Sunday, 15 April 2007
Landlords Advised to Look after Good Tenants!
By Andre de Villiers - Chas Everitt International
Over the last few years legislation has become far more tenant friendly, indeed many share the opinion that the property owner is being unfairly treated and that the risks associated with renting a property increasing.
Everyone in real estate is aware of cases where problem tenants are taking property owners for as ride. In many instances these ‘tenants’ are nothing but confidence tricksters and outright scam artists. Maybe the public sentiment is not that sympathetic for the property owners at a time that property prices have escalated dramatically but those that are investing in the so called ‘Buy to Let’ market are to a significant degree fuelling the current construction boom that is creating a lot of employment, which in turn is playing a significant part in the economic prosperity our country is enjoying.
But the supply of rental properties is increasing and many tenants have taken advantage of the lowest interest rates for decades to buy properties. In some areas the buy-to-let residential market appears to be saturated and there are substantial numbers of developments nearing completion that will add substantially to the supply. According to agents and real estate developers I have spoken to the number of Buy to Let owners in many developments is over 70% and in one case I was told as high as 90%. A recent report from Jacques du Toit an ABSA economist highlighted this issue.
Du Toit confirms the strong demand for residential property, driven by a rapidly growing middle class, that has caused the development of higher-density residential units to increase strongly over the past five to six years. Together with low interest rates and easily available finance, many new investors have invested in property against the background of the relatively poor performance of some other types of investment.
The property owner is taking a risk and is paying rates and taxes. It is only fair that the law protects their substantial investment and does not encourage those that try to benefit from loopholes and unfair legislation. Even worse there seems to be an increase in ‘professional’ bad tenants who know how the ‘work the system’ and end up staying for months in a property without paying rent before they are evicted.
Property owners with good tenants should appreciate them! The tenant is actually caretaking the owner’s substantial capital asset. It is far better to have a below market rental from a really good tenant than a good rental from a really below average tenant. The risk simply is not worth it. Vacancy factors and the loss of rental income due to a tenant moving due to a high increase in rentals should also be considered. The loss of a month’s rental may really not worth pushing the envelope with that annual rental increase if it’s a good tenant.
Property owners who decide to ‘DIY’ their own rentals are taking an increasing risk and would be well advised to consider using a professional rental service as this can protect a good relationship between the parties. Property evaluations of tenants is increasingly difficult as the law seeks to limit what info may be recorded and made available regarding bad debt and poor payment histories. Rental agencies are able to share information between them, scrutinise and evaluate data obtained (an experienced agent knows how to ‘read between the lines’ in an application that looks good but actually has little substance) and contact genuine references from objective third party sources.
End.
Contact André de Villiers
mailto:andre@cei.co.za
http://www.cei.co.za
http://www.CapeTownProperty.com
http://www.ChasEveritt.co.uk
http://www.ChasEveritt.co.uk
0832300549
Chas Everitt International ©
Sunday, April 15, 2007
Avoid Unpleasant Drama over Property Fixtures
Sunday, 15 April 2007
PRESS RELEASE
Avoid unpleasant drama over fixtures
By Andre de Villiers, (Western Cape Regional Chairman ) Chas Everitt International
Buyers, sellers and agents need to be aware of what is legally included and excluded from their sale.
Most experienced real estate agents have horror stories about "fixtures," which the seller removed but the buyer thought were included in the sale.
To illustrate, I remember buying a house in Newlands and was furious to discover that the seller had replaced a beautiful ornate door knocker with a small cheap version, fortunately, a phone call to the estate agent resolved the problem, the seller sheepishly restored the knocker with the original but not before I threatened everyone with sleepless nights!
Most home buyers and sellers, and even their estate agents, often do not understand the simple law of fixtures.
A "fixture" is moveable personal property, which, by means of bolts, nails, screws, cement, glue, or other attachment method, has been converted to real property. Clearly, that door knocker had been converted from personal property to real property because of its permanent attachment to the structure. Nothing was said in the sales contract about its exclusion from the sale.
A more troublesome example can be window coverings such as blinds and curtains. Suppose a house has beautiful curtains and attached wood window blinds. Those curtains hang by hooks from a rod that is screwed into the wall. While the curtains are personal property because they can be easily removed without damage, the curtain rails and or rods are fixtures included in the home sale. The wood window blinds, if permanently attached to the structure, are also considered fixtures, which are included in the home sale.
But the printed sales contract can change the result. A well written offer to purchase contract should specify or detail such coverings as included in the sales price (unless otherwise excluded).
IF YOU DON'T WANT IT INCLUDED – REMOVE IT
It may be practical for a seller to put a notice on a fixture saying “not included in sale” and thus to clearly exclude it from the sale and this is not commonly done. A better approach for home sellers is to remove the item before marketing the property. Removing the door knocker and installing a tasteful replacement would be a better idea. It is fundamentally unfair and unreasonable to present a property with lovely trimmings only to try strip it bare after the sale and replace quality items with cheaper alternatives.
OFTEN NOT A CLEAR CUT ISSUE
I heard of an instance where a property with built in bar had been sold and the bar stools had been taken by the buyer. This would not normally be an issue but the bar stools were a particular hand-carved design that matched the design of the bar. In the dispute that followed it was resolved that the stools were indeed fixtures as they were an integral part of the bar.
Plants and trees growing in the ground are considered to be fixtures because they are permanently attached to the land, however plants in pots are not considered fixtures and the seller may remove them.
AVOID TROUBLE WITH A WELL-DRAFTED OFFER TO PURCHASE CONTRACT.
When a home buyer identifies non-fixture items, such as pot plants or pool equipment, which the buyer wants included in the sale price, the buyer should itemise that personal property in the sales contract. Similarly, if the seller wants to exclude any fixtures that are attached to the property, those items must also be itemised otherwise they are automatically included in the sale.
Troublesome items to consider include: track lighting, fireplace inserts such as grates, solar systems, built-in appliances, shutters, window coverings, screens, awnings, non fitted carpets, coverings, TV aerials and satellite dish, telephone and wiring, adsl or wireless routers, air conditioners, pool equipment, water purifiers, security systems, keys to all locks, garage door openers and remote controls, mailbox, and even the council garbage bin which we all had to pay R350-00 for!
“RULES” IN A FIXTURE DISPUTE
1. ATTACHMENT. The most important fixture rule is the method of attachment. If the item is permanently attached to the structure, it is legally considered to be a fixture, which is included in the home's sales price.
However, if an item can be removed without damage to the structure, such as curtains, it is not a fixture. Examples include unscrewing light bulbs and unplugging a refrigerator because both are personal property not permanently attached to the building.
The item's weight is immaterial. To illustrate, an aboveground jacuzzi is removable personal property unless it is built in.
2. INTENTION. If the written sales contract cannot be used to obtain clarity the intent of the buyer and seller becomes critical.
The flyer or ad can be valuable here. For example, when the newspaper ad specifies a “private garden with Jacuzzi” that implies the seller intends to include the jacuzzi and the buyer can rely on that statement. Or a description of the “easy to maintain” swimming pool can be interpreted to mean the seller plans to include the pool cover and Kreepy!
3. INTEGRATION TO PROPERTY. When personal property is built into a home, it indicates it has become a fixture, which is included in the sales price. The bar stools I mentioned would serve as a good example here!
4. AGREEMENT. A written contract that lists a specific item, whether it is a fixture or personal property, usually prevails to make it included in the sales price. If in doubt, buyers should list any questionable items.
This is clearly an area where many disputes can easily arise and cause ill feeling. I know of many incidents where properties that have been sold for a great deal of money turn into an unpleasant drama over relatively inexpensive fixtures. People can be unbelievably unreasonable, so be warned – make every effort to be clear in writing!
End.
PRESS RELEASE
Avoid unpleasant drama over fixtures
By Andre de Villiers, (Western Cape Regional Chairman ) Chas Everitt International
Buyers, sellers and agents need to be aware of what is legally included and excluded from their sale.
Most experienced real estate agents have horror stories about "fixtures," which the seller removed but the buyer thought were included in the sale.
To illustrate, I remember buying a house in Newlands and was furious to discover that the seller had replaced a beautiful ornate door knocker with a small cheap version, fortunately, a phone call to the estate agent resolved the problem, the seller sheepishly restored the knocker with the original but not before I threatened everyone with sleepless nights!
Most home buyers and sellers, and even their estate agents, often do not understand the simple law of fixtures.
A "fixture" is moveable personal property, which, by means of bolts, nails, screws, cement, glue, or other attachment method, has been converted to real property. Clearly, that door knocker had been converted from personal property to real property because of its permanent attachment to the structure. Nothing was said in the sales contract about its exclusion from the sale.
A more troublesome example can be window coverings such as blinds and curtains. Suppose a house has beautiful curtains and attached wood window blinds. Those curtains hang by hooks from a rod that is screwed into the wall. While the curtains are personal property because they can be easily removed without damage, the curtain rails and or rods are fixtures included in the home sale. The wood window blinds, if permanently attached to the structure, are also considered fixtures, which are included in the home sale.
But the printed sales contract can change the result. A well written offer to purchase contract should specify or detail such coverings as included in the sales price (unless otherwise excluded).
IF YOU DON'T WANT IT INCLUDED – REMOVE IT
It may be practical for a seller to put a notice on a fixture saying “not included in sale” and thus to clearly exclude it from the sale and this is not commonly done. A better approach for home sellers is to remove the item before marketing the property. Removing the door knocker and installing a tasteful replacement would be a better idea. It is fundamentally unfair and unreasonable to present a property with lovely trimmings only to try strip it bare after the sale and replace quality items with cheaper alternatives.
OFTEN NOT A CLEAR CUT ISSUE
I heard of an instance where a property with built in bar had been sold and the bar stools had been taken by the buyer. This would not normally be an issue but the bar stools were a particular hand-carved design that matched the design of the bar. In the dispute that followed it was resolved that the stools were indeed fixtures as they were an integral part of the bar.
Plants and trees growing in the ground are considered to be fixtures because they are permanently attached to the land, however plants in pots are not considered fixtures and the seller may remove them.
AVOID TROUBLE WITH A WELL-DRAFTED OFFER TO PURCHASE CONTRACT.
When a home buyer identifies non-fixture items, such as pot plants or pool equipment, which the buyer wants included in the sale price, the buyer should itemise that personal property in the sales contract. Similarly, if the seller wants to exclude any fixtures that are attached to the property, those items must also be itemised otherwise they are automatically included in the sale.
Troublesome items to consider include: track lighting, fireplace inserts such as grates, solar systems, built-in appliances, shutters, window coverings, screens, awnings, non fitted carpets, coverings, TV aerials and satellite dish, telephone and wiring, adsl or wireless routers, air conditioners, pool equipment, water purifiers, security systems, keys to all locks, garage door openers and remote controls, mailbox, and even the council garbage bin which we all had to pay R350-00 for!
“RULES” IN A FIXTURE DISPUTE
1. ATTACHMENT. The most important fixture rule is the method of attachment. If the item is permanently attached to the structure, it is legally considered to be a fixture, which is included in the home's sales price.
However, if an item can be removed without damage to the structure, such as curtains, it is not a fixture. Examples include unscrewing light bulbs and unplugging a refrigerator because both are personal property not permanently attached to the building.
The item's weight is immaterial. To illustrate, an aboveground jacuzzi is removable personal property unless it is built in.
2. INTENTION. If the written sales contract cannot be used to obtain clarity the intent of the buyer and seller becomes critical.
The flyer or ad can be valuable here. For example, when the newspaper ad specifies a “private garden with Jacuzzi” that implies the seller intends to include the jacuzzi and the buyer can rely on that statement. Or a description of the “easy to maintain” swimming pool can be interpreted to mean the seller plans to include the pool cover and Kreepy!
3. INTEGRATION TO PROPERTY. When personal property is built into a home, it indicates it has become a fixture, which is included in the sales price. The bar stools I mentioned would serve as a good example here!
4. AGREEMENT. A written contract that lists a specific item, whether it is a fixture or personal property, usually prevails to make it included in the sales price. If in doubt, buyers should list any questionable items.
This is clearly an area where many disputes can easily arise and cause ill feeling. I know of many incidents where properties that have been sold for a great deal of money turn into an unpleasant drama over relatively inexpensive fixtures. People can be unbelievably unreasonable, so be warned – make every effort to be clear in writing!
End.
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