CONTENT
MESSAGE FROM THE CEO
SEMI-GRATION PROPERTY BUYING
EAAB & SSETA AGREEMENT
SOUTH AFRICAN CONSUMER CONFIDENCE
AVOID DISPUTES WHEN SIGNING OFFER TO PURCHASE
SARB INTEREST RATE DECISION
BUY-TO-LET ESTATE AGENT SURVEY
EAAB PUBLIC NOTICE
FOREIGN PROPERTY INVESTMENT - POST WORLD CUP
SOLE MANDATES
NEDBANK PROPERTY PROFESSIONAL AWARDS
THE PROFESSIONAL DESIGNATION EXAMINATION
FOR ESTATE AGENTS
PropWorx RENTAL AGREEMENT SOFTWARE
SAFRE CELEBRATES THEIR 10TH ANNIVERSARY
PUBLISHER
Estate Agency Affairs Board (EAAB)
PROJECT MANAGER
Margie Campbell
EAAB Marketing Communications
Estate Agency Affairs Board
Dunkeld Crescent
Cnr Jan Smuts Avenue & Albury Road
Hyde Park
DESIGN & PRINT
Bhubezi Printers
Cover photograph supplied by:
African Pride Mount Grace Country House & Spa.
Tel: 011 731 5600
Fax: 086 540 9487
Email: [email protected]
www.eaab.org.za
Message from
THE CEO
A
s we rapidly approach the year-end one would certainly
future wellbeing of the property sector in general and the
crease in the number of registered estate agents that was
experienced by the Estate Agency Affairs Board during the
height of the recession in 2008 and 2009, which is, I believe, a bellwether of the health and stability of the sector,
has begun to level out with a slow, but steady, increase in
the number of registered estate agents during the current
year. While the increasing signs of recovery in the sector
success of estate agents a number of incipient economic
factors could yet inhibit the much hoped for revival. One is
mindful, for instance, of the lower than expected real Gross
Domestic Product during the second quarter of this year,
the tight employment conditions that continue to endure
lower second quarter real income and consumption growth.
The ratio of debt to disposable income, in addition, still remains disturbingly high, at 78%, with the result that con
The good news, though, is that this rather dismal economic
scenario has been countered to an appreciable extent by
the fact that the Monetary Policy Committee of the SA Re-
forecast, and having regard to the current
strength of the rand, it seems increasingly
likely that yet a further cut in the repo
rate is on the cards.
serve Bank again expressed itself to be amenable to reducing the repo rate, a key monetary policy interest rate, by
50 basis points to its present 6% on 9 September 2010.
The result of this astute move is that interest rates have now
been sequentially cut by a cumulative 600 basis points
since December 2008. Mortgage rates are, consequently,
at their lowest levels since mid-1974 while the prime rate
is at a thirty year low. The cost of servicing household debt,
while the lagged affect of the generally lower interest rates
The further 50 basis point cut is likely to provide additional
support to the housing market and accelerate the demand
regard to the current strength of the rand, it seems increas-
AGENT | 02
ingly likely that yet a further cut in the repo rate is on the
cards. The timing of this cut will, naturally, depend on the
! economic data that will shortly be released.
In a different vein, I have just experienced the very real
pleasure of meeting and interacting with many practicing
estate agents and other stakeholders during the current se"
#$ognition functions hosted by the Board countrywide and
that will continue until the end of November 2010. The
overwhelmingly constructive, positive and appreciative response to the Board’s presence was, indeed, an eye-opener
and it was certainly a great pleasure for me to have had
the opportunity to publicly acknowledge the contribution
of those stalwarts of the estate agency profession who had
'*
July 2003 to 15 July 2008, the date when the new educa
and who, furthermore, had not had infractions of any nature
recorded against them. They have been recognised by the
Board as professional estate agents and, in due course, will
+/ ;
/ nised designation.
The Board has resolved to increase its direct interactive
interventions with all stakeholders in the property sector
while still striving to strike a balance, in these endeavours,
with the obligations that are necessarily owed to consum <
= holding of consumer awareness workshops throughout the
country and, also, taking steps to cement and enhance the
harmonious working relationship that the Board has already
established with the various provincial consumer directorates and the SA Consumer Council. I have no doubt that
agents and consumers alike particularly if it be accepted
that consumers who are knowledgeable and aware will be
far better placed to both understand and appreciate the variety of the professional services that estate agents are able
to offer to them. I do hope that this increased involvement
by the Board will also exert the much needed positive impact on the transformation of the estate agency sector better
+/<
that as consumers become increasingly empowered and
enabled to play a more active role in the property environment they will, in due course, express an interest in estate
agency and seek to claim their position as leading actors in
this sphere.
I am happy to report that the Board itself, during its strategic planning processes, has fully recognised and embraced,
the exponential levels of change that were experienced by
the estate agency profession. Estate agents may rest assured
that all new initiatives to be implemented by the Board that
might directly impact upon the day-to-day activities of estate agency professionals will be circumspectly undertaken
and that the Board will continue fully to comply with all
legislative requirements including, of course, the precepts
Mrs Nomonde Mapetla
"?!Q
of both the Estate Agency Affairs Act and the Public Finance
Management Act.
The Board does appreciate that the estate agency profession
needs time to acclimatise itself to, and accommodate, such
recent innovations as the introduction of the new educational dispensation and the staggering of the renewal pro
>
to continue its proactive efforts positively to advance the already excellent relationships that it enjoys with estate agency professionals, consumers and stakeholders. The Board,
by so doing, will continue to ensure the development and
maintenance of the knowledge, integrity, competencies and
professionalism that has become a predominant character
the professional status that has already been accorded to
practicing estate agents and will be accorded to all estate
agents in due course.
AGENT | 03
SEMI-GRATION
PROPERTY BUYING
It is imperative that if you are in the market for buying a home that you have
and have a clear understanding of all the costs involved.
S
emi-gration has been a word “bandied about” in recent
times to refer to people re-locating to a different part of the
country, as opposed to emigration, which refers to those
people leaving the country with the intention not to return.
While the phrase may be relatively new, the process of
“Semi-gration” is a very old one, and has been taking place
for thousands of years.
From 1886, the country’s major semi-gration destination
became Johannesburg and its surroundings, which mushroomed initially due to the Gold Rush, and later due to
a rapidly growing diversifying Gauteng (formerly known
as the Pretoria-Witwatersrand-Vereeniging economic region) regional economy that became the economic hub of
Southern Africa.
Some people focusing on semi-gration in recent years
have linked it to households moving away from congested
or crime ridden cities towards a better lifestyle, and indeed
there are some that do. But economic opportunity, i.e. jobs
or business opportunities remain the number one driver
of semi-gration, and of course if one can move for a combination of better job opportunities as well as a better lifestyle
Z
In turn, semi-grants help to drive economic growth and
opportunity in a region, especially the skilled ones, so
regions that have a “net inward migration of skills are probably not only those that offer “superior” economic opportunities, but they also have a good chance of having their
economic growth boosted by these arrivals.
AGENT | 04
It was estimated that approximately 7% of all sellers are
selling in order to re-locate to another part of South Africa.
With regard to the drivers of relocation within South
Africa, relocating for work related transfers, or in search of
better job and business opportunities, are seen as the
primary driver, according to the sample of agents.
Secondary drivers are:
The recent Estate Agent Survey conducted by FNB established some answers on why people sell properties.
[
[
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>
are perceived as safer.
AGENT | 05
This puts a different slant on things, compared to the perceptions of some people that a high portion of semi-gration
]^_`
people don’t have the luxury of being able to move away
from the main centres of economic opportunity.
But a place that has the combination of huge economic
opportunity as well as a great lifestyle would probably be
winning the race to attract “semi-grants”, and indeed this
may well be the case.
Where should the country’s key
semi-gration magnets be?
Where are the major semi-gration magnets, i.e. the places
of economic opportunity?
Well, in terms of sheer size, Gauteng remains the main economic hub by far, having mushroomed following the discovery of gold in 1886. In most of our lifetimes, therefore,
it has been the main place of economic opportunity, and
this should be the main semi-gration destination in terms of
sheer numbers.
