About Me

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I am a qualified Attorney. I specialise in Property Law, Commercial Law, Corporate Law and Trusts.
 
Please visit our website at www.prop-law.co.za for more details.
 
I am an elected Committee Member of the Property Committee of the Association of Pretoria Attorneys and through my involvement, I like to ensure that I am constantly at the "sharp-end" of Conveyancing Practice.

I am the elected Chairman on the Gauteng Council of SAPOA. The South African Property Owners Association (SAPOA) is the biggest and most influential institution in the property industry. SAPOA members control about 90% of commercial property in SA, with a combined portfolio in excess of R150 Billion (about $22 Billion). I am also on the National Council and the National Legal Committee of SAPOA.
 
Member of the Institute of Directors South Africa and Member of the Sirdar Governance Panel.

07 October 2013

'Credit amnesty may trip up rich property owners'

'Credit amnesty may trip up rich property owners'


Although the impending credit amnesty is aimed at making it easier for individuals with adverse credit records to obtain finance, lenders are likely to apply even more conservative practices as they have placed huge reliance on credit information from credit bureaus.

Wealthy property owners who have previously struggled to get loans due to their impaired credit files may continue to struggle, even if they have the assets for security, says Gary Palmer, chief executive of Paragon Lending Solutions, a private non-bank lender.

He says the increased risks of not knowing clients' histories could result in delays in obtaining finance from banks and the costs of financing loans may increase to cover the risks.

'The banks have strict lending criteria due to new regulations, such as Basel 3, which have already resulted in delays in loan-approval times. If the new legislation is passed, the banks will tighten up even further to protect themselves, if they are uncertain about a client's capacity to repay a loan.'

He says property owners with impaired credit records may have the assets to secure finance for working capital or for buying property. However, the new amnesty will mean banks will have to scrutinise their credit-granting processes more closely, and do more background research, to ensure that they are approving loans to low-risk clients.

'These additional delays could result in clients missing out on deals, as they may require finance quickly to secure properties or other financial transactions, even though their previous debt obligations have long been settled.'

Palmer says wealthy property owners need to employ strategic resources to get the desired loans and avoid falling into bad debt.

'Private non-bank lenders are usually smaller businesses that have the capacity to determine clients' needs and whether their assets and situation qualify them for loans. Each client's situation is taken into account with the aim of providing access to time-sensitive transactions using their assets as collateral.'

Palmer says the credit amnesty legislation could have a beneficial effect on the economy, if the government creates a process to slowly provide blacklisted and impaired credit consumers with free debt counselling and financial management skills.

Weekend Argus (Sunday Edition)

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