02
INDUSTRY NEWS
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outh Africans are becoming attuned to living with one crisis or another. If not electricity black outs, it’s political scandals or the Western Cape drought creating a water shortage catastrophe. The property industry recently averted a potential crisis: stopping two of the biggest property advertising portals from being owned by one company. Instead, insiders worked together to structure an alternative plan that keeps competition alive. On page 17, Private Property’s Simon Bray explains the implications of the most significant deal to affect how local properties will be marketed, bought and sold. Are you aware that big change is on the cards for agents if the Property Practitioners Bill gets passed? The fallout is massive. A new bill will add to agent and agency administrative processes, stretch resources and slow progress. Find out why you should be concerned on page 26. Lastly, new estate agent qualifications could be under pressure if solutions are not found (see page 22). More than ever, this is the time to have your say online at propertyprofessional.co.za and sign up to our e-newsletter by clicking on the newsletter tab.
PROPERTY PRACTITIONERS BILL: POSSIBLE CHAOS IN 2018
14
TOOLS OF THE TRADE
Kim Maxwell PUBLISHED BY THE CREATIVE GROUP 6 Beach Road, Old Castle Brewery, Woodstock 7925 087 828 0423 facebook.com/PropertyProfessional twitter.com/Property_Prof
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ESTATE AGENT QUALIFICATION CHANGES LOOM
17
PRIVATE PROPERTY’S
new digital space deal
The cost per square metre rate: client caution is advised
26 32
Why you add value as a traditional agent
THE CREATIVE GROUP MANAGING DIRECTOR Terence Hewitt terence.hewitt@thecreativegroup.info Editor Kim Maxwell Content business manager Catherine Davis Creative director Leah de Jager Managing editor/Copy editor Michael van Olst Group digital editor Lauren Joubert
ADVERTISING Sales and marketing manager Michèle Jones michele.jones@thecreativegroup.info | 084 246 8105 Advertising, production and subscriptions Jackie Maritz jackie.maritz@thecreativegoup.info Printing Paarl Media | Disclaimer: the publisher of this magazine gives no warranties, guarantees or assurances and makes no representation regarding goods or services advertised within. Information correct at time of printing. © Copyright The Creative Group. All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from the publisher. The publisher is not responsible for unsolicited material.
13/10/2017 05:19
LOCAL NEWS
LOCAL INDUSTRY NEWS SOUTH AFRICAN PROPERTY SECTOR
TECH V CURB APPEAL FOR TENANTS
R5.8-TRILLION
M
odern tenants are just as concerned about technology services such as satellite TV connections, internet accessibility and cellphone reception as they are about rent and the security of the property they are viewing. “In a recent survey by apartments.com to establish which amenities tenants consider most desirable, 61% listed a pre-installed satellite TV connection and 53% listed high-speed internet access. By comparison, only 36% listed air conditioning and 22% listed parking,” says Gerhard Kotzé, MD of the RealNet estate agency group. “This can pose a challenge for landlords whose buildings have bad reception or are in a particular service provider’s ‘dead zone’, because tenants who can’t get a signal are not likely to stay.” Kotzé believes that high data costs in this country mean tenants will want free Wi-Fi or at least a high-speed DSL or fibre connection to enable them to make the best use of their smartphones, tablets, laptops and gaming PCs, or to stream series and movies on their smart-TVs. “The tech-appeal of a rental property is rapidly becoming as important as the curb appeal, and landlords who want to attract more tenants – or retain existing tenants – need to ensure that their properties are sufficiently wired.”