But economic growth, not just sheer size, must also be seen
as a key potential magnet of semi-gration, because growth
provides new and untapped opportunities.
While the 3rd largest provincial economy, the Western
Cape, which includes the 2nd largest major metro economy
(City of Cape Town), is dwarfed in size by Gauteng, it is
the leader in terms of economic growth in modern times, it
would seem.
Examining the average annual real economic growth estimates by province, according to Globalinsight data, it is
the Western Cape economy that appears to come out tops,
with an average annual growth rate of 4.2% during the past
decade, just pipping the Gauteng growth rate of 4.1%. SA’s
2nd largest provincial economy, KZN, which has the country’s 3rd largest major metro economy (eThekwini), was in
3rd place, growth-wise, with an average growth of 3.8%,
followed by the Eastern Cape on 3.3%.
}cial economies would probably do badly in retaining their
skills base, as well as in attracting skills, and should thus
fare poorly as semi-gration destinations, having neither the
economic size nor the economic growth rates.
The obvious big semi-gration magnets should therefore
be Gauteng, which has economic size as well as strong
growth, and the Cape Metro-driven Western Cape, 3rd in
economic size, 1st in economic growth, and arguably higher on the log than Gauteng in terms of perceived lifestyle
for many.
KZN has a great lifestyle, including great weather all year
}
Midlands, and so on, but lags the Western Cape slightly on
economic size as well as being slower than the Western
AGENT | 06
Cape and Gauteng on economic growth. KZN also has the
added “disadvantage” of being more heavy industry-driven,
which has harmed its natural environment over the years
more than in the case of the more services-driven Western
Cape economy.
Provinces’ share of national economy
Limpopo
7.2%
Mpumalanga
7.5%
A way of estimating semi-gration rates
~Q
mine where repeat buyers of property buy property, compared with where their recorded sales have taken place.
The approach taken is to estimate the number of repeat buyers, i.e. all of those buyers who also have a sale recorded
~ Q
the recorded sale of a property takes place represents the
province “from” which they are believed to have moved,
while the province of the recorded purchase is the province
to which the re-location takes place. The survey included
“repeat” transaction where the sale only take place after the
purchase, based on the assumption that many will only sell
some time after re-location.
Data revealed that in terms of sheer numbers, Gauteng attracts by far the most estimated “semi-grant” repeat buyers,
i.e. 38,566 over the 10 year period 2000-2009, with the
Western Cape far behind in 2nd place with 23,408 inward
“semi-grant” buyers, and KZN 3rd with 15,474.
Western Cape
14.3%
Eastern Cape
7.5%
Northern Cape
2.3%
Gauteng
33.2%
North-West
6.5%
Free Stat
5.2%
KwaZulu-Nata
16.3%
It is the smaller provinces, especially the inland ones such
as Limpopo, Mpumalanga, Northern Cape and North West
which have huge percentages of outbound buyers.
How does the Western Cape have such good retention?
Great lifestyle’s in great environments are arguably found
in far smaller centres than the country’s major metros, while
Gauteng must still be seen to possess the best economic
opportunities in general. It is arguably the combination of
economic opportunity, having the 2nd largest major metropolitan (City of Cape Town) economy after Gauteng, combined with probably as a good a lifestyle as a major metro
can provide, given the usual issues of congestion, pollution
and crime, that gives the Western Cape province the edge.
Obviously, the number that a province attracts is only half
of the story, with the other half being how many sellers it
loses to other regions. Here again, it is Gauteng, due to its
sheer size that can be expected to see the largest absolute
€* ‚ 2009, the Western Cape 2nd with 17,254 and KZN 3rd with
15,950. Of the 3 major provinces, both Gauteng (-4,479)
ƒ„…†‡ˆ‰ers over the decade, while the Western Cape recorded a
surplus of +6,154 repeat buyers.
So, the net result appears to be that the Western Cape residents that do move away do so largely for better economic
opportunity but not for much else. This can be based on
the estimate that the overwhelming majority of the Western
Cape’s outbound repeat buyers appear to head for Gauteng,
i.e 5.9% of total repeat buyers in the province over the past
decade. Some may be surprised to hear that this appears to
make Gauteng a more favoured semi-gration destination
for Western Cape residents than what the Western Cape is
for Gauteng people, relative to the size of each province’s
market, of course.
‘Some may be surprised to hear that
this appears to make Gauteng a more
favoured semi-gration destination for
Western Cape residents than what the
Western Cape is for Gauteng people’
The Gauteng outbound distribution was more evenly spread
other major coastal region, KZN (3%), and even such small
regions as North West (1.6%) and Mpumalanga (1.5%),
the Western Cape province’s outbound buyers are far more
single-mindedly focused on Gauteng, with the 2nd most
important Western Cape destination believed to be Eastern
Cape with only 1.6% of its total repeat buyers headed there,
and even less to KZN (see graph above).
How does the Western Cape achieve the best estimated
‹ } about being the most popular semi-gration destination for
outsiders. It is also about a better retention of residents.
The Western Cape has the lowest percentage of estimated
“outbound” repeat buyers as a percentage of its total estimated repeat buyers, i.e. 10.6%. Gauteng has the 2nd-least
amount of outbound buyers as a percentage of its total repeat buyers, i.e. 13.5%, although that province’s sheer size
means that it has the largest absolute amount.
This suggests that Western Cape semi-grants move largely
for economic opportunity, and have limited interest in other
“good lifestyle” provinces. So add good lifestyle to a strong
economy and you have a winning recipe, which seems to
be what gives the Western Cape a competitive advantage
not only in attracting semi-grants but, importantly in retaining them as well.
Sources: FNB Home Loans
Globalinsight
AGENT | 07
The Estate Agency Affairs Board (EAAB)
and the Services SETA (SSETA) agrees
on a positive way forward
Mrs. Nomonde Mapetla (CEO - Estate Agency Affairs
Board) and Mr. Ivor Blumenthal (CEO - SSETA)
T ++?/ ?//> that, through the exercise of considerable cooperation and
goodwill on both sides, they have been able to overcome
the vicissitudes of the past and to establish a mutually
harmonious and cooperative working relationship in the
best interests of all affected stakeholders and the two
Executive Authorities to whom they report.
Mrs. Nomonde Mapetla, CEO of the EAAB said “we have
taken a giant leap forward in the education and professionalisation of estate agents with the signing of the Memorandum of Understanding between the EAAB and the Services
SETA. It is our view that, since all past misunderstandings
has been fully and amicably resolved, the two entities can
] agency profession.”
“The Services SETA is extremely proud of the progress
that has been made in its evolving relationship with the
EAAB. The Services SETA remains especially committed to
maintaining a high level of quality control over accredited
< through the mechanism of the Forum that has been created,
the partnership between the SSETA and the EAAB will go
from strength to strength” said Mr. Ivor Blumenthal, CEO of
the SSETA.
The EAAB and the SSETA, both
statutory bodies, have agreed as
follows:
The EAAB and the Services SETA jointly intend establish?/;
"
Œ
(“the Forum”) that will not only constitute the Professional
Body for the estate agency sector but also be instrumental
in the education, training and professional development
of estate agency practitioners. The proposed functions of
Œ

[ Œ …
;
Œ]†^…;Œ_‰=
\+/;/‘
AGENT | 08
[ ’++?/?;/=
itation of all training providers offering the NQF
=
‘
[ ’++?/?;/$
of Prior Learning (“RPL”) instruments submitted to the
++?/‘
[ ” = education providers, through the SSETA QALA Division,
‘
[ " / Πsubject matter experts are made available to serve on that
Œ‘
[ •"?!#†^"?#_‰
activities and Organising Framework for Occupations
†^QŒQ_‰‘
[ • ‘
[ •
‘
[ •=
‘
[ • ! Continuing Professional Development (“CPD”) activities
estate agency through the implementation of an appro
‘
[ • ] functions pertaining to the educational activities for the
\
upon between the parties.
