CEO's Message Sept 2017
Category CEO's Message
The month of August has ended with some very good news for the property industry and a huge amount of relief for property owners who have been facing insurmountable municipal debts.
I am sure that you have seen media reports of property owners who have been crippled by massive municipal bills to the point where they have been forced to sell their properties to settle them. Others have spent their savings to settle their bills or invested huge amounts in legal fees to prevent their properties from being attached.
It comes as no surprise, then, that many potential buyers have held back rather than have to face a nasty surprise.
I cannot tell you how relieved I was when I heard about the unanimous decision by the Constitutional Court and the ruling that new owners cannot be held responsible for previous owners’ debts.
As you may be aware, in most municipalities, getting a rates clearance certificate does not necessarily mean that the previous property owner does not owe on water and electricity. Having taken transfer of a property, many buyers have been presented with astronomical bills.
Many have also battled to have basic services connected until past bills have been settled.
This new ruling means no more nasty surprises for our buyers. It explicitly states that previous’ owners debts do not automatically transfer along with the title deeds.
Like others in the property industry, I would like to welcome this as a major victory not only for property owners but also for developers, real estate agents, conveyancing attorneys and banks.
You can now buy your dream property with confidence.
In today’s tough economic climate, meeting the stringent requirements to both secure and service a bond is enough of a burden for households. Having to scrape up the money to pay someone else’s bill is just unthinkable.
The same goes for investors who may be buying to let out properties. Now, inheriting massive municipal bills will not erode the value of the property and erode their return on investment.
As I am sure you will agree, it is always good that, despite the turmoil that we see unfolding in the media on a daily basis, there remains a lot of positives for property. The most reassuring is that, at the end of the day, the rule of law applies.
With this victory under our belts, a continued drop in inflation which could herald further rates cuts and a very tangible urgency to get the economy back on track could mark the turning point for South Africa. I remain optimistic that we are moving back into positive territory and that the property industry could be well on the way to a recovery.
Author: Tyson Properties
