Seminar notes from the Part 2 KNOW YOUR GAME seminar series for South Africa Property Professionals, run from July to November 2010.

1. As presented by Dieter Deppisch
Head of Property Data Research for SAPTG
A division of Knowledge Factory (Pty) Ltd
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2. 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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3. 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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4. 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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5. 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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6. Deeds Records on SAPTG
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7. 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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8. 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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9. 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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10. 10

11. 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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12. 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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13. Global Quick View
Knight Frank Global House Price Index - Year-on-Year. Q1 2010 price growth
1 China 68.0%
20.0%
4 Australia
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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14. 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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15. 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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16. 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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17. 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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18. 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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19. 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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20. 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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21. 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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22. 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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23. 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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24. 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
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