The Forum also intends concluding such further Memorandums of Agreement with any other established Professional
Bodies as may be relevant to its sphere of operations such
as, for instance, the Property Development and Management sector, the Legal sector and the Valuation and Auctioneering professions, insofar as these may be felt to be
necessary or desirable in the interests of the property sector
in general and the estate agency profession in particular.
The Terms of Reference and composition of the Forum have
yet to be determined by the EAAB and the SSETA although
it has been agreed that the Real Estate Chamber Board of
the SSETA and the members of the Education and Training
Committee of the EAAB will be absorbed into the Forum
acting as one structure. Both bodies welcome this unique
innovation which bodes well for their future cooperation
and joint interactions where the education and skills development of estate agency practitioners is concerned.
The formation of an Estate Agency
Principals Association (“the EAPA”)
The Forum will endeavour to establish an Estate Agency
Principals Association in each province and, also, nationally with the aim being that such body will collectively
represent duly registered principal estate agents on such
structures as the Forum itself or where social partner representation is required. The intention behind this action is
to ensure that the EAPA always acts in the best interests of
organised employers within the estate agency sector as a
member of the Business Coalition of South Africa (“BCSA”).
NQF Level 4 and 5 Estate Agency
qualifications and Professional
Designation Examination subsidies
All estate agency practitioners registered as such on 15 April
2008 have been granted until 31 December 2011within
…;Œ 
\ * =
respectively. The Forum remains keen on discouraging any
form of entitlement to, or dependency on, external funding,
whether from the SSETA or any other governmental agen
=
ally administer all bursaries that are made available to the
++?/
=
‘‘
The SSETA has indicated that a
further bursary allocation of R20 million
will be released to the estate agency
sector from 1 August 2010.
’’
The SSETA has indicated that a further bursary allocation
of R20 million will be released to the estate agency sector
from 1 August 2010. It has been agreed that any individual
associated with a SSETA levy-paying member company will
$*  \ment costs incurred when such member has been duly cer
…;Œ–*
=
++?/=
refund the individual estate agency practitioner concerned
=
SSETA-accredited training provider who has duly registered
the person concerned as a learner with the Forum.
The SSETA has, in addition, agreed to release a further allocation of R10 million to enable those estate agency practitioners who, having completed either the NQF Level 4 or
*=
]#
Designation Examination (“the PDE”) as provided for in the
Education Regulations. Once the candidate has duly registered for, written and passed the PDE that candidate may
qualify for a refund of R1 000 from the SSETA to offset the
costs necessarily incurred in purchasing the required study
material from the EAAB and paying the examination entry
fee which is estimated to be approximately R1 500. The candidate, to qualify for the refund, must have registered with
a SSETA accredited training provider recognised by the Forum as a PDE Tuition Centre. Each such PDE Tuition Centre
will register the candidate as a PDE Learner with the Forum.
The two bodies, indeed, look forward to working closely
and supportively together in the future and to using the
Forum as an ideal mechanism to advance the interests of
the estate agency sector and its professionalisation.
AGENT | 09
SOUTH AFRICAN CONSUMER
CONFIDENCE NEAR BEST SINCE
2007 AS RECESSION ENDS
S
the third quarter, close to the highest since the last three
months of 2007, as Africa’s biggest economy pulls itself out
of recession.
for Economic Research’s websites, the consumer con ! "# "$ %' months this quarter.
%*+!penditure in the economy, has been slow to recover from
last year’s recession as companies such as Seardel Invest%*/
!
+er, cut jobs. The Reserve Bank reduced its benchmark interest rate by half a percentage point to 6 percent on Sept. 9,
the eighth reduction since December 2008, to help spur
spending.
/ Bruggemans consumer spending is likely to continue growing strongly in the near-term future thanks to rising incomes,
'
'
% % 1
provided.
31
45;%<
*
%*
5=#5
+ * ">*>>> * %' good time to buy durable goods, such as TVs and furniture.
?
!%''
consumer spending.
A boost in spending may help to spur economic growth,
@45=%
F$5K%%'5
?'!%!%=5Q%
=>">5
Source: Bloomberg
AGENT | 11
AVOID DISPUTES
WHEN SIGNING AN OFFER
TO PURCHASE
It is imperative that if you are in the market for buying a home that you have
and have a clear understanding of all the costs involved.
Court
cases are escalating between property developers and buyers to resolve Offer to Purchase disputes. It is
preferable that you obtain a pre-approval from the bank of
what you can afford, and that you are aware of transfer
costs, municipal connections, etc before committing to
signing an Offer to Purchase.
It is also essential to ensure, as far as possible, that your
that the fact that your circumstances changed after you
signed an Offer to Purchase in good faith, it will regrettably
not stand up in court as a legal reason to renege on the
initial agreement.
Banks are still remaining very selective on the criteria for
granting a mortgage loan and although there have been
signs of improvement in the market, buyers need to be
aware that in most instances you will be expected to put
down a substantial deposit. The days of being granted a
100% mortgage loan that we experienced in the ‘property
boom” are no longer.
Don’t be pressurized into signed an Offer to Purchase and
ensure that you have the property or development checked
out beforehand. You could consider adding a clause bin-
—
you need to be mindful that too many conditions could
hamper the result in your offer being declined. Both sellers
and buyers need to bear in mind that an Offer to
Purchase is a legally binding contract and therefore
neither party can amend terms and conditions as they so
wish.
Making an Offer to Purchase
The Offer to Purchase is not only an important milestone in
any property transaction, but also constitutes an important
document, one that should not be taken lightly at all. An
Offer to Purchase, once signed, constitutes a Deed of Sale
as it forms the foundation of all the legalities going forward, and could mean the difference between a smooth
transaction and an unwanted lawsuit.
Basic Checklist
[Œ ] Q #‘
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† ‰ ‘
AGENT | 12
[# ‘
[+
]
‘
[<‘
["!
offer.
Electrical Compliance Certificates
/?""
=
=
provided, such as engineering reports and reports on pests.
Cooling-off period
“The days of being granted a 100%
mortgage loan that we experienced
in the ‘property boom’ are no longer”
Dates
Over and above the date of the offer, there are two more
dates that you should check.
[ ! pressure on the seller to make a decision. If the seller does
not accept an offer by the expiry date, the offer becomes
‘
[
wishes to occupy the premises and could be earlier than
the date of transfer.
Occupational Rent
If the buyer wishes to occupy the property prior to transfer, the seller is entitled to charge the buyer occupational
rent. The amount should be clearly detailed. Also check
that the clause includes a provision that, should the trans
rent payment falls due, that the amount due will be prorated.
Deposits
Should the buyer pay a deposit as a sign of good faith, the
Offer to Purchase needs to state that amount and that the
deposit will be held in an interest bearing trust account until
transfer. It also needs to state that the buyer will be entitled
released.
Fixtures and Fittings
/
!
property as a whole, there may be some items, such as curtains
or mirrors, that the seller and the buyer agreed would be
included in the purchase price. If this is the case, you should
list these separately.
Although a cooling-off period is generally enforced on
properties with a value of R 250,000 or less, it can be legally included in property of a value greater than that. The
premise is that should both parties agree to the inclusion
of such a clause, it will be legally enforceable. Check the
duration of the cooling-off period. It should be no longer
Suspensive conditions
Suspensive conditions are the conditions on which an Offer
to Purchase is based. These could include:
[/‘
[}!‘
[/
others. The Offer to Purchase needs to state who will foot
‘
[?
to it. Be sure to check that too.
The “Cooling off Period”
A 72 hour clause is often included in an Offer to Purchase
to allow the seller to continue marketing the property after
an Offer to Purchase, which is subject to suspensive conditions, has been accepted. Should the seller want to accept
an alternative offer from another buyer, he or she will notify
the existing buyer in writing, after which the buyer will have
‡‚
Offer to Purchase. Carefully check the wording to ensure
that the clause is equitable.