02
R1.3
R3.9
R0.2
R0.5
Commercial
Residential
Public sector
Zoned land
trillion
trillion
trillion
trillion
Retail
R534 billion
Office
R357 billion
State-owned enterprises
Industrial
R281 billion
Hotel/other
R94 billion
R66 billion
Department of Public Works Metros and selected local municipalities billion
R69
R102
billion
Source: Property Sector Charter Council
Local property market valued at R5.8-trillion Research released in 2017 by the Property Sector Charter Council (PSCC) in Johannesburg shows that formal residential property still accounts for nearly three-quarters of property owned in South Africa, and grew from an estimated R3-trillion at the end of 2010 to R3.9-trillion. Undeveloped urban land zoned for development remained unchanged around R520bn (1,1% of total land in South Africa). The public sector contributed a total of R237bn, of which about R102bn is estimated to be in the hands of the Department of Public Works, R66bn held by
South Africa’s 19 largest state-owned enterprises, and R69bn owned by metros and selected local municipalities. The South African property market is currently valued at about R5.8-trillion, up from R4.9 trillion at the end of 2010. This is the first and only research of its kind about the size and shape of the country's property industry. The study underpins the PSCC charter, which seeks to ensure participation of black people to the tune of 25% of the total value associated with the property industry within the next few years.
PROPERTYPROFESSIONAL.CO.ZA
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13/10/2017 05:21
GREAT NEWS FOR THE INDUSTRY!
Exciting new ownership deal for Private Property. Private Property has concluded an exciting new ownership deal with the Real Estate Industry and media giant Caxton, this despite an attempt by their largest competitor to acquire the thriving property portal. “This is good news for everybody. For Private Property, we get to keep doing what we are passionate about, building a great service for property shoppers. For the Industry, it ensures a vibrant competitive environment with at least two big platforms offering advertising services.� Simon Bray, CEO * The deal is subject to regulatory approval.
A home for everyone www.privateproperty.co.za
LOCAL NEWS
Durban developers in strategic partnership NORTHERN SUBURBS PROPERTY SALES SURGE
B
rackenfell’s central location with easy, quick access to the N1 and R300 is contributing to its growing popularity, as seen in a recent residential property sales surge. Rowan Alexander, director of Alexander Swart Property, said that in a short space of time Brackenfell has become a true family suburb in which the ratio of older people and children to young couples and middle-aged residents is far higher than in most Cape Town living areas. The Brackenfell estate agency is expanding into other Cape Town suburbs following the opening of an office in Durbanville, which saw the listing of 24 new properties for sale, of which 10 were sold within the first four months. These, at an average 97% of the asking price. They are continually on the lookout for staff – either experienced agents or rookies prepared to undergo the thorough training period, which the agency insists upon. The agency employs a separate team to find stock, which means that although agents are still encouraged to bring in stock, they will almost always have homes to sell.
04
PROPERTYPROFESSIONAL.CO.ZA
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T
he Multiply Group, developers of Umhlanga Arch, the exclusive R1.3bn residential and commercial project in Umhlanga, have announced a strategic partnership with the Rembrothers Group, responsible for introducing the Old Town Italy restaurant/market/deli concept in KwaZulu-Natal and at a national level. “Umhlanga Arch was created around the core values of creating a live, work and play environment, which are perfectly aligned with our vision and the goal for the Rembrothers Group,” says Umhlanga Arch developer representative Chris du Toit. “We are delighted to confirm the partnership with Umhlanga Arch and look forward to working with the development team to realise this unique vision,” says Rembrothers Group founder Renzo Scribante. The developers say this marks the first stage of the coming together of Durban residential, hospitality, retail and commercial developers.
The Property Professional newsletter offers
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13/10/2017 05:21
“How can you help us realise our vision?” “We’re geared for it.”
