is Controlled by:

1. Conditions / Restrictions within the title deed 2. Structure or development plans by local authority. (protects community welfare and

the environment )

Town Planning

Height : Number of storeys or max height above ground level

Parking: Number of bays required

Building: Area within which no building is permitted

Floor Area Ratios (FAR or FSR) Indicates the total floor space that may be built on the land

Use zones: The authorised use: e.g. Residential, Industrial, Church

Coverage: Portion of land that may be covered by buildings („footprint‟)

Density Zones: Number of dwellings allowed or the minimum erf size permitted

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Deeds Registries Act 47/1937

Each portion of land:

Must be identified and …

Must have a diagram drawn by a land-surveyor & approved by the Surveyor General‟s Office.

Real Rights

Can only be acquired by means of registration (deeds office)

The person/entity registered as the owner of the property is deemed to be the owner.

Registration serves as a notice to all that a real right has been legally transferred to that particular person or entity

Registered real rights can only be cancelled by a Court Order or a means within the Act.

Every deed must have valid reason for transfer (sale, donation or inheritance)

The person transferring the property, must be in possession of the title deed of the property.

Only a conveyancer may prepare a deed of transfer. Executed in the presence of the Registrar of Deeds.

Transfers of land must follow the transactions sequence.

Tripartite Agreement: Buyer and the third party are liable for payment of transfer duty. (in certain cases)

Limited real rights, such as servitudes are transferred by notarial deed of cession

Only owner can allow a mortgage bond to be registered over the property.

The owner must authorise a conveyancer to act on his behalf to transfer ownership. (and/or limited rights, and/or to register a mortgage bond)

The title deeds may be inspected by any person at the deeds office. These are public registers.

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Deeds Records on SAPTG

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Servitudes

Praedial: A benefit in favour of a piece of land over another piece of land. Registered in favour of the property.

Personal: Registered in favour of an individual. (Usufruct, Tenant income, Business Income)

Costs when buying property

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SA’s land registration system Ensures that :

A scientifically prepared diagram of each parcel of land to eradicate uncertainty as to the identity of the land;

There is security and an indisputable title to land;

There is continuity and completeness of records;

The deeds are meticulous and accurate

(deeds/ documents are thoroughly examined);

There is simplicity as far as the complexity of our law allows it.

There is effectivity & suitability as developed over the years

Matrimonial Property Act 88 / 1984

Married in community of property: Spouse to obtain written consent of other spouse, attested by 2 competent witnesses, to:

Sell, mortgage, burden with a servitude or confer any real right in immovable property forming part of the joint estate or enter into any contract for any of these purposes;

Alienate, cede or pledge any shares or mortgage bonds forming part of the joint estate;

Buy property through an installment sale as provided for in the Alienation of Land Act, 68 of 1981;

Bind oneself as a surety.

Joint Ownership:

2 or more registered owners

Mortgage bond - all owners must consent

A joint owner can only sell or let his/her own undivided share without obtaining consent from other owners

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Estate Agency Affairs Act

5 categories of estate agents:

Companies, cc’s, partnerships & persons NQF5 +PDE („principal estate agents‟)

Directors of estate agency companies as well as members & managers of cc’s

Persons working for or on behalf of a principal NQF4 + PDE („non-principal estate agents‟)

Persons, other than an attorney, who render estate agency services on behalf of that attorney;

Interns: Studying towards full-status.

Estate Agency Affairs Board

EAAB is a legal person (15 board members)

Appointed by the Minister of Trade & Industry

Objective: Maintain and promote E.A code of conduct o Regulate E.A activities in the public‟s interest o Manages the Fidelity Fund

Withdrawal of Fidelity Fund Certificate:

Principal fails to manage trust accounts

Books aren‟t audited within 4 months after financial year-end.

If E.A is guilty of conduct deserving a sanction

An Estate Agency markets & sells...

Residential (St, Ft)

Commercial (St, Ft, Share-Block)

Agriculture (Ft)

Leisure (Ft, St, Fractional)

Housing scheme (shares, life-rights, Ft, St)

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Stakeholders

Estate Agents

Multi-Listing Systems

Referral Networks

Valuers

Developers

Estate Agents

Legal & Ethical Obligations

• To observe the relationship of trust between the estate agent and the client; • To act in the client‟s best interests • To display reasonable diligence, care and skill in performing estate agency services; • To avoid any conflict of interest;

Disclose all competing mandates;

Respect all duties relating to offers and contracts;

Market a client‟s property professionally;

Disclose all material facts

Account for all funds received on behalf of a client (incl. Rental deposit)

Communicate continuously and timeously

Receive compensation and/or remuneration for services rendered.

Make secret profit(s) from the relationship;

Abuse or unlawfully disclose confidentialities

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Multi-listing System

A mandate given to a group of estate agents.

The Principal should know which agencies are included.

Commission is divided between the mandating and the selling agents on a pre-agreed basis

A MLS includes estate agents who: o agree to share details of buyers/sellers o conduct business using the same multi-listing system

Advantages: o The property gets maximum exposure o Seller only deals with the mandating agent o Market value is often deter mined by collective experience and data

Referral Networks

Between different franchises

Nationwide or international

Agencies outside agent‟s area

Valuers

Valuation: an estimate or opinion of value.

Valuer: specialises in valuing immovable property, and charges a fee for these services.

May not practice as a professional valuer unless registered in accordance with the requirements of the Property Valuers Profession Act, 47/2000

Developers

Locate land. Assess to decide best type of development (residential: flats/ houses, commercial: shops, offices, factories, hotel); or

Are aware of the precise nature of the building required and wish to obtain a suitable piece of land

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Global Quick View

Knight Frank Global House Price Index - Year-on-Year. Q1 2010 price growth

1 China 68.0%

4 Australia 20.0%

5 Israel 15.9%

6 South Africa 11.8%

11 United Kingdom 8.8%

15 New Zealand 6.8%

22 United States 2.3%

23 Germany 2.3%

34 Spain -4.7%

38 Dubai, UAE -8.2%

47 Estonia -40.3%

SAPTG - Kick with CONFIDENCE FREE upgrade for existing members:

• Upgrade to full provincial access • Upgrade to minimum of 3 users • Upgrade to all 6 modules

New members : • Sign-up within 5 days – 10% off (KYG2PE)

Emotional Intelligence

Why Important?

ACHIEVEMENT is the reward for: o emotional & o social competence

WHICH determine our level of Emotional Intelligence – EQ

EQ ... Is the Ability to identify

use

understand

manage your emotions effectively

Engaging with others so that they are drawn to you

Recognizing your own emotional state & that of others

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Improving Emotional Intelligence

1. Reduce and manage stress 2. Emotional self-awareness 3. The power of non-verbal communication 4. Use humor to deal with the challenges 5. Resolve conflicts positively with confidence

1).Under high stress levels, rational thinking and decision-making is reduced. Your ability to accurately “read” a situation, really listen, be aware of your own feelings, and communicate clearly all diminish. 2).We can distort, deny, or numb our feelings, but we cannot eliminate them. If you disconnect from your emotions – esp. core emotions such as anger, sadness, fear, and joy, you lose the ability to understand your own motivations and needs. You will not communicate effectively any more. 3).Non-verbal communication is driven emotionally . It “asks”: “Are you really listening?”

“Do you understand?” You answer in the way you look, move, and act. Non-verbal messages will produce trust, excitement, and desire for connection or …. fear, confusion, distrust, and suspicion. 4).Smooth over differences. Gentle humor helps us say things that might otherwise create conflict. Relaxes and energizes. Playful communication relieves fatigue which allows us to recharge and accomplish more. Makes you creative. Humor frees you of rigid ways of thinking. Creativity lets you see things in new ways. 5).Successfully, resolving conflict requires the previous four skills of EQ. By managing stress, staying emotionally aware, communicating nonverbally, and using humor, you will be equipped to defuse many issues before they escalate. Choose your arguments. Arguments consume time and energy. Consider what is worth arguing about and what is not. Focus on the issue, not the person

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Services Seta Compulsory Legislation

Effective 15 July 2008 - Supported by the EAAB

1. Full Training – 12 Months 2. RPL – 3-6 Months 3. Experience and expertise may be considered for exemption (Request) 4. The Qualifications must be maintained. Continuous Professional development 5. Have until Dec 2011 to obtain NQF 4 or NQF 5

Remember the following

NQF 4 = Matric Certificate

32 Unit Standards

30% - Theoretical (classroom)

70% - Practical assessment

NQF 5 = National Certificate

28 Unit Standards

30% - Theoretical (classroom)

70% - Practical assessment

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Build a POE

Learner builds their own Portfolio of Evidence

Work is assessed & moderated for credits

Learner must be found competent

No specific “pass-rate”

Certification

What does DITASA offer?