/Q#
†*‰
cooling off period in which to withdraw and cancel the
Offer to Purchase should you wish to do so. This only applies to properties with a purchase value of less than R250
000. Ensure however that it is stipulated in the contract to
avoid any misunderstanding or reason for dispute at a later
stage.
†*‰!]
The notice of cancellation must be done in writing to the
\
‚
Defects, faults and renovations
Property is normally sold ‘voetstoots’. The term means that
you buy the property warts and all. If there are defects, faults
and renovations that the seller agreed to repair or complete
as a condition of sale, these should be listed comprehensively.
Once the cooling off period has lapsed the Offer to Purchase will be a legally binding contract.
www.homeloans-southafrica.co.za
AGENT | 13
SARB INTEREST
RATE DECISION
From a residential property point of view, it’s
not necessarily wrong for the SARB to be slow
O
n the 9th September the South African Reserve Bank
(SARB) came out with a widely expected decision to cut
interest rates by half a percentage point, taking the repo rate
to 6%, and prime rate from 10% to 9.5%. This takes prime
rate into single-digits for the 1st time in a few decades.
For the highly credit-driven property industry, an interest rate
cut is almost always well-received, although some industry
players have felt that the rate cutting has come too slowly,
or that the SARB should have cut by a full percentage point
today if it were to make any noticeable difference to the
performance of the property market.
Such views may hold true if one is merely thinking about
short term property performance, but from a longer term
sustainability and stability point of view, we believe that the
current slow-moving approach to interest rate cutting has a
lot of merit.
”+/$>
€™ˆ™
€‡™]]
and local economy, today’s interest rate cut can be seen as
We are of the opinion that the current slow pace of interest rate cutting by the SARB should achieve this. Household credit growth has been accelerating mildly in recent
months, to reach 4.6% year-on-year by July after bottoming out at 2.6% growth in November 2009. In addition,
we anticipate household credit growth to begin to slow
in the near term as new mortgage lending (a key driver of
overall household sector credit growth) starts an expected
decline in the 2nd half of 2010, in a slower economic growth
environment.
It is therefore plausible to expect household sector credit
growth to remain at muted levels, and for nominal household disposable income to grow at a faster rate than credit growth, and in so doing bring about a lower and more
comfortable household debt-to-disposable income ratio.
While it is instinctive for property industry players to hope
for interest rate cutting, and the fact that the SARB didn’t
cut by more may thus come as a disappointment, we see
the cautious SARB approach as something of a blessing
in disguise, as it will probably be conservative enough to
encourage further much-needed improvement (decline) in
the level of household sector indebtedness.
However, there are other macroeconomic balances and imbalances that the Bank also has to be mindful of, because if
these get out of control they can create price as well as economic instability in the longer run. To us, one such key variable is the level of household indebtedness, which still recorded a high level of 78.4%. The ratio is down from around
83% as at the beginning of 2008, but it is still too high for
comfort in the case of another interest rate hiking cycle.
< that has some form of bank deposit, and in our country’s
dismal savings environment, it would perhaps be a mistake to aggressively make this savings vehicle still less
attractive.
From a household indebtedness point of view, therefore, a
“middle of the road” interest rate policy is arguably the desirable one, and by this we mean where interest rate cuts
sure, but at the same time an approach that still restricts
borrowing growth to a rate where the household debt-todisposable income ratio declines over the next few years to
a healthier level.
In a highly credit-driven market such as that of residential
property, every interest rate cut of any magnitude must have
some effect. However, we are of the view that the short-term
positive impact will be too small to change the weakening
trend in the property market. This is because the negative
] more powerful. These are twofold, i.e. a slowing economy
as well as the wearing off of the huge interest rate stimulus
emanating from 5 percentage points worth of rate cuts in
Implications for the residential
property market
AGENT | 14
‘‘
we expect the ‘mini-cycle’
slowdown in the residential market
to continue, with year-on-year house
steadily towards year-end
’’
the period December 2008 to August 2009. The wearing
off of such a major stimulus can hardly be offset by today’s
small interest rate reduction.
Therefore, we expect the “mini-cycle” slowdown in the
residential market to continue, with year-on-year house
† ‡‚™ /‰ steadily towards year-end.
Implications for the home buyer/
owner
The interest rate decision sends out a signal that the SARB
rates are now in single-digits, and the housing market has
returned to a weakening trend. This would seem to set the
scene for a relatively good buying period.
Potential buyers should, however, be aware that this does
not mean that there are no housing-related cost increases.
Municipal rates and utility tariffs are set to be a key source
of housing-related cost increase in the next few years, as
]
structure.
Eskom is presently the biggest driver of home-related cost
increases. In addition, applicable especially to Gauteng,
looming large is a major increase in transport costs for many
people, as many of the province’s freeways are set to become toll roads.
It is thus important not to be lulled into a “false sense of
security” due to very low interest rates. What the SARB is
currently giving, other authorities are taking back.
One would therefore be well-advised to buy a home well
within one’s means, making provision for the big housingrelated cost increases, and rising transport costs mean special consideration for location relative to one’s commuting
destination.
AGENT | 15
THE BUY-TO-LET
ESTATE AGENT
SURVEY
Estate Agent survey points towards buy-to-let
buying remaining in the doldrums in the 3rd quarter
X'4F
=>">* ++
!% % total property buying remained unchanged from the
previous quarter, at its record low point of 7%. Along with
' * term prospects for this segment of the property market
deteriorated further in the quarter.
Given the ongoing pressure on the household sector’s
on residential property, it comes as little surprise that the
latest Estate Agent Survey for the 3rd quarter once again
points to a very weak level of buy-to-let home buying.
Expressed as a percentage of total home buying, the panel
of agents estimated buy-to-let buying to make up a meagre
7%, which is unchanged from the previous quarter’s historic
low point.
This is in line with ongoing weakness in other non-essential
forms of demand such as holiday property buying as well
as the buying of property to be used as a primary residence
for relatives.
The level of buy-to-let buying remains a far cry from the 25%
level estimated back at the height of the property boom, at
a time when much of the buy-to-let buying was probably
more speculative by nature, with many buyers looking for
rapid capital growth and very short term gains.
Estimated average gross yield
on residential property
9%
8.4%
7.9%
8%
7.4%
7.8%
”]ly that last week’s further interest rate reduction will cause
the house price-related measure of real prime rate to turn
negative.
Investors searching for an income
stream also appear to be finding
only limited joy at present, with
yields still mediocre
In previous quarters’ surveys, we saw some improvement in
gross income yields on residential property, as estimated by
our estate agent survey respondents. Unfortunately, though,
the combination of a seemingly mediocre rental market and
still-accelerating house price growth until recently, may
have temporarily halted the move to more attractive yields
on property.
After a 2 quarter rise in gross yields, from a 5.6% low in the
=‚š‡š™‚=‚'
the survey recorded an almost unchanged 7.8% in the
current quarter.
While the difference between the 2nd quarter and 3rd
=
]
of a mediocre rental market which is battling to overtake an
7.4%
While rental data is hard to come by, we do know that
$}
in 2009, but that it still remained anaemic during the 1st
quarter of 2010.
7%
6%
The SARB, therefore, is effectively ensuring that there is little
place in the market for investors looking to use credit to
]
growth exceeding interest payments.
5.6%
5%
By the 4th quarter of last year, all of the major cities’ un
to reach single-digit positive growth territory, after spending
the previous 4 quarters in negative growth territory.
4%
Q2-2009
Q4-2009
Q2-2010
Although interest rates are currently at multi-decade lows,
they don’t necessarily encourage a wave of buy-to-let buying, or at least that component of buy-to-let buying more
focused on capital growth as opposed to an income stream.
>] ‚\* tors, as measured by the difference between prime rate and
!
rate of around -25%, which is hugely attractive for a speculator using credit. As at August 2010, this real prime rate
measure once again turned positive to the tune of +2.8%,
after a very brief recent return to mildly negative territory.
This return to a positive real rate is due to a steadily declin
year’s interest rate stimulus for property demand starts to
wear thin.