In the real estate sector you need a partner with fortitude, experience and know-how to see you through. With our capabilities and deep local sector insights we have innovative solutions to meet your needs. Let us be your partner for wherever your ambition takes you. standardbank.co.za/business
Authorised financial services and registered credit provider (NCRCP15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). Moving Forward is a trademark of The Standard Bank of South Africa Limited. SBSA 230709 – 1/16
WHAT’S ON
All you need to know to stay plugged in to the property industry in South Africa
NOVEMBER
13-17 29
WHAT SAPOA PROPERTY MANAGEMENT PROGRAMME WHERE U niversity of Johannesburg CONTACT bit.ly/2fgLSnM
WHAT IEASA ONE-DAY WORKSHOP WHERE HB Forum Building, Val de Grace, Pretoria CONTACT bit.ly/2w5tHV4
DECEMBER
4 4-6
WHAT EFFECTIVE STAKEHOLDER MANAGEMENT WHERE Enterprises University of Pretoria, Hatfield CONTACT bit.ly/2w4zfzi
WHAT AFRICAN REAL ESTATE & INFRASTUCTURE SUMMIT WHERE The Westin, Cape Town CONTACT bit.ly/2fgmYos
JANUARY
16 19
WHAT IEASA NQF 4 REAL ESTATE WORKSHOP WHERE HB Forum Building, Val de Grace, Pretoria CONTACT bit.ly/2wDEkOz
WHAT NAMA SEMINAR WHERE Summerstrand Hotel, Port Elizabeth CONTACT bit.ly/2f75nvn
Save the date THE SAPOA ANNUAL CONVENTION & PROPERTY EXHIBITION will be held at Durban
International Convention Centre from June 19 to 21 next year. The event provides the chance to network with other property professionals and industry leaders, and listen to speakers including CEOs, economists and analysts. The conference culminates in an awards evening. sapoa.org.za
06
PROPERTYPROFESSIONAL.CO.ZA
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BRIDGET MCNULTY
PROPERTY TREND: THE ONLINE EFFECT
Using social media to sell stock is increasingly gaining traction in the property market
R
ecently, a mother of four sold her house on Facebook. Well, so the headlines read, heralding a new era in house hunting where you can log on to Facebook and buy a house. On closer inspection, Shanty Helim, a British homeowner, sold her house using Facebook Live, showing viewers a 360° tour of her property and inviting them to make offers via Facebook Messenger. On even closer inspection, she used an online estate agent in the UK and insisted that her buyer view the house before concluding the sale. “It’s possible, but unlikely that a house can be sold solely using Facebook,” says Simon Bray, CEO of Private Property. “There are several barriers to selling a home via Facebook only, including the most obvious: buyers aren’t on Facebook to buy property.” Instead, they visit property portals or Sunday newspaper supplements, for instance, because they can find a wide selection of property in one place. “Also, the chances of finding an interested and qualified buyer within their Facebook circle are small,” says Bray. While social media has proven to be an effective way to market a property — individually, through an agent’s Facebook page and through a portal’s Facebook page — trends do not yet point to it becoming the next digital marketplace. That said, if you compare how much digital input there was 10 years ago to today, when it comes to buying property, it will be interesting to see where we are in 2027. Private Property, for example, collates all the properties you might be interested in and offers those options alongside pricing data, property and homeowner advice, affordability calculators and neighbourhood information. Just think of how far imagery has come: still images were once the only option if you wanted to get a feel for a property. Now there’s video, virtual reality tours and detailed floor plans. Concluding the whole property-buying transaction online may still be a stretch, thanks to the manual nature of the deeds office, but it helps you to promote your stock. And where it ends up taking us — especially in South Africa — remains to be seen.
