South African listed property market lacks value for investors

South African listed property investment Continue reading →

Whose property is it anyway?

In two years time South Africa will go to the polls to put our X where our mouth is, and we will vote for a party that provides us with a decent service. But when it comes to more personal matters, are we as decisive?

It’s all about service delivery, and government is not the only area where it’s sadly lacking.  As a member of a body corporate or property owner’s association that employs a property management service, you are exposed to the good, the bad or the downright incompetent.  If it’s either of the last two, what are you doing about it?

People have learned the value of burning tyres and lobbing bricks to get their point across.  A bit extreme, but a lesson nevertheless.  All it needs is a decisive ‘no’ to rid yourselves of poor service when it comes to property management. If you are in any doubt about taking the step to replace your agents, just remember, it’s no exaggeration to say that the value of your property is determined by the quality of its management service. Try selling a unit in a body corporate whose finances are in the red.

Take the test and see how your property management rates:

-       Do you know what your levies are spent on?

-       Do your levy invoices arrive on time and are they correct?

-       Do you receive regular financial reports?

-       Are insurance claims properly dealt with?

-       Have you had to pay a special levy because expenses have not been adequately provided for?

-       Is the Body Corporate/managing agent responsive to your concerns and queries?

-       Are you subsidising owners who are not paying levies?

-       Are levies being increased because of bad financial management – or lack of recovery of

Just one iffy answer to any of the above, and you need to make a call.

De La Porte Property Management (DLP) offers you a fresh, comprehensive, professional service at a price that suits the requirements of your complex. So the cost is entirely in line with your budget, and could save you money.

We are members of the National Association of Managing Agents (NAMA) and align ourselves with its code of conduct. And just so you know we take this whole business seriously, we use the industry’s ultimate property management software.

Our services include (but are by no means limited to)

Commercial, industrial and residential property management.

• Day to day maintenance and operational support.
• Arranging and attending meetings, arbitration hearings, AGMs & more …
• Practical application of our in-depth knowledge and understanding of Sectional Title and general property legislation.

We also offer a bookkeeping service with additional benefits, at nearly half the price of the industry standard, for smaller complexes that either can’t afford or don’t need the full management service.

Call Jonty de la Porte on either 021 551 9777 or 082 650 3322 to talk about what you need, or send an email to jonty@delaporte.co.za. Take a look at our website www.delaporte.co.za to see a detailed list of our services and to find out more about what we do.

How many proxies can one person have?

There seems to be some confusion of late as to whether a person can hold more than two proxies or not. The simple answer is yes: a person can currently hold more than two proxies – there is no limit … Continue reading →

Nersa launches R5bn energy saving plan

Increasing electricity costs for commercial property owners have inspired a R5.25 billion programme by the National Energy Regulator (Nersa) to help owners swap the current 50 Watts halogen down lighters with low consumption L.E.D lighting at no cost. This proposal … Continue reading →

Montague Park Shows Promise

Once a derelict fertiliser plant, Improvon has revived the land on which Montague Park near Cape Town is built, transforming it into a mixed use site with multiple benefits for users. Stefano Contardo, Developments Executive at Improvon, explains that Montague … Continue reading →

Ingenuity Develops R215m Office Block In Tygervalley

Development company, Ingenuity Property Investments, is developing a third office block in its prestigious Santam office park in Tygervalley at a cost of R215 million. Ingenuity CEO Arnold Maresky says Glacier and Santam, both part of the Sanlam Group, will … Continue reading →

Quorum requirements for member meetings

The concept of the quorum for a meeting might not be clearly understood by everyone. A quorum can be defined as the requirement for members to be present at a meeting in order for that meeting to begin and make … Continue reading →

Chevron SA to build new ‘green’ headquarters at Century City

Chevron South Africa has bought a gateway site at Century City from the Rabie Property Group, where it is to build a new 9 000 m2 green head office. The building is being designed by Louis Karol Architects who competed … Continue reading →

Park Lane developers to invest further R10 million after 75% presales

Seventy-five percent of the units have been sold in the first two buildings at Park Lane Office Park, Horizon Capital’s new office development in Century City, and the developer has decided to invest a further R10 million to satisfy the … Continue reading →

Who’s liable for your leaking roof?

You buy your dream house, you settle in, all’s well. Until it rains, and the roof starts leaking. Who’s liable? The law, and the limits to voetstoots First, determine whether the leak problem is a latent defect, i.e. one that … Continue reading →

Phase two of the industrial precinct in Montague Park in Milnerton, Cape Town set to launch

The new industrial warehouse development in Montague Park, Milnerton, Cape Town

Following on from the hugely successful launch of the new Makro store in the retail precinct of Montague Park, the large mixed-use development on the corner of Koeberg Road and Plattekloof Road in Milnerton, the second phase of the industrial precinct is about to be launched by the developers.

The first phase of the industrial precinct is almost finished with three tenants about to take occupation of the large industrial units. There are only two units still available to rent.

The industrial units tick all the boxes of what is required by modern distribution and warehousing companies; high eaves for racking, generous yard space, large turning circles for interlink trucks, undercover loading facilities and sprinklers.

Units in phase two of the industrial precinct will range in size from 1250m2. There is currently a 4000m2 unit and a 2000m2 unit available to rent in phase one.

There is 143 000m2 of industrial development allowed in the industrial precinct of Montague Park and warehouse and office facilities as large as 60 000 m2 can be catered for.

There is a large availability of power for heavy powers users should it be required.

The park is monitored by CCTV and there are manned gatehouse access controls  to the industrial precinct.

For more information on industrial letting opportunities in Montague Park, please contact either Rob Ryll (082 774 2662), Jonty de la Porte ( 082 650 3322) or our office on 021 551 9777.

One of a kind industrial warehouse sold and then let in Montague Gardens

Rob Ryll outside the industrial warehouse in Jig Avenue Montague Gardens which he recently sold .

Rob Ryll of De La Porte Property Group recently sold a prime industrial property in Montague Gardens to a private investor. The property consisted of a 900 m2 warehouse building on a 2000 m2 piece of land

Although the property was sold with without a tenant in place, the investor had the foresight to realise that industrial properties in Montague Gardens, such as this one, don’t often come on to the market; so he had the confidence to take an educated risk and invest in a building with no income stream.  The investor was also prepared to pay a good price for the property because of its scarcity and because it had all the right attributes.

The fact that the building is able to satisfy a number of industrial uses meant that Rob Ryll was able to find a national, blue chip tenant for the building within a month of the transaction date and before transfer was given to the new owner.

The building has a loading ramp, more than one roller shutter door, a good floor to roof height and a large concrete yard.

De La Porte Property Group has recently sold a number of prime industrial buildings to investors who were prepared to buy them without tenants in place, purely because they saw the intrinsic quality and value of the building rather than being narrowly focusing on the initial yield that the investment showed.

Investors who are only prepared to buy buildings with tenants in place and on high initial yields have found that in a number of instances they have missed out on purchasing quality buildings that have been sold and then tenanted in short order.

Despite the perceived market sentiment, we were instrumental in a number of sales last year and our success seems to have carried on to 2012.

For more information, please contact Rob Ryll of  De La Porte Property Group on either 021 551 9777, 082 374 2662 or rob@delaporte.co.za

Commercial Property Prospects for 2012: FNB

Signs of economic weakness and rising vacancies suggest a flat commercial property year in 2012 Recently, FNB’s All Commercial Property Performance Indices have started to point to weakening performance ahead. The 3rd quarter did see some rise in the All … Continue reading →

Fight over seized wine farm heats up

Billionaire Wendy Appelbaum is lodging a formal complaint against top auctioneer Rael Levitt at the National Consumer Commission as the fight over a prime Cape wine estate turns nasty. Appelbaum bid R55-million for Dave King’s 194-hectare Quoin Rock estate outside … Continue reading →

State employees now own stakes in top malls in SA

PIC purchases two property companies that give government employees stakes in some shopping centres THE Public Investment Corporation (PIC) has bought two property companies that give government employees and retired public servants stakes in some of SA’s premium shopping centres. … Continue reading →

Pending Constitutional Court decision could hamper upgrading of urban residential stock

Investment property owners, especially landlords of low cost residential property in high density urban areas, are awaiting the outcome of a trial in the Constitutional Court with some trepidation. Gunstons Attorneys’ commercial director, Trudie Broekmann, says this is likely to … Continue reading →

The pitfalls of Sars’s tax amnesty for properties

  Transferring your property into your own name could change the interest on you bond. JOHANNESBURG  – Those planning to take advantage of the South African Revenue Service’s (Sars’s) amnesty to transfer their primary residence from a company, trust or … Continue reading →

2012 commercial property market outlook very cautious

The prospects for the commercial property sector for 2012 are definitely a lot more promising than 2011. “In a very short time frame, we are already seeing an uptick in enquiries in both the office and industrial sectors of the … Continue reading →

Green hotel for Cape Town Airport

Domestic and international travellers to Cape Town International Airport will soon be able to check into what will be the greenest hotel on the continent. Currently in the final stages of approval, the luxury hotel in Michigan Street, less than … Continue reading →

Revised sectional title rules for levies and budgets

One of the recent amendments to the prescribed management rules made under the Sectional Titles Act has not generated the debate that I thought it should have.

The rule in question is PMR 36 (1), which now reads as follows:

36. (1) Prior to the commencement of every financial year of the body corporate, the trustees shall cause to be prepared an itemised estimate of the anticipated income and expenses of the body corporate for the ensuing financial year, which estimate shall be laid before the annual general meeting for consideration in terms of rule 56 hereof.

The old rule 3. (1) read as follows:

36. (1) Before every annual general meeting, the trustees shall cause to be prepared an itemized estimate of the anticipated income and expenses of the body corporate during the ensuing financial year, which estimate shall be laid before the annual general meeting for consideration in terms of rule 56 hereof.

It would seem then that the budget must now be prepared and be in the format that would be submitted to the annual general meeting for consideration prior to the start of the financial year; so where a scheme has a February 2013 financial year end, this would suggest that the budget must be prepared prior to March 2012.

This, read in conjunction with PMR 31(4A), would suggest that the intention is to make certain that trustees are given the tools to ensure that the scheme has the financial resources to run effectively:

31 (4A) After the expiry of a financial year and until they become liable for contributions in respect of the ensuing financial year, owners are liable for contributions in the same amounts and payable in the same instalments as were due and payable by them during the expired financial year: provided that the trustees may, if they consider it necessary and by written notice to the owners, increase the contributions due by the owners by a maximum of 10 per cent to take account of the anticipated increased liabilities of the body corporate. 

Yet another amendment – the insertion of a new rule, PMR 31(2A) – further strengthens this view. The newly inserted rule reads as follows:

31(2A) Where the financial year-end and the annual general meeting of a body corporate do not coincide, the budget shall coincide with the financial year of the scheme.

This may seem obvious, but over time, and to cater for the need to have the budget approved at annual general meetings, a practice started to develop where budget years ran from one month just after the anticipated annual general meeting. Taking our earlier March to February example; if the annual general meeting was planned for June, to be within the four-month requirement, the budget year would become July to June. The above amendment has now made it clear that this approach is wrong.

It has long been a recognised need in sectional title financial practice to have the levies set at the level necessary to meet the operating and financial needs of the body corporate, for the budget year and financial year to be the same and the new levies to be in place from day one. The above now gives effect to this, unless the new levy is more than 10% higher than the previous year’s levy. Even this should be looked at; trustees are elected to run the scheme and have the power of raising special levies – why not the power to set the levy from day one, irrespective of the required increase? The annual general meeting agenda item can still remain and allow the owners a form of oversight where necessary.

The trustees stand in a fiduciary relationship to the body corporate and so their actions must be in the best interest of the scheme. Where this is proved not to be the case, they can be held to account, so the risk to section owners is minimal and the benefit to the scheme great, as the trustees have one of the most important tools to run the scheme effectively.

Article reference: Paddocks Press: Volume 6, Issue 12, Page 2 http://www.paddocks.co.za

Clint Riddin of Clint Riddin & Associates is a sectional title accountant specialised in accounting, income tax and secretarial services to bodies corporate.