Property 24/10 - 537

28 Jan 2021 12:00 am

This week on Property24.com: What is considered unfair practice for Level 3 evictions; checking the title deed before making an offer to purchase is important; and the Law of Diminishing Returns expected to kick in for SA house prices.

Level 3 Evictions | What is considered unfair practice?
Now that we’ve back in Alert Level 3 of the National Disaster Act, what is the state of play with evictions?

There’s a strong sense of déjà vu in the country at the moment. If it weren’t for the weather, you might think it was July all over again. We’re in the middle of a devastating second wave of COVID-19. So the government has had to rewind the Disaster Management Act back to Alert Level 3. Tenants and landlords want to know if evictions are still permitted, as they were under Alert Level 1?

Although the Level 3 regulations have been adjusted, certain core conditions remain. According to the Disaster Management Act regulations, “A person may not be evicted from his or her land or home or have his or her place of residence demolished for the duration of the national state of disaster unless a competent court has granted an order authorising the eviction or demolition.”

However, a landlord may still apply to the court for an eviction, which may be suspended until after the national state of disaster is lifted, or such time as the rules allow.
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Why checking the title deed before making an offer to purchase is important
The property market was brought to a standstill with the Deeds Office closure last year, but many might fail to understand why. For clarity, one first needs to understand that the title deed is a document that proves legal ownership of a property in South Africa - and the Deeds Office is where copies of these documents are held.

When these offices close, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa explains that no properties can be bought or sold as the title deeds cannot be transferred into the new owner’s name.

“According to the Deeds Registries Act, 47 of 1937, anyone who purchases a home will need to have the title deed transferred into their name as proof that they own the property. This is why several Deeds Offices are found throughout the country, each tasked with handling a particular area of jurisdiction. The office within the closest proximity to where the property is located will keep a copy of the home’s Title Deed in the form of the Deeds Registry. This registry is open to anyone who requires access to this information for a nominal cost,” he clarifies.

In most cases, the original copy of the Title Deed will be held by the financial institution through whom the buyer has acquired his/her home finance.
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Law of Diminishing Returns | SA house prices expected to 'decline by 6% in 2021'
More South Africans are selling due to financial pressure, with the impact of the low-interest rate expected to diminish and forecast job cuts set to dampen demand. And while the lower end of the property market has seen robust growth, a combination of unemployment and a possible supply glut could mean further house price pressures, across the spectrum.

The average annual house price growth reached 2.1% in 2020, down from 3.5% in the previous year, with much of the growth seen in the lower end of the market. FNB, however, expects house prices could fall by as much as 6% this year.

FNB economist Siphamandla Mkhwanazi says the pandemic had a profound impact on global output in 2020. "Many economies experienced sharp recessions, unemployment spiked, and incomes stagnated. Yet, housing markets in major economies remained relatively unimpacted, showing robust growth - South Africa included".
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Landlords and tenants under pressure as vacancies rise, with Gauteng hardest hit
Decreased demand for rented accommodation during 2020 pushed up vacancy levels, according to the TPN Vacancy Survey for the fourth quarter of 2020. Income constraints were cited as the biggest contributor to tenants’ early cancellation of lease agreements.

These statistics are confirmed by the BankservAfrica Take-home Pay Index which shows that 10.4% less workers were paid a salary in October 2020 compared to October 2019. Less people earning salaries means that fewer households are able to afford the basics like accommodation.

A total of 3.7 million households live in rented accommodations, with 3 million households renting formal housing including houses, flats, apartments, clusters, townhouses or semi-detached dwellings, a backyard house, flat or room, granny flat or servant’s quarters. The balance rent traditional or informal dwellings, according to the Stats SA General Household Survey released in December 2020.

The TPN Vacancy Survey has found that landlords are experiencing increased vacancies, which in the final quarter of 2020 went up to 12.91%.
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