16/10/2017 13:24
LOCAL NEWS
Residential property inflation indices for September 2017
4.1
%
National house price inflation index for August 2017
3 -7 %PLUS 7 %
%
The market has stabilised in this range
Low-value and mid-value wealth segments buck the trend
4 BELOW0% BELOW % High and luxury wealth segments
Luxury inflation
Source: Lightstone Property
U
Ombud says sectional title schemes can rule against Airbnb
ntil recently, opinion was divided about whether it is permissible to let sectional title units via Airbnb in terms of the Sectional Title Schemes Management Act (STSMA), but the Ombud for community housing schemes has resolved the matter, for now. “There is no doubt that Airbnb letting does pose a potential security risk, especially where many owners in a complex are not living there themselves, but letting out their units and giving keys, remotes and security codes to one set of visitors after another,” says national management company Trafalgar's MD Andrew Schaefer. He says insurance companies are also starting to express misgivings about Airbnb letting, especially in complexes where this is widespread. Airbnb letting is regarded by SASRIA as being a commercial activity similar to running a B&B or a hotel, which means that they would have to apply a commercial rate of insurance to any scheme where there was even one Airbnb unit. “Consequently, Trafalgar decided to seek guidance from the Ombud, and the answer is that ST schemes may indeed make a rule that no short-term letting (of less than a month, for example) is allowed. “However, the trustees will need to ensure that the rule is properly approved by owners in the scheme and registered with the Ombud. “In addition, the Ombud says the rule should provide for trustees not to be unreasonable in its application.” NOVEMBER/DECEMBER 2017
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16/10/2017 13:25
LOCAL NEWS
Ask the expert: R roofing pointers
oofing issues are among the first things potential buyers look for when considering a property. Chris Fish of Roof and General Maintenance in Edenvale covers the basics.
CATCH DAMP EARLY
Ceiling insulation and the untreated timber often found inside roofing can absorb smaller leaks, causing unnoticed water damage. An expert can recommend specific treatments and products.
CHOOSE MATERIALS CAREFULLY
Roofing options include sheet metal, asphalt, tiles and plastic polymers, and natural materials such as slate and wood. It is important to consider design, longevity, weight, cost, ecofriendliness and energy efficiency, and to check local building codes. CHECK THE ROOFING REGULARLY
Have the roof inspected every three years. Broken, cracked or shifted tiles, rusted screws and bolts, sun damage, plant growth and leaks can mean a roof is vulnerable to damage.
MODERN SOLUTIONS HELP
Products such as Eco Rubber offer universal roofing solutions. The seamless membrane inhibits rust, assists with insulation, dampens sound, improves security and waterproofs the roof. HAVE CERTIFICATES READY
Waterproofing and roof repair certificates are often necessary when taking out home insurance or a bond. Roofing companies should offer recognised certificates with their work.
4 REAL ESTATE VIDEOS FOR YOUR BRAND As a real estate professional, let The Creative Group help you market your business and listings with video A walk-through of a property mimics the experience of virtual reality. The viewer has a true sense of the property and its layout. Or consider an alternative: an upmarket, high-production video gives the viewer a feel for the home while showcasing the best aspects of the property. It includes drone footage.
SELL YOUR AREA Our suburb videos show off an area and its best amenities, exploring positive aspects
of a community and highlighting good schools. Ideal for marketing your stock to its best potential, these videos will position you as the local expert and instil a sense of trust with your buyers and sellers.
PROPERTYPROFESSIONAL.CO.ZA
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Custom video uses considered editing with development marketing in mind. It includes an interview on the property with a development representative and drone footage.
TELL YOUR BRAND STORY A profile video is a professionally edited interview with a real estate professional. It could be the company CEO, a principal or an agent, and it includes a branch profile. Use it to create strong brand awareness to result in more leads.
THE CREATIVE GROUP can help you to create high-impact, consistent messaging and brand awareness for the right media platforms, with cost efficiencies in mind. All our videos are crafted towards increasing our clients’ sales and bottom line. Chat to us about your requirements: e-mail michele.jones@thecreativegroup.info
08
MARKET YOUR DEVELOPMENTS
Watch this showreel of some of the work we’ve produced for our clients bit.ly/TCG_showreel
IMAGES: iSTOCK BY GETTY IMAGES, SUPPLIED
PROMOTE YOUR PROPERTY
13/10/2017 05:23
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Cape Town office tower in popular precinct
THE RISE OF AN AGENT
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onstruction has begun on 35 Lower Long, Cape Town’s latest office tower. Previously the Ernst & Young offices, the development will be a 24-storey, four-star green building set for completion in Q1 2020. Property developer Abland is a joint venture partner with The Ellerine Brothers. The building area will comