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.

28 February 2014

Unmet deadlines render an agreement of sale void

Unmet deadlines render an agreement of sale void

Property buyers should take care to ensure that they are aware of all dates and deadlines for bank guarantees and bond approvals, because missing such deadlines can result in the agreement of sale being rendered null and void.

'First-time buyers are particularly at risk, as they might not be aware of the seriousness of not meeting suspensive conditions as stipulated in an agreement of sale,' says Mike Greeff, the chief executive of Greeff Properties, an affiliate of Christie's International Real Estate.

Sectional title VAT registration changes welcomed

Sectional title VAT registration changes welcomed

Until now sectional title bodies corporate have been exempt from VAT and home owners' associations have had to register for VAT if their incomes exceeded the VAT threshold amount.

The logic to this is that, in sectional title schemes run by bodies corporate, the aggregated rates, electricity and water accounts are paid on behalf of the owners then recovered from the owners. Imposing VAT on a body corporate, therefore, would mean that a double layer for these amounts is created.

Joburg lacks building inspectors

Joburg lacks building inspectors

The City of Joburg has only 54 building inspectors to monitor illegal building activities and contraventions in the entire city of more than 3 million people.

As a result, people are flagrantly disregarding building by-laws. Within the first five months of the 2013/14 financial year, Joburg spent its entire budget allocated to fight building and planning contraventions, leaving thousands of building and land-use contraventions unprosecuted.

Neighbours call for property developer to be jailed

Neighbours call for property developer to be jailed

Durban's Montpelier Road 'illegal' building saga will be back in court this morning with neighbours asking that the developers be jailed for contempt of court for ignoring an interdict granted last year stopping construction.

'Utterly contemptuous', is how neighbours of the almost completed block of flats in Morningside have described the conduct of the trust that owns the building, arguing that the only appropriate punishment for the trustees is three months behind bars or a R50 000 fine each.

27 February 2014

100,000 Page Views

100,000 PAGE VIEWS



27 February 2014 - Well it's official ... 100,000 people have viewed this Blog.

Please send us your questions if there are any topics that you think we should address.  Please also send us your suggestions, constructive criticism is appreciated.

Thanks to everyone who has taken the time to visit this Blog.

 Cheers
Gareth

Gareth Shepperson
Commercial and Property Attorney










24 February 2014

'Its time to fix your home loan interest rate'

Looks like it's Mortgage Monday, doesn't it???

This is the 3rd mortgage bond related article to start the week and perhaps the most interesting to me.  To fix or not to fix?  If so, when?

At historically low interest rates and all the appearances of entering an upward cycle, perhaps now is the time.  However, you must bear in mind that you will not be able to fix it at the same as the variable rate you will get.  You will typically fix it a couple of percentage points higher.  This means that the interest rate will have to rise by more than 2% (200 basis points in "banker speak") before you derive any financial benefit.  However, you must decide if the peace of mind of knowing exactly how much you will be paying over the next 12 - 60 months or so.

Gareth Shepperson
Commercial and Property Attorney












'Its time to fix your home loan interest rate'

If you recently obtained a home loan for the first time and are in the 'affordable housing' range of up R600 000, you should consider fixing your interest rate. This is the advice of Marius Marais, chief executive of housing finance at First National Bank (FNB).



'Fixing interest rates is one way of creating a more stable monthly cash flow and is ideal for people entering the market for the first time and for those buying in the 'affordable housing' range, which is up to R600 000,' he says.

You must take home loan cover, but you can choose where

It is obviously much easier to just say: "Ag - just include it in the bond".

However, you should weigh up all options because it is a life-long commitment that you are making.

Gareth Shepperson
Commercial and Property Attorney















You must take home loan cover, but you can choose where

When you take out a home loan, the lender has the right to insist that you also take out adequate life assurance and homeowner's insurance. This is to protect both the lender and you, the borrower. But you have the right to choose your insurer.