1. Accredited Learning Programmes Campuses Countrywide

2. Learning Methodology Practical approach (Learner involvement) Hosting Integration with Business

3. Recognition of Prior Learning (RPL) & Assessment

Other Services:

• Learnerships • Internship • Other sectors (not just Real Estate) • Variety of Programmes

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When do we offer these Qualifications?

Our NQF 5 funded programme started 26 July 2010

NQF 4 & RPL Our non-funded programme is running continuously…

REMEMBER: You have to complete your NQF 4 & 5 before December 2011!

The National Certificate Real Estate NQF5 is a Great Opportunity

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Rentals? Do not fear! Presented by Andre Holtshausen

Why do some shy away from rentals?

• Laws and Regulations

• Trust Accounts

• Administrative burden

• Deposits

• Little reward for lots of work

• Tenants, tenants, tenants

Laws and regulations that govern rentals include:

• Estate Agency Affairs Act

• Rental Housing Act

• Access To Information Act

• Debt Collectors Act

• Prevention Of Illegal Eviction Act

• Protection of Personal Information Act (“POPI”)

• Consumer Protection Act

• Public Access to Information Act (“PAIA”)

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Trust accounts and rentals

• Section 32 of Estate Agency Affairs Act

• Section 5 of Rental Housing Act

• Damage Deposits

• Monthly reconciliation and annual audit

• Reporting to EAAB

Administration includes

• Maintenance management

• Collecting rent and reconciling monies received

• Paying of landlords and other beneficiaries

• Keeping everyone informed

• Recordkeeping, spreadsheets, accounting packages, banks, etc.

Market Trends

Growing middle class in South Africa

+ Credit is not easy to come by

+ Developers are currently holding back for various reasons

+ International interest

= More difficult for upcoming professionals and middle class to enter property market

= General growth in rental market, both rental values and volume

Lots of effort, little reward?

• Not true!! Plan properly and get your admin right

? 50 Properties at R4000 at 8% comm = R16 000 p.m.

? 75 Properties at R6000 at 8% comm = R36 000 p.m.

? 100 Properties at R8000 at 8% comm = R64 000 p.m.

• Generally above inflation growth on income as rental values increase annually

• Current average 120 properties and just under R4500 monthly rent

• Reduce admin and grow 3 or 4 times

• Property management gives rental stock which gives sales stock

Summary

• Rentals should not be a burden

• Rentals can provide a handy monthly income to cover costs leaving sales to be your bonus

• Done correctly, it is a very viable business in its own right

• Rentals provide stock for sales

• Solutions are available to make your entry and growth in rentals as sweet as you like.

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Dykes van Heerden REVISITING LEGISLATION

Financial Intelligence Centre Act 38/2001 (FICA)

Regulation of Interception of Communications & Provision of Communication-Related Information Act 70/2002 (RICA)

And the Consumer Protection Act (CPA) implications are FINANCIAL INTELLIGENCE CENTRE ACT 38/2001

Accountable institutions: estate agents, attorneys, banks, insurance companies

Applies to all business relationships

The relationship begins with obtaining mandate

Client‟s identity must be verified at mandate stage FICA OBLIGATIONS

Appoint FICA compliance officer.

Retain all financial records for 5 years

Some reports are obligatory

Cash Threshold Reporting obligation intended for implementation on 4th Oct 2010 (R25,000)

Report monies moving in and out of RSA

Suspicious Transactions Sect 28 & 29: (STR,CTR or TPR)

(Cash Threshold Report & Terrorist Property Report)

Evasion/attempted evasion: Paying duty/tax

Money laundering / attempt thereof What is SUSPICIOUS... ?