In the 1st quarter of 2010 (the most recent data available),
"
+7.4% year-on-year growth, for Durban the rate was slightly
negative to the tune of -0.4%, and for Johannesburg a mildly positive +2.8%, with none-of these growth rates being an
improvement on the previous quarter.
" ++/ ]
of actual rentals, and is thus the combination of market
rentals and escalations.
>•‚'
*™
>
AGENT | 17
TPN Tenant Profile - Percentage of tenants in
good standing regarding their rental payments
90%
85%
82%
84%
84%
85%
82%
80%
80%
75%
77%
74%
80%
78%
75%
71%
From a low point of 71% as at the beginning of 2009, an
overhang from the high interest rate period of 2008, TPN
data shows a gradual rise to 82% of tenants being in good
standing by the 2nd quarter of 2010, a response to lower
interest rates and a more stable economy following the
recession.
70%
65%
For 4 consecutive quarters, we have seen a steady decline
>"
<€=
2009 revised high of 0.149 down to a 3rd quarter 2010
level of 0.014.
60%
55%
50%
Q3-2007 Q1-2008 Q3-2008 Q1-2009 Q3-2009 Q1-2009
Percentage of tenants who paid rent on time Source: TPN
8% at the beginning of 2009, good for interest rate cuts, but
hardly a performance to bring the buy-to-let investors in
their droves yet.
The 3rd quarter shows no improvement in buy-to-let buying
as a percentage of total buying (7%), from its lowest levels
since the survey commenced back in 2004.
This result comes as little surprise, given that the household
]
most recent rental market data continues to point to an
anaemic rental market, and that estate agents continue to
point to low yields on residential property on average.
One improvement from a landlord
point of view has been a gradual
improvement in tenant payment
records, according to TPN
While the rental market is not yet setting the world alight,
a low interest rate environment appears to have eased
#… good standing regarding their rental payments.
We believe that estate agents have been disappointed, after
market prospects through 2008 to mid-2009. As a result,
they have steadily adjusted their expectations downward
over the past 4 quarters, to levels more in line with a weak
actual reality.
AGENT | 18
ESTATE AGENCY AFFAIRS BOARD
OF SOUTH AFRICA
IMPORTANT NOTIFICATION
In terms of section 32(3)(b) of the Estate Agency Affairs
Act, 1976 (Act 112 of 1976), estate agents are required to
keep accounting records of the trust monies deposited into
the trust accounts as well as the monies invested in any
savings or other interest bearing accounts in terms of the
said Act.
It further requires that the estate agent shall cause such re
ditors report should be submitted to the Board within the
above-mentioned period.
submitted their auditor’s reports within the period as stated
above are liable for R500 penalty.
rendered invalid and will have to be returned to the
?//>‘
[ in respect of the rendering of an estate agency service
ŒŒ"
issued.
Payment can be made to the following bank account,
quoting the correct reference number:
Account Name: The Estate Agency Affairs Board
Bank Name: ABSA
Account No.: 1790170535
Branch Code: 632005
Proof of payment can be forwarded to:
May we respectfully point out that:
[ ŒŒ"
=‘
[ ΠΠ"
?
›Z
Fax: 086 273 5794
Should you have any further enquiries please contact
Ms Nkhensani Makondo at 011 731 5600.
AGENT | 19
FOREIGN PROPERTY
INVESTMENT
POST WORLD CUP
During the Soccer World Cup South Africa did an exceptional job of showcasing the diversity and beauty it has to
offer. Leading on from this epic event, the promise of foreign
investment into the country is much anticipated.
+#”"$?\`/œ+/
“While it was not expected that many properties would be
sold to foreign investors during the World Cup period, there
may well be an increased interest in property investments
here, now that the wider international community has been
!
experience of South Africa.”
While there are no restrictions on property ownership by
non-residents, except a prohibition on illegal aliens owning
immovable property within South Africa, Gilmour says that
one has to bear in mind that there are technicalities in the
deal-making process that may be second nature to us, but
that foreign investors may not be aware of.
Luckily, he says, South Africa is reputed to have one of the
best deeds registration systems worldwide with an exceptional degree of accuracy and guaranteed tenure. Gilmour
explains that South Africa follows a system of land registra
and ownership is recorded in one of the regionally located
Deeds Registries. “Property,” he says, “can be owned individually, jointly or by an entity such as a company, close
corporation or trust, or a similar entity registered outside
South Africa. The choice is dependent on decisions in relation to tax transfer duty issues, or relating to the protection
of assets.”
‘there may well be an increased interest in property
investments here, now that the wider international
community has been exposed to our country and some
!"
AGENT | 20
However, Gilmour notes that there are procedures and
requirements which must be complied with in certain
circumstances. This would include the local registration
of entities registered outside of South Africa who wish to
purchase property here, along with the appointment of a
+/ whose shares are owned by a non-resident. “In the event
of a non-resident purchasing property in the country with
the intention of residing here for longer periods, permanent
residency will have to be applied for in accordance with the
given requirements and procedures of South African law,”
says Gilmour.
property, Gilmour points out that non-residents may only
borrow up to a maximum of 50% of the purchase price
in South Africa. The remaining 50% of the funds, he says,
must be brought into the country by the purchaser and
transferred from a recognised foreign bank to a bank in
South Africa. “The total amount that may be borrowed is at
the discretion of the commercial bank offering the loan. A
non-resident must open
pen a ‘non-resident’ account at a South
African commercial bank, to facilitate loan repayments.
This account would normally be funded from abroad or
from rentals received
d on the property purchased, subject to
the bank holding thee account being provided with a copy
of any rental agreement.”
ent.”
But Gilmour notes, South Africa’s Exchange Control Authority allows a non-resident
resident looking to obtain permanent
residence status in South Africa to be dealt with as a
South African ‘resident’
ent’ for exchange control purposes. This takes place upon completion of a so-called
Immigrant’s Declaration and Undertaking issued by South
African banks.
“Once this Declaration has been completed, the applicant
will be eligible to borrow 100% of the purchase price of
the property. However, it will then be the responsibility of
the individual to actually apply for and obtain permanent
residence within a reasonable period,” Gilmour says.
In addition, he notes that non-residents who are in possession of a valid South African work permit are considered to
be residents for the duration of their work permit and are
therefore not subject to borrowing restrictions placed on
non-residents without work permits.
^
in the number of private foreign owned properties over the
<–}
report on foreign property ownership in South Africa, the
total number of foreign owners is up from just over 2000 in
2004 to over 31 000 in 2009. But,” says Gilmour, “the report
also indicates that only 1.6% of privately owned properties
valued higher than R500 000 are currently foreign owned.”
Furthermore, the report notes that the greatest proportion of these foreign owned properties are inland
freehold properties which make up 44% of all foreign
owned properties. “The report does however indicate
that the greatest penetration of foreign owned properties is found in coastal freehold estates where foreign
ownership is only as high as 6.5% of all privately
owned properties valued at more than R500 000,”
Gilmour says.
SOLE MANDATES IS THIS THE BETTER
OPTION?
‘‘
Naturally estate agencies prefer sole mandates because
and costs they put into marketing the property
O
’’
giving an estate agent a selling mandate and it’s essential to
be informed before doing so. Sellers are completely within their rights to ask their estate agent to explain the pros
and cons of selling their home on a sole mandate, open
mandate or through a multiple-listing service.
The choice of whether to go with the sole mandate is entirely the choice of the seller. No estate agency can force you
to provide it with a sole mandate. Naturally estate agencies
prefer sole mandates because of the exclusive rights they
]ing the property.
? ‘ + dates, Open mandates and Multi-listings. A mandate, once
signed, is a contract between you and the estate agency and
you cannot simply change your mind about its provisions
later and revoke it.
They have to offer you exceptional services. They must advertise your home in the appropriate publications as well as
on the Internet, with ‘For Sale’ boards outside the property (if
the local municipality allows it), and a show house must be
held at least once a month, throughout the mandate period.
The Sole Mandate
It’s sensible to give a sole mandate for a period of three
months. Beware of mandates that add a clause stating that
!
date, unless you cancel it in writing. The agency may come
] the property.
The sole mandate is a legally binding contract entered into
by the seller and the real estate agent. It gives the agent the
legal right to be the only marketer of the property over a
certain period of time and at a price agreed to by the seller
and the agent. It is essential that the standard form used by
an estate agent is correctly drawn by an attorney so that the
interest of the seller and the agent is protected. If agents are
sincere in their determination to sell a property, then there
sign a sole selling mandate.
The sole mandate system is the most popular in the South
African market. It has a long tradition within the industry,
which has allowed professional estate agents to perfect the
accompanying marketing plans, ensuring that the marketing of the property receives their full attention and commitment. Selling by sole mandate ensures the most possible
privacy and least amount of inconvenience to sellers, and
also protects them from double commission claims. This
form of marketing is, however, most effective when embraced by well-established estate agencies that have strong
market penetration in the area in which the property is
situated, and whose budgets allow for extensive media
advertising.
The Open Mandate
This is often no more than a verbal instruction to an agen
seller’s part. The open mandate liberates sellers from the
need to sign any mandate documents, but is the least
effective form of marketing. Professional agents are reluctant to actively promote an open mandate property in terms
of advertising and show days, because they know the door
is always open for a competitor to step in with a buyer after
all their hard work and promotional costs.
It appears attractive and non-committal, but agencies
obviously don’t like doing business like this. The most
professional and successful sellers will brush aside open
mandates. It’s always a question of quid pro quo - value for
value. If you are looking for a professional agent to deliver
a professional service, the open mandate will probably not
>
be the best choice.
AGENT | 22
AGENT | 23
‘You can’t pressurise the agencies to
market your property consistently.
They can come and go as they please,
and advertise your home as they choose.’
Multi-listing
While it is the system most frequently used by sellers in the
United States, it also has merit in South Africa, where it is
fairly widely applied. The property is listed by the agency
of the seller’s choice, and is then opened up to the local
multiple-listing service members, any of whom can market
and sell it. This guarantees good market exposure, but be
prepared to be inconvenienced. You will be required to
hold what is known as an ‘open hour’ at least once during
the period, where representatives of each agency come to
your home and assess its condition. All agencies involved
may now sell your home. This can be inconvenient as
appointments can be requested at awkward times for prospective buyers.
You can’t pressurise the agencies to market your property
consistently. They can come and go as they please, and
advertise your home as they choose. They have no obligation to you because numerous agents are involved and have
the rights to market and sell your property. Buyers naturally
go from one agency to another to get the full inventory of
properties on sale, so it’s quite possible that the same buyer
may be introduced to you by different agencies. You need
to exercise some care here, as you may be liable for double
commission to both agencies when you sell. You’ll always
be obligated to the agency that actually concludes the deal,
as its sales agreement will bind you contractually to pay its
commission.
If another agency brought the same buyer to you previously and presented you with a written offer for the same
purchase price, or higher, it can claim commission too on
the grounds that it was the effective cause of the sale. It
won’t help you to say you weren’t willing to sell initially but
`] sion by the other. This caution does not apply where the
nothing further transpired.
AGENT | 24
‘‘
Pressure is exerted on the seller to
accept the offer being presented, because
if that buyer does not get the property
another agent’s buyer will
’’
Other benefits of signing a sole
mandate agreement
[†
‰‘
It is important to look at the marketing process that the
estate agent will follow before you sign a sole mandate
agreement. Ask to see examples of the marketing material.
Ten different, smaller ads will reach more potential buyers than one big ad. The size of the advertisement is not as
important as the quality of the copy and professional photograph. Do your homework and obtain references from other
sellers.
Decide what price you want to ask for your house. Do not
\
you a higher price. Always remember that you determine
the price at which you wish your home to be marketed but
that you appoint an agent to do the marketing for you.
There are no negatives to signing a sole mandate agreement if both parties involved are honest people. It is also
important that both parties must come to an agreement on
what their expectations from one another are. Quite often,
the seller simply takes some items for granted. It is therefore important that the marketing process forms part of the
agreement with your estate agent, and this agreement needs
to be signed by all parties.
A sole mandate is the only evidence the agent has that
the seller will pay him for his expertise and services.
Sellers tend to forget that agents need to spend money on advertisements etc. to sell the property. If you
install a pool and enter into a contractual agreement after
the pool has been installed.
as seller can rely on:
[]
\‘
[]
‘
[
photographs and text to be handed out during the sole
‘
[ ! ! <
end result in price if one estate agent controls all in ‘
The same rule applies when it comes to the sole mandate
agreement – by signing one, you give permission to the
agent to bring prospective buyers to your home on a daily
ž
process. A sole mandate is simply a business agreement - it
is a legal document that spells out an agreement between
two people. Our law system has looked into the sole mandate agreement and has implemented clauses that protect
both parties. The only thing you need to do is to appoint the
right agent for the job. Of course, in our current times, security is an important factor and this is aided by a mandate
with a sole agent.
Seller benefits
There are many good reasons for the seller to sign a sole
mandate. We know that sellers want the most money for
their property with the least amount of problems. By dealing with one agent this can be achieved. It is a fallacy
that many agents will do a better job than one agent can.
All buyers interested in the seller’s property are funneled
through to one agent who can negotiate with each one and
thus obtain the best price.
Conversely, when the property is given to three agents with
different buyers, each agent is working in isolation. Their
} at any price! The estate agent is then working for the buyer
\}
paid. Pressure is exerted on the seller to accept the offer being presented, because if that buyer does not get the property another agent’s buyer will. Buyers perceive the property being offered through one company and not eight or ten
as more exclusive. They will feel more secure in knowing
that one person is controlling all interested buyers.
www.property24.com
AGENT | 25
JACO RADEMEYER OF JACO RADEMEYER
ESTATES STAKES HIS CLAIM AS THE BEST
IN SOUTH AFRICA’S REAL ESTATE INDUSTRY
The annual Nedbank Property Professional Awards set the benchmark of quality
service and reward the top achievers in real estate. The ultimate real estate
accolade, the Nedbank Property Professional of the Year Award, was presented
to Jaco Rademeyer of Jaco Rademeyer Estates at the awards function held at
The Arabella Western Cape Hotel & Spa on Saturday 4 September 2010.
The awards ceremony followed an in-depth and rigorous
judging process that was based on stringent criteria including the highest turnover and highest established service
satisfaction record.
Above from left to right: Charles de Winnaar of Nedbank
Homeloans, Jaco Rademeyer, Nedbank Property Professional of the Year 2010, and Rudi Botha, Convenor of the
Property Association.
Crowned as the top achiever in real estate for 2010, Rade '* their contribution to the real estate industry, service ethics,
professionalism, community involvement, marketing and
innovation, and commitment to education and leadership.
“The key to success in challenging times is to continually
deliver exceptional service and perform above and beyond
client expectations,” says Rudi Botha, CEO of the BetterGroup and Convenor of the Property Association. “All of the
}…]##
of the Year title serve as an inspiration for the rest of the
AGENT | 26
industry due to their commitment to success.” Based in the
Eastern Cape, Rademeyer has six years of real estate experience under the belt. He believes his hard work, dedication,
professionalism and the new approach he brings to real
Rademeyer celebrated his hard earned success at the glittery
]}
estate professionals and key industry players. Aside from being honoured with the prestigious title of Nedbank Property
# ‚' $ trophy designed by Jenna Clifford, a R35 000 travel voucher
and a media course presented by Nedbank Home Loans.
Pat Lamont of Nedbank Home Loans said that it was a privilege to have such a prominent contingency of qualifying
participants partaking in this year’s event. “It pays testimony
to the fact that through hard work and dedication, professionals can trade through challenging markets and, above
all, excel through such circumstances by making a noticeable difference in going the extra mile.
The industry has seen large scale consolidation and rationalisation over the last two years with a visible decline in
property professionals. It is however reassuring to note that
there are still professionals of resilience in the midst of one
of the most severe global recessions. Nedbank Home Loans
is humbled to partner with property professionals of such
high stature and congratulates the winner, Jaco Rademeyer,
on his remarkable achievement in winning this year’s prestigious accolade.”
Botha described the awards ceremony as a remarkably successful event, one which would not be possible without
the sponsorship support Nedbank Home Loans provided.
“We are very grateful to have a sponsorship partner such as
Nedbank Home Loans who has given ongoing support to
events such as these, which recognise success and promote
professionalism in the industry.”
‘The next 12 to 18 months are looking
promising for the property industry,
and I wish all property professionals
an exceptional year ahead...’
Botha said that overall he was pleased with the outstand
ž
Lions and Movers & Shakers. “The next 12 to 18 months are
looking promising for the property industry, and I wish all
property professionals an exceptional year ahead,” Botha
concluded.
Property information
to assist you in making
PROPERTY
OWNERSHIP SEARCHES
$~Q
Ownership information relating to
individuals, companies and trusts
PROPERTY TYPE SEARCHES
CREDIT SEARCHES
COMPANY SEARCHES
Access to information on property
transfers, physical address conversions,
tenants & suburbs, property valuation and
property history, and other property related
information
Immediate and real time access to credit
’?!
XDS credit bureaus for individuals and
companies
#~<
companies, close corporations and director
/ members through the CIPRO database
–!…!~+
]
all linked interactively on one easily accessible and usable internet based system.
[X'\!!%
011 245 6602, `
55@'5
!!55@
RM006/10
THE PROFESSIONAL DESIGNATION
EXAMINATION
FOR ESTATE AGENTS
The estate agency environment is a dynamic and constantly
evolving one that necessitates the specialist knowledge,
skills and competencies which the PDE is designed to test.
In accordance with the provisions of the relevant Educa-
tion Regulations no person may be registered by the Estate
Agency Affairs Board (EAAB) as a full status estate agent unless that person has successfully completed the Professional
Designation Examination (PDE) conducted by the EAAB.
<
!ducted for non-principal estate agents during March 2011.
The idea of a professional examination, such as the PDE for
estate agents, is neither new nor unique. The PDE, indeed,
is analogous to such professional examinations as, for instance, the Attorneys Admission Examination, which must
be successfully completed before a candidate attorney may
apply to the High Court for admission as an attorney.
!"
#$%&
'%
()*$#+
'"/$&3%
)"(#('%()
It is intended that the PDE for estate agents will be a practice orientated examination to be undertaken by estate
…;
Œ]†…;Œ‰–=
†Œ?
"
$?‰
…;Œ–*=
†…"

Real Estate) for principal estate agents, as the case may be.
The underlying objective of the PDE is to carefully assess
the professional competence of both principal and nonprincipal estate agents by using an appropriate assessment
AGENT | 28
instrument that ensures that the examination is not only
disciplinary practice environment within which estate
agents are increasingly obliged to operate. The estate agency
environment is a dynamic and constantly evolving one that
necessitates the specialist knowledge, skills and competencies which the PDE is designed to test.
$
of Prior Learning assessment, training or the grant of an
equivalency exemption in appropriate cases.
Persons registered as estate agents on 15 July 2008 are
…;Œ =
€' ~
2011.
+ #~? "
of Professional Recognition by the Board as well as a stillto-be-determined professional designation that will also be
+/;
/
Since estate agents who continuously held a valid full
ΠΠ"
> 15 July 2003 to 15 July 2008 have been exempted by
the Education Regulations from having to undertake the
PDE, over 5 000 qualifying estate agents will be awarded
"
# $ > various seminars scheduled to take place countrywide
during August to November 2010.
Estate agents who have been exempted from the PDE must,
…;Œ–*=
€'~‚''=
=
obtained by way of a Recognition of Prior Learning assessment, formal training or the grant of an equivalency exemption in appropriate cases.
;
!
"
#$%&
'%()*
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8%
)
"
(#('
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NOTICE - NEW EDUCATION
DISPENSATION FOR ESTATE AGENTS
PDE exemption does not supersede
the requirements for attaining the NQF
Level 4 or 5 academic qualification
It must be emphasised that the PDE exemption provided
for in regulation 7(3) does not in any way supersede the
requirements of regulation 4(1) of the Education Regulations which provides as follows:
“No person may perform the functions and activities of:
a non-principal estate agent, unless that person has comŒ?"
$
?†+/;/;’/–<~*šš‡‰‘
…"

Real Estate (SAQA QUAL ID 20188).”
/5%
8
+5%%7
'+9)
Persons registered as estate agents
on 15 July 2008 must be certificated
by 31 December 2011
Persons who may, therefore, have been exempted from
undertaking of the PDE will still, however, be required to
Π? "
$?
… "
 $ ? agents as the case may be.
AGENT | 29
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5+
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REPORTING
REQUIREMENTS
TO THE FINANCIAL
INTELLIGENCE CENTRE
What all estate agents operating in South Africa need
to know regarding the revised suspicious and unusual
transation reporting and terrorist property reporting forms
The Financial Intelligence Centre has upgraded its website
and has revised the Suspicious Transaction Report (STR) and
#$†#$‰
Centre in terms of section 29 and section 28A of the Financial Intelligence Centre Act (FIC Act), respectively.
All estate agents are required to immediately use the re+$#$
Centre. The revised reporting forms are available on the FIC
Z
Acquiring of new secure login
credentials by accountable and
reporting institutions
The centre has also introduced for accountable and reporting institutions a process of acquiring new login credentials
for the submission of STR and TPR forms to the Centre. To
acquire the new login credentials a link has been provided
Œ<"
Z
The secure online login process will provide the user with
=
reports as their details will be automatically pre-populated
on the electronic reporting form, when entering their secure
login credentials. All estate agents, including regular reporters, are strongly encouraged to acquire new login credentials from FIC using the revised process as soon as possible
as all previously acquired login credentials from FIC will
expire shortly.
Rollout of the Cash Threshold
Reporting Process
FIC is pleased to advise that all estate agents operating in
South Africa of its intention to implement the Cash Threshold Report (CTR) obligation in terns of section 28 of the
Financial Intelligence Centre Act, 2001 (FIC Act), for estate
agents by >"[=>">5
F
?5
The purpose of Cash Threshold
Reporting
CTR provides a mechanism to monitor reported cash
transactions so that potential proceeds of crime are iden
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that accountable and reporting institutions, as described
in schedule 1 and schedule 3 of the FIC Act, must within
the prescribed period, report to the Centre the prescribed
particulars concerning a transaction concluded with a
client if in terms of the transaction an amount of cash in
excess of the prescribed amount:
a) is paid by the accountable institution or reporting
institution to the client, or to a person acting on behalf of
the client, or to a person on whose behalf the client is
acting: or
b) is received by the accountable institution or reporting
institution from the client, or from a person acting on
behalf of the client, or from a person on whose behalf
the client is acting.
Definition of cash
"3x
a) coin and paper money of the Republic or of another
country that is designated as legal tender and that
circulates as, and is customarily used and accepted as, a
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b) travellers’ cheques
"
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instruments, transfer of funds by means of a bank cheque,
AGENT | 30
bank draft, electronic funds transfer, wire transfer or other
written orders that do not involve the physical transfer of
cash. These methods of transferring funds will not be covered by the CTR obligation under section 28 of the FIC Act.
Physical cash payments in excess of the threshold amount
received by the estate agent will have to be reported.
Where an estate agent pays a client physical cash in excess
of the threshold amount, this will have to be reported. Estate
agents will also be responsible to report cash in excess of
the threshold amount received by an agent on their behalf,
e.g. cash received by a bank on behalf of an estate agent. It
is important to note that where cash in excess of the threshold amount is received or paid by a bank into or from an
account held in the name of the estate agent, that there is
a duty on the bank as well as on the estate agent to report
the cash transaction to FIC under section 28 of the FIC Act.
Presecribed amount
The prescribed threshold amount will be ?=# >>>5>> or
the equivalent foreign denomination value calculated at
the time that the transaction is concluded. In particular,
where foreign currency forms part of a cash transaction that
requires the completion of a CTTR, the estate agent must
apply the exchange rate in effect for the business day of the
transaction to calculate the amount in ZAR. It is important
to note that aggregation is applied to the threshold amount
of R25 000 or an aggregation, where multiples of smaller
amounts would add to the threshold amount of R25 000.
The calculation of aggregated transactions is directional,
i.e. either an inward or outward direction of cash, but no a
combination of the two. It is either withdrawals (payments)
or deposits (receipts).
ZĞĂůƐƚĂƚĞƵƐŝŶĞƐƐ^ĐŚŽŽů
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Knowledge of the transaction
=
"$tate agent has knowledge of the cash threshold transaction.
This knowledge will normally be acquired when the estate
agent physically receives or pays out cash to the value of
R25 000 or more, or peruses its bank statement or a bank
to the value of R25 000 or more.
Electronic method of filing
a CTR preferred
FIC have developed an electronic process, making use of an
"}
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with the Centre.
Individual branch login credentials
Each branch or an estate agency is regarded as a separate
accountable institution and is required to acquire a separate
login credential from FIC to enable each branch to separately report a CTR to the centre. For example, if estate agency
ABC has two (2) branches in Cape Town, one (1) branch in
Bloemfontein and another branch in Pretoria, each of these
branches will have to acquire separate secure login credentials from FIC. The separate reporting by branches of estate
agents will enable FIC to identify the geographical areas
from where the reports are received.
AGENT | 32
THE CONSUMER PROTECTION
ACT (CPA) DUE TO TAKE
EFFECT IN OCTOBER 2010
The Consumer Protection Act (CPA), due to take effect on 25 October
this year, will mainly force agents to ensure property sellers and buyers
understand the wording and legal effect of all contracts they enter into.
If this is not complied with, the Act gives wide latitude to
the consumer to seek legal recourse and compensation.
Simon Raab, Southern Suburbs manager for Greeff Proper]
^
ballpark” when this Act is implemented.
Raab warned that agents will have to take it upon themselves to ensure that sellers and, more particularly, buyers,
have fully understood the meaning of the wording and legal
effect of such wording contained within all mandate agreements and contracts into which they have entered. “The
aim of the new Act is to promote a fairer, more accessible
and more sustainable marketplace in which the less wellinformed and less educated clients are better protected.”
Furthermore, said Raab, if in any way the quality of the
product or the service rendered falls short of generally accepted high standards, the customer will from November
onwards, be entitled to claims, replacements or even to a
‘The wording of the Act makes it clear
that all in the ‘supply chain’ can be
held responsible’
total cancellation of the agreement. “Consumers will also
have an opportunity to approach the National Consumer
Commission instead of the Magistrate’s or High Courts,
which in itself will encourage more action being taken
when damages can be proven.
“The wording of the Act makes it clear that all in the ‘supply
chain’ can be held responsible. This, as I read it, implicates
the agent as well as the manufacturer or, in the property
\_
Steven Kay, MD of Home Inspection Services, says Section
55 of this Act places a responsibility on estate agents to
ensure that potential buyers are fully informed regarding
the condition of the property.
“The ‘As Is’ or ‘voetstoots’ clause in an Offer to Purchase
will no longer protect estate agents from the perils of nondisclosure. This means that the challenge for estate agents is
to provide full disclosure up-front to potential buyers.”
Dr Andrew Golding, CE of Pam Golding Properties (PGP),
/hanced protection for consumers against exploitation and
unfair marketing and business practices. “Property buyers
formation and the setting of standards and national norms
relating to consumer protection.
“I do believe that the Act is a good thing that will offer improved protection to the most vulnerable of consumers,
=tions. Consumer issues will also be dealt with in a less fragmented way and the Act has sought to consolidate various
pieces of legislation in relation to consumer protection. The
regulations to be promulgated under the Act will provide
greater clarity with respect to the implementation of certain
of the Act’s provisions.”
He says PGP has already commissioned a review of their
standard documentation and business and marketing practices to ensure that changes are made where necessary and
new processes implemented as required. “We believe that
this review will be an ongoing process in light of the interpretation by our courts of the new Act’s provisions.”
The CPA is set to have a massive impact on virtually every
business in the country, including the real estate industry,
#”$?\`/œ+/
He says that, for example, the CPA states that a supplier
cannot make any false, misleading or perceptive representations that any land or immovable property has characteristics, facilities and amenities that it does not have, or that
it may lawfully be used for purposes that are unlawful or
impracticable. “As per this particular clause, any false representation or inaccurate concepts, whether delivered
knowingly or not, could, under the CPA, make it possible
for the buyer, on appeal of the courts, to get the contract
>
cancelled.”
AGENT | 33
Furthermore, it deals with restrictions pertaining to unfair,
unjust or unreasonable terms, and stipulates that the price
and terms must be fair. “This is a relatively controversial
provision, as it could be used as a price control mechanism.
In reality, with markets and demand in a constant state of
!
/
fair price is what the market at any particular given time is
willing to pay for a property,” he explains.
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ǁǁǁ͘ĐŽĚĞdžĐƌĞĂƚŝŽŶƐ͘ĐŽ͘njĂ
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Gilmour notes that in terms of Section 55 of the CPA, every
consumer has a right to receive goods that are suitable for
the purpose for which they are bought and free of defects.
He explains that the exception to the aforesaid is if a consumer has been expressly informed that the goods were of
condition. “However, this particular section does not apply
to auctions.”
‘the seller will need to sign a
declaration that they have listed
everything that they are aware of, and
likewise, the buyer will also need to
sign a declaration noting that they have
read and fully understood the list’
The CPA is limited to transactions that are concluded as part
of the regular business of sellers, suppliers, distributors and
manufacturers. “As long as it is not their usual business, the
Act does not apply to once-off transactions undertaken by
private individuals who sell their property. However, pertaining to the real estate industry, if the supplier of the home
is a developer or builder, and defects become evident after
the sale, they will be held responsible.
Gilmour says the seller will need to sign a declaration that
they have listed everything that they are aware of, and likewise, the buyer will also need to sign a declaration noting
that they have read and fully understood the list.
“If enforced successfully, the CPA will no doubt instil great
] well as weed out unscrupulous operators, which will be to
_
$]
of all concerned because it will result in more transparent,
open dealings coupled to strong deterrents against any form
of misrepresentation.
Raab added that the Act does not in any way do away with
the basic stipulation that all property deals have to be in
writing, “but it will make it necessary to ensure that the
wording of these deals is clearer and simpler than in the
past”. Greeff Properties, he said, would be consulting with
their lawyers on this matter.
+
=>
AGENT | 34
SAFRE CELEBRATING 10 YEARS
IN THE PROPERTY INDUSTRY
@**/(*3(9*!6
*$
SOUTH AFRICAN FORUM
OF REAL ESTATE AGENTS
The South African Forum for Real Estate, previously known
as “Emerging Estate Agents Forum” celebrated their 10th
Anniversary at a prestigious Gala Event proudly sponsored
by ATASA (a proud member of the Tirhani Group).
As SAFRE has made a huge difference in many previously
disadvantages estate agents’ lives in South Africa over the
past 10 years, various role players were recognised and
honoured.
Ms Lischel Baker a former bond origination consultant and
six principal estate agents, Segoale Mojapelo, Molly Mahlangu, Nellie Kgatle, Isaac Banda, Tebogo Kolwane and Collins Serepong, received the Founders Award presented by
the current chairperson of the Forum Mr David Phashe.
?
SAFRE is currently driven by a board of 6 directors, who
are all active Estate Agents in their own right. SAFRE is a
all role players received an Award for their dedication and
/
banks, motivational speakers and trainers also received an
Award.
The speakers of the evening were the CEO of Tirhani Group
Mr Mabunda whose speech was based on empowerment
and transformation. Mr Jacques van der Merwe from Jacques
van der Merwe Maja Attorneys and Ms Lindiwe Bulu from
the Estate Agency Affairs Board congratulated the Forum on
their successes and on their 10 Year Anniversary.
AGENT | 36