Many options for structuring your home loan

It is interesting to note that each bank offers small variances with regard to different aspects of the Loan.  It is important for the applicant to determine what is important to them.

Gareth Shepperson
Commercial and Property Attorney















Many options for structuring your home loan

Once your home loan has been approved, you'll be faced with some important decisions, such as choosing the term of the loan, choosing insurance over your life and your property, and deciding whether to opt for a variable or a fixed interest rate. These decisions have major cost implications.

Pieter Prinsloo - CEO, Hyprop

Pieter Prinsloo - CEO, Hyprop



HILTON TARRANT: One of South Africa’s largest listed property companies, Hyprop, reporting results for the six months to December today. Distribution growth of 9.5% reported, taking distributions to 231c. Pieter Prinsloo is chief executive of Hyprop. Pieter, the big one, the Rosebank Mall redevelopment nearly R1bn that you’ve committed to that, that project has been underway for quite some while, is it still on track?

PIETER PRINSLOO: Yes, correct, the development is still on track for completion later this year, the final completion is due in September 2014. Yes, it was always a long project for us, I think it was a two-year project and I must say we’ll be happy when it’s all done.

19 February 2014

Details to incorporate into a lease contract

Details to incorporate into a lease contract



Last week we noted one of the proposed amendments in the Rental Housing Amendment Bill that would significantly change how parties enter into lease contracts.

Verbal agreements don't carry same weight as written contract

Verbal agreements don't carry same weight as written contract



Courts deal with many cases involving written leases where parties lay claim to verbal agreements to enforce certain obligations.

A recent case in point is the Kingswood Golf Estate (Pty) Ltd v Witts-Hewinson & another (223/13) (2013) ZASCA 187 (29 November 2013).

18 February 2014

SHEPPERSON'S FIRST LAW: 100,000 Page Views

Wow! ... nearly there.

Who would ever have believed that my Blog would be viewed 100,000 times?

I really hope that readers have found the content interesting and informative.  There are many of us with a passion for the Property Industry and even some with a passion for the Law.  As more and more statutes affect the Property Industry in South Africa, this Blog that combines Real Estate / Property and the Law can only become more and more relevant to all who operate in various property related fields.  I will endeavour to remain relevant.

There is a Counter at the bottom of the Blog that keeps a record of the page views and I really look forward to seeing it tick over the 100,000 mark.

THANK YOU READERS!


Gareth Shepperson
Commercial and Property Attorney











Pretoria street closures to create traffic chaos


As if it's not bad enough already.

The planning behind this whole project seems to be shambolic.

Gareth Shepperson
Commercial and Property Attorney













Pretoria street closures to create traffic chaos

Chaotic scenes are expected to hit Pretoria city centre from tomorrow morning when vehicular access is restricted due to construction of the A Re Yeng bus rapid transit lanes on sections of Paul Kruger Street.


Paul Kruger street looking north. This street be closed tomorrow for construction of the BRT.

Several roads will be closed due to the construction, and access restricted to workers and tenants who will produce a special permit to be provided by the City of Tshwane.

However, by yesterday there was still no clarity on when the permits would be available, with the city stating that 'all businesses and individuals that will be affected by the road closures have been identified and registered'.

City improvement districts raise alarm over costs

City improvement districts raise alarm over costs

Cape Town city improvement districts say they can't maintain their current levels of cleansing and security duties because of rising costs, and they have appealed to the city to step up its services in key areas.

City improvement districts say they are struggling to cope with current levels of security and cleaning duties because of rising costs

'We are at a critical point where we don't want to tip over to where we can't provide the same level of service,' said Tasso Evangelinos, chief operating officer of the Central City Improvement District (CCID).

The city improvement districts (CIDs), now known as special rating areas, were established to provide top-up services, particularly in cleansing and security, for a designated area.

17 February 2014

Hotel group invests in Durban beachfront properties

I posted this article because it prompted a flashback to my childhood.

