Monthly Archives: February 2016

THE City of Johannesburg will not pin liability for historical property debt on new owners

THE City of Johannesburg will not pin liability for historical property debt on new owners.

Instead, it will insist that a previous owner settle all outstanding debt against a particular property prior to it being transferred to the new buyer. The group finance department has hired a firm of consultants and attorneys to do this.

This move goes against a recent Supreme Court of Appeal ruling, which found that a present-day owner could be held liable for old debt incurred against a property for up to 30 years prior.

The city, insisting on its new approach, has collected R730m in historical debt against 25,033 properties.

Spokesman for the city’s group finance department Stanley Maphologela said the city would write to transferring and conveyancing attorneys to inform them of steps to be taken to demand payment of outstanding debt, and if not effected, Johannesburg will approach the courts to enforce payment.

“Where a sale of the property takes place, a demand will be made to the transferring attorneys and Sheriffs for payment of outstanding municipal debts, this in keeping with section 118 of the Systems Act,” said Mr Maphologela.

“Many of our clients, who are sometimes first-time buyers, are often caught by surprise when they face the huge debt that has accumulated under the previous owners (sellers). Now we want to ensure that we collect all the outstanding debt from the seller before the transfer of property happens as not to negatively affect the new buyer.”

Prospective buyers are now able to directly approach the city for details on the entire debt against a property.

“Furthermore, the buyer has the right to approach the city to obtain the municipal statement of the seller (property in question), on condition that they can produce a valid offer to purchase document which is signed by all parties (the seller, buyer and estate agent). The buyer also has the right to request a copy of the seller’s municipal account from the estate agent before entering into the contract.”

The move by Johannesburg is in line with efforts by the South African Local Government Association (Salga) — representing 278 municipalities — to ensure that property owners with unpaid bills in one municipality will not be able to buy property in another municipality before settling their outstanding debt.

Salga has called for the establishment of a central database of residential property owners and business owners with outstanding rates and services bills. The database will be linked to the issuing of municipal clearance certificates.

The association has further called for sellers of property to be made liable for debt owing beyond the two year prescribed period.

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Posted by on 29/02/2016 in Content


Protect Yourself against Defects – Buying or Selling

Every year thousands of homes are traded between buyers and sellers without any guarantee that these properties are free of defects.

“Home warranties protect all parties involved in the property sale against any financial and legal comebacks related to defects,” says Dobrescu.

This is according to Lee-Ann Dobrescu, Head of Group Business Development at Hollard, who says the defect could be a hidden flaw or weakness that a seller might or might not know about, but the buyer cannot discover through reasonable inspection.

Dobrescu says such defects can cost a fortune to fix, not to mention an expensive and frustrating legal process if there’s any doubt that the seller did not fully disclose known defects.

A home warranty addresses these challenges, providing the buyer with the peace of mind and security that comes with a professional property inspection, coupled to an insurance policy that protects against the financial ramifications of any defects that may emerge in the property for two years after taking transfer.

Dobrescu says there are many benefits to having a home warranty in place.

For buyers:

  • Peace of mind knowing that you can go into the deal with all your bases covered.
  • Protects your financial interests, which are almost always stretched to the max when buying – with deposits, bond and transfer costs, municipal deposits, moving costs and so on. The last thing you need is unplanned bills to fix hidden defects.
  • If you do find your dream home, albeit with a few minor problems, you won’t end up walking away from a great deal because you overestimate the extent of and cost to fix minor problems.

For sellers:

  • A home warranty makes your property instantly more marketable to serious buyers.
  • It bridges the trust deficit that exists in a property sale, speeding up the sale.
  • It can mean getting a higher price for your property as the buyer knows exactly what they are getting, and you’re less likely to be negotiated down.
  • You can choose to attend to any excluded or minor repairs beforehand and ensure maximum sale price for your property, or if you prefer to sell as is, you won’t overcompensate by bringing your price down further than what the cost of the repairs would be.

“Home warranties protect all parties involved in the property sale against any financial and legal comebacks related to defects,” says Dobrescu.

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Posted by on 19/02/2016 in Content


Good news for Home Owners in the Western Cape

It is hard to believe with all the pressure on home owners that there is still a ray of sunshine somewhere and it comes in the form of a government Flisp subsidy for first time home buyers and current new home owners.
We just received good news from DOH in the Western Cape – they asked us to submit as many as possible Flisp applications by the end of March as they have un-allocated funds available for existing home owners & buyers with approved home loans. They will also relax their income requirement by applying the income of the applicant at the time of bond approval and not the income as on date of the Flisp application. This initiative can be a huge boost for new home owners – considering the interest rate hikes over the past 12 months. Existing qualifying home owners who took transfer from February 2015 – to date may apply. The qualifying criteria are:

  • Current home owner who took transfer as from February 2015 – up to date, or whose home loans have already been approved but not yet taken transfer
  • Earn between R3501 – R15 000 at the time of the home loan approval – gross combined household income
  • Approved home loan – from one of the 4 x big banks and SA Home Loans
  • Must:
    • be a first time home owner
    • have dependents – if single
  • South African citizen or holder of a valid permit

To apply and register through our website

For more information on Flisp subsidies – from a previous media release.

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Posted by on 04/02/2016 in Content