Payment into trust followed by request to release due to not proceeding with sale;

Deposit by unidentified 3rd Party into trust;

Buying without inspecting;

Non- disclosure/manipulation of actual Purchase Price;

Backdating of CGT Valuations or overstating value;

Including movables at inflated value in Purchase Price;

Deposit in exchange for trust cheque;

Seller desires offshore deposit of funds;

Change of parties at last minute

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Where Do You Go To Report?

Financial Intelligence Centre: www.fic.gov.za

Fax (012)315 5828

14th Floor,240 Vermeulen Street, Pta PENALTY for non-compliance: Up to: 15 years Imprisonment or R10 Million fine And remember... TIPPING-OFF is also an Offence RICA – Not just for Cellphones! IMPA Interception & Monitoring Prohibition Act/92 has been repealed by RICA(2002)

RICA: “any person, other than a law enforcement officer, may intercept, if he is a party thereto, unless intended for committing an offence”

Even if the interceptor is not a party to the communication

Sect. 14 (Privacy) Constitution – reasonably justifiable in open and democratic society

Judge may direct interception: Discretion of judges & employers may intercept employees communication if necessary for business

THE CPA IS COMING! Seller beware… The Advertising Standards Committee, A Giant Retailer, The Price Guarantee and an Amazon:

• “If you buy a product from us and you find it cheaper at a competitor within 21 days, we will refund more than the difference. Find it elsewhere when you intend to buy from us and we will beat the price”

THE TEST: Will any ORDINARY, REASONABLE consumer understand the legal gobbledegook? Normal consumers would not read more into the conditions than exist: „elsewhere is elsewhere‟. (even on amazon.com)

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SA Homeloans

Three Key Elements of Credit Decisions

Credit Behavior

Income and affordability

Security provided A credit report is used to understand a consumer’s credit behavior.

Credit reports are vital in the credit decision process of home loans

Shows a consumers ability to repay debt

Helps the credit department assess the credit worthiness and ability to pay back a loan

Past behavior is a strong predictor of future behavior What is Displayed on a Credit Report ?

Current & previous address

Employment info

Emperica score

ID Number

Fraud rating

Contact details

Marriage info

Enquiry history o shows how often an individual applies for credit o shows records of existing judgments, defaults and admin orders

Payment Profile Displays a detailed description of payment records over a 24 month period & gives credit an indication of over indebtedness Emperica Score

• Predictive scoring model designed to predict a consumers future propensity to service debt.

• Evaluates the consumer credit profile (300‟s – 800‟s) • High score indicates a “good” credit risk or a low likelihood of future delinquency • Low score indicates a “poor” risk or high likelihood of future delinquency.

Adverse Information on a Credit Report Defaults Notations indicating that an individual has defaulted with non payment which remain on file for 1 or 2 years depending on the nature of the debt. Judgement Is the result of a legal action instituted by a credit grantor from failure to respond to a final notice. They remain on file for 5 years and may only be abandoned or rescinded by a court of law.

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Legal Notice When action is taken against you after failure to pay an account. It includes admin orders, provisional sequestrations, sequestrations, rehabilitation orders . Remains on record for 5 – 10 years depending on the nature of the legal notice report. Admin Order Administrators make regular payments on the consumer‟s behalf. Remains on the report for 10 years or until rescinded Retention Periods for Adverse Information

Debt Rescheduling - until clearance certificate issued

Sequestration - 10 yrs or unless rescinded

Liquidations - indefinite

Rehabilitation Order - 5 yrs

Trace Alerts - 1 yr (renewable) Credit Standing of Consumers March 2010

Consumers With Impaired Records

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Consumers Credit Demand Slowing as Credit Performance Stabilizes As at the end of March 2010, credit bureaus had records for 18.21 million credit-active consumers of which 54.0% (9.84m) were classified as in good standing year-on-year. Impaired records continued to increase reaching 8.37 million this quarter. This indicated a deterioration in the credit records of 191 000 consumers quarter-on-quarter and 915 000 year-on-year.

Thank You. Relevant websites: www.saptg.co.za www.dykesvanheerden.co.za www.ditasa.co.za www.payprop.com www.sahomeloans.co.za www.ieasa.co.za For further enquiries and notification of future seminars please contact: Claudette Keal Seminars Co-ordinator Tel: 083 259 8890 seminars@kf.co.za