At that time the Maharani and Elangeni represented the epitome of luxury in my mind.  I was never fortunate enough to stay there but even driving along the Marine Parade in the back of my parents car (on an exciting day-trip into Durban from our South Coast holiday), I remember looking at them in wonder.

Gareth Shepperson
Commercial and Property Attorney
















Hotel group invests in Durban beachfront properties

Tsogo Sun says the R1.8 billion investment in its entertainment business on Durban's North Beach, announced this week, is an indication of the group's confidence in the city.

Tsogo announced its aggressive expansion programme amid severe consumer weakness in South Africa.

But the group said the move, which will see the massive expansion of Suncoast, ignored negative sentiment.

Strict new by-laws for Joburg swimming pool safety

Why don't we begin the week by skipping straight past the sublime and move directly on to the utterly ridiculous!

I know that pool safety is important BUT ... are you serious?

The burden on the unfortunate individual who is unlucky enough to try and sell property in SA is becoming overwhelming.  You need certificates for EVERYTHING.

Our municipalities don't even have the resources to enforce the most basic of by-laws or attend to filling potholes and having functional traffic lights, how do they propose enforcing this?

Still, I suppose at least they are creating work for whoever is lucky enough to be qualified to issue pool certificates.

The best comment I have seen on this is by Kura Chihota, who said that at least he does not have to worry because he does not have a pool but a fire prevention reservoir.  (Those readers familiar with Nkandla-gate will appreciate this comment.)


Gareth Shepperson
Commercial and Property Attorney















Strict new by-laws for Joburg swimming pool safety

New safety by-laws for residential swimming pools, which could have serious legal implications for homeowners, including a jail term, are about to be approved by the City of Joburg.

14 February 2014

SAPOA raises concern over escalating property rates

More news from my colleagues at SAPOA.  I am very proud of the research, monitoring and oversight currently being performed by our organisation.



It is important that we make every effort possible to identify potential problems at an early stage and engage with the relevant parties (like Municipalities) to overcome difficulties together rather than resort to litigation after the fact (e.g. SAPOA v City of Joburg).  This has been clearly identified within the SAPOA structures and several meetings have been held with Mayors, City Managers and similar decision makers.

Gareth Shepperson
Commercial and Property Attorney
















Sapoa raises concern over escalating property rates

The steep escalation in municipal costs in South Africa has led to the SA Property Owners Association (Sapoa) appointing specialist consultancy Rates Watch to research budgets for the coming year.

New properties still pricey despite increased activity

What is your experience out there in the Market?

Is there any visible improvement?

Gareth Shepperson
Commercial and Property Attorney
















New properties still pricey despite increased activity

The price difference between an average new and existing home narrowed in the fourth quarter of last year but was still stubbornly high despite reports of increased activity in the residential property market.

'Stolen state properties will be seized'

No doubt that it is a monumental task but given the value of land and the government's desire to re-distribute some of it, it is a necessity.  My only question is why it is taking so long.  I know for a fact that some deeds office staff was seconded to assist last year (which caused problems in the deeds registration process).

I really hope that the can of worms in Waterkloof Ridge does not include my home! [joke]


Gareth Shepperson
Commercial and Property Attorney















'Stolen state properties will be seized'

The Department of Public Works is to swoop and seize, without compensation, properties that belong to the state but were misappropriated by officials who have developed and used them for their private gain.

In the second phase of the state's immovable assets audit, the government is looking to identify the private individuals who own 79 percent of the country's land and find the occupiers of missing state land.

Verbal property leases to be phased out

This is an interesting headline because:

1. The commercial property industry is (generally) highly professional and already only uses written leases.

2. In general, those involved in the buy-to-let market already rely on written agreements.

3. We are then dealing with the vast masses of people who let out rooms and shacks in the backyards of townships and informal settlements.  These people do not generally have the capacity to pursue a rental claim through formal structures (Tribunals or Courts) and therefore it is irrelevant whether the lease is oral or written.

