Hard to believe half the year has flown by!
It has been loaded with politics including a national election and the finalisation of parliament, economic data for the first quarter that sucks at -3.2% GDP growth, SOEs’ revelations every day that boggle the mind, defamation claims that seem to have become lawfare, and emigration statistics that leave you reeling. Never a dull moment in SA Inc.
That said, we have survived and even Donald and China seem to be reaching some agreement. Hauwei or Meiwei is Donald’s Wei but I Mustsei, he currently has the best stock exchange performance in the world – often in excess of 15% with the Nasdaq flying. And then there is the Brexit “Deal or No Deal” show which, with the weakest Bachelor I have ever seen, has had us glued to the screen more than Netflix. I never knew I would binge on Theresa May – flicking from her to Deputy Chief Justice Zondo more times than a fly escapes its swatter. Never a dull moment in world politics either.
Our property market has moved sideways and getting a positive article out of anyone that I didn’t think was simply “talking it up” has been really hard. But out there, hard-working men and women have made ends meet and sold and sold despite the push-back of the market. That it is a buyers’ market, there is no doubt but even getting a buyer to bite has been tricky. You can’t do deals with people walking through your show-house; you actually need an offer to make a negotiation possible. My friend who has had 25 couples come through his house in two months feels exactly what I’m talking about. But I must say, both from a rate and an approval point of view, the banks have remained really good. No shut down from them and truly, they hold the key to continued sales and borrowing. If we can just hold Eskom solvent, we have a good chance of emerging from the mess we are in. Heaven help us, please!
Getting technical for a moment, I received a good article in Businesstech, 29 June 2019, quoting Tobie Fourie, National Rentals manager, Chas Everitt and entitled, New South African rental laws may be implemented soon – these are the changes you need to know about, that gave some good insight for those of us owning buy-to-lets or in the rental business. Some extracts:
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The Rental Housing Amendment Act will be implemented soon. The ‘new’ Act – which was actually passed in 2014 – contains the most recent amendments to the Rental Housing Act of 1999, which is still in force.
The act currently governs the overall relationship between tenant and landlord and sets out their statutory rights and obligations and aims to clarify certain aspects of the older Act that have given rise to many differences of interpretation.
The main provisions that landlords and tenants need to be aware of include:
- It will become compulsory for lease agreements between the landlord and the tenant to be in writing and legally enforceable.
- All sections of the lease and any explanations and definitions it contains will need to be explained to the tenants and understood before the document is signed.
- It will be the landlord’s responsibility to ensure that the rental property is in a habitable state, which is in line with the existing Rental Housing Act.
- The landlord will be responsible for maintaining the rental property and will have to ensure that it has access to basic services such as water and electricity.
- Only the local authority will be permitted to cut off services to non-paying tenants.
- No tenant may be prevented from entering the rental property or denied access to the rental property without a court order.
- A joint inspection by the landlord and tenant has to be done on the commencement of the lease period, and if the landlord does not participate in this inspection, no part of the tenant’s deposit for repairs or damages may be withheld when the tenant leaves.
- A defect list will have to form part of the lease agreement as an annexure.
- When the deposit is paid back to the tenants, the interest earned on that deposit must also be paid to the tenant within seven days of the expiration of the lease, subject to any deductions for damages.
Landlords who fail comply with these and other requirements within six months of the new legislation coming into force could be liable to pay a fine or even face a jail sentence for non-compliance.
“And these legal complexities will make it all the more important for landlords to appoint reputable, reliable, knowledgeable, qualified and legally registered rental management agents to assist them and ensure they remain compliant”, said Fourie.
Let’s face it, if you are letting a premises that is not habitable, without a written lease and for which you do not have an inspection list at the beginning and the willingness to fix problems that arise, you should not be a landlord. On the other hand, good landlords have always paid some interest on deposits as they have earned [read: saved] interest if they took the money and put it in their bond on the property. But, there is the nagging feeling that letting is carrying more and more onus on the landlord to be proven right and the tenant to be proven wrong. Having said this, I can honestly say I have never had a bad tenant. Those of you who have will tell me to be very grateful, I know.
We enter the second half. Hopefully our politics settles down and the Zondo Commission provides an interim report on glaring state capture and we have a rate decrease. Then if we can hold onto our investment grade from Moody’s and fund enough of Eskom to keep the lights on, we may be through the first part of the drift. It’s knife edge to be honest but failure is also not an option.
Neither is pessimism. I understand how you feel believe me but one thing I know from personal experience is that all the worry in the world does not move you forward. Worry is like sitting on a rocking chair thinking you’re moving. You’re not; you’re just standing still and getting weaker every day, physically and emotionally. Cut it out and remind me to do the same if I lapse back. Homeloan Junction is in the same boat as you, nothing more and nothing less. We are here to support you to the best of our ability and are onside to help you succeed. Success to you in the second half!! – the same success we wish ourselves.
Yours in Property.