Gareth Shepperson
Commercial and Property Attorney















Verbal property leases to be phased out

A lease can be oral (verbal), in writing or a combination of both, i.e. partly written and partly oral.

In the case of a residential lease, if the tenant asks for a written lease, the landlord must reduce the oral lease to writing, but on the same terms and conditions as the oral lease.

11 February 2014

Gautrain access drives office demand

There have been recent reports in the media and in this Blog about the Gautrain (trains and buses) reaching saturation point.  The more businesses that relocate into the vicinity of the stations, the more pressure there will be on the system.

I only hope that the Gautrain operators are capable of scaling-up without the quality scaling-down.

Gareth Shepperson
Commercial and Property Attorney
















Gautrain access drives office demand

Office demand is tracking closer to Gautrain stations across the prime northern nodes of Sandton, Rosebank and Bryanston, as new development and redevelopment projects seek to optimise access to public and private transport options.

Director gets jail for land damage

Director gets jail for land damage

A landmark judgment sentencing a company director to a prison term for breaking environmental laws has raised the pressure on South African corporates to comply with the law.

A court in Limpopo imposed a prison sentence on Matome Maponya, the managing director of Blue Platinum Ventures, on January 31 for causing environmental degradation. It was the first time in South African history such a ruling was made.

Maponya was sentenced to five years, suspended on condition he rehabilitate the damage, estimated at a cost of R6.8 million, within three months.

Townships targeted for shopping malls

It just makes sense to take the product to the people.  What is the saturation rate in suburbs compared to the townships. It's a numbers game.

This applies even more so when you consider the increased cost of transport and its impact on those who can least afford to travel many kilometers to a shopping centre.

Gareth Shepperson
Commercial and Property Attorney
















Townships targeted for shopping malls

South Africa's townships are increasingly being preferred over upper-income suburbs for the development of convenience shopping centres.

Ebony Park in Midrand.

According to developers, city suburbs are increasingly saturated with shopping centres, whereas demand for similar centres in townships is increasing.

10 February 2014

Greg Hopkins - chief investment officer, PSG Asset Management - Special Report

Although I take a keen interest in the stock market, I have no pretences of being an expert.

I know that there is a correlation between Bond rates and the share prices of the Listed Property Sector but I have never made the time to understand why this should be.

I have an understanding of the fundamentals and believe that this should be the primary driver of share prices.  To paraphrase Warren Buffett, that Mr. Market will return to the appropriate level over time.  Human nature (being what it is) means that there is a place for sentiment in the market but that when the sentiment drives the price below what the fundamentals indicate, then it represents a buying opportunity.

Am I being too simplistic? Probably.

It is probably better that I "stick to my knitting", as the saying goes.

Gareth Shepperson
Commercial and Property Attorney
















Greg Hopkins - chief investment officer, PSG Asset Management - Special Report


On Capitec, opportunities, offshore at 11:$ and SAB vs IBM.

- DOWNLOAD THIS INTERVIEW

HILTON TARRANT: Welcome to this Market Commentator weekly podcast, our series of interviews with chief investment officers, fund as well as portfolio managers. We’ll be interviewing them or the institutions they represent once every two months or once a quarter. Our guest this week is Greg Hopkins, chief investment officer of PSG Asset Management. Greg, we spoke with your colleague, Shaun Le Roux, back in November and a little earlier last year. You penned a piece in the PSG Asset Management quarterly newsletter, Angles and Perspectives, it was entitled ‘Simplicity is Often Underrated’ this in the third quarter of last year. Take us through your thinking in that piece, it’s a simple intro, one pager, ahead of some of the commentary that your guys penned in that newsletter.

07 February 2014

SA property market in 'new normal' mode

I have to agree with the article below that the halcyon days of 2005/6 were never normal.  We all know about cycles and a look back at history will show that these cycles are an inescapeable part of the property industry.

My friend Kura Chihota (you may know him from "Ask the Property Experts?" on Business Day TV) posted an excellent look at where we currently stand in grander scheme of things.  I hope that he will not mind but here is what he said:

From my buds over at Lightstone "Total year-on-year national house price growth was recorded at 7.4% at the end of December 2013 which was 0.15% above Lightstone’s optimistic forecast for last year. This was on the back of expected sluggish economic growth of 2%, a CPI rate nearing the 5.8% mark and prime interest rates at 8.5%. Despite the recent surprise interest rate hike of 50 basis points, most economists don’t expect significant changes to the other key drivers and continue to predict CPI to edge closer to the 6% mark and the economy to grow by between 2.5% and 3%."

Gareth Shepperson
Commercial and Property Attorney















SA property market in 'new normal' mode

While the latest interest rate increase may well take some gloss off the process, the South African residential property market will nevertheless continue to settle into a 'new normal' mode that is more realistic and more sustainable,' says estate agent Ronald Ennik.

06 February 2014

11-year battle over panoramic sea views at Concourt

A while ago, I published an article on this topic in Asset Magazine.

You can view the article by clicking HERE.

It will be interesting to hear the conclusions of the Constitutional Court.  However, this specific case seems to revolve around the procedures for approval by the municipality rather than the right to a view.


Gareth Shepperson
Commercial and Property Attorney
















11-year battle over panoramic sea views at Concourt

An 11-year battle between a B&B owner and the Hibiscus Coast municipality over a panoramic sea view on the KwaZulu-Natal South Coast reached the Constitutional Court yesterday.

Trevor Turnbull-Jackson, the owner of the Beachcomber Bay lodge in Shelly Beach, has taken his fight to the highest court in the land after the Pietermaritzburg Hight Court dismissed in 2011 his application to review and set aside the Hibiscus Coast municipality's decision to approve building plans submitted by Pearl Star Investments 14 CC.

Inner-city property deal to regenerate Joburg's East

It is common knowledge that the rapid urban sprawl that has occurred in South Africa over the past 50 years or so can't continue unabated.

It makes no economic sense having people live further and further away from their place of work.  The cost (and waste of time) in transport, the difficulty of creating public transport, the increased costs of conveying infrastructure (water, sanitation, electricity) over distances are all arguments for densification of our cities in South Africa.

Not only have I (FREQUENTLY) made this argument on this Blog but it is also a well recognised fact among the Planning Departments of our municipalities.  A glance at the Spatial Planning of our municipalities confirms this.  The article below deals with inner city housing and one project among many in Joburg.

As part of my work I am required to go to the Deeds Office in the Pretoria city centre several times a week.  The projects there have not been heralded as much as the Joburg projects but a stroll along the streets reveals that a large amount of former office space has been converted into housing.


Gareth Shepperson
Commercial and Property Attorney
















Inner-city property deal to regenerate Joburg's East

The declining eastern part of the Joburg CBD is set for a major boost with the acquisition of two new buildings that will see the extension of the successful Maboneng project.



Two landmark multistorey buildings - Access City and Hallmark Towers - have been bought by Propertuity, developers of Maboneng.

Foreign buyers hedge their bets on Cape Town, buying activity spikes by 50%

It is an interesting Article from Seeff due to the timing of it.  At a time of increasing aversion to the perceived risks of emerging markets (equities and bonds) that it is accompanied by increased property investment in this little emerging economy of ours.

The Rand has taken an absolute hammering against foreign currencies since the statistical period referred to in this article, which presents foreign buyers with even better bargains.  If the Rand remains weak, it will be interesting what the statistics for 2014 reveal.

It's a great time for foreigners to buy in SA.


Gareth Shepperson
Commercial and Property Attorney















Foreign buyers hedge their bets on Cape Town, buying activity spikes by 50%


There has been a notable increase in foreign visitor numbers to the Cape this summer, and property has also seen a significant spike in business.

A view of Cape Town with the V&A Waterfront in the foreground..

'For the first time in years, we have, over the past year seen about a 50% hike in foreign buying activity in these seaside areas compared to 2011/12," says Ian Slot of Seeff. Most of these sales were cash, bringing direct foreign investment, tax revenues and job growth into the country.'

04 February 2014

Minister and banks meet over housing

A nice Photo-Op for all involved.

However, my experience indicates that the Banks are not willing participants in creating housing opportunities for all.  Finance for the property industry is as scarce as hen's teeth.  I find it baffling that all the financial institutions are clambering over one another to issue personal loans (in the Capitec mode), which are backed by nothing more than the hope that high interest rates will compensate for defaults and are simultaneously unwilling to finance something that is backed land, bricks and mortar.


Gareth Shepperson
Commercial and Property Attorney















Minister and banks meet over housing

Human Settlements Minister Connie September held a meeting yesterday with the chief executives of South Africa's major banks to discuss issues related to housing.

Competitive rates boost development'

As the Chairman of SAPOA Gauteng, I am extremely proud of the work that SAPOA does on behalf of the Property Industry.  This includes its research into industry issues and its interaction with all the role players in this industry.  A large portion of this interaction takes place with municipalities.

In the article below, our CEO Mr Neil Gopal gives some details of this interaction.


Gareth Shepperson
Commercial and Property Attorney
















Competitive rates boost development

Efficient towns and cities with competitive rates and taxes stand to benefit from commercial property investment and development, says the South African Property Owners Association (Sapoa).

03 February 2014

Moses Mabhida down but not out, says Durban

I don't know if South Africa enjoyed a lasting bump in tourism but as far as infrastructure is concerned, the FIFA World Cup 2010 seems to have left SA with more problems than significant benefits.

Just consider the whole e-toll disaster.  I must admit that the highways in Gauteng are superb but with the emergence of the e-tolling issues, we are only now understanding the true cost.

As far as the stadiums are concerned, just like the highways, they are magnificent but we are only now understanding the real cost.  The article below deals specifically with the Moses Mabhida Stadium in Durban but similar stories have appeared in the press about the Cape Town Stadium.

Gareth Shepperson
Commercial and Property Attorney















Moses Mabhida down but not out, says Durban

Durban's Moses Mabhida Stadium suffered a record R34.6 million loss last year as the government's World Cup subsidy ended, tenants closed their doors and the iconic 'white elephant' failed to attract new events.

With depreciation, the deficit for 2012/2013 was more than R151m, compared with the R126m loss the previous financial year.

Check legality of property structures before you buy

Whenever purchasing property, it is always prudent to obtain a set of APPROVED building plans.  This is an essential part of any reasonable due diligence.

However, this may prove to be quite a process because the Seller may not have been the owner at the time plans were approved and may not have access to such plans.

Here in Tshwane we have the further problem that a huge number of plans were destroyed in the Munitoria fire and therefore the plans are not even available from the municipality.

Gareth Shepperson
Commercial and Property Attorney















Check legality of property structures before you buy

Until recently there was some uncertainty as to whether the absence of statutory permissions - for example, the failure to obtain statutory approval for the construction of a carport or outbuilding - constituted a latent defect within the scope of the voetstoots clause, or whether the voetstoots clause protected sellers only against defects of a physical nature.

Bond repayments set to keep rising

The table in the article below gives an interesting perspective to the exact practical impact that the rather theoretical 50 basis points will have for property owners.

Gareth Shepperson
Commercial and Property Attorney















Bond repayments set to keep rising

Property owners will have to brace themselves for higher monthly mortgage bond repayments, with analysts forecasting that Wednesday's decision by the Reserve Bank to increase the repo rate by 50 basis points could be the first of several rate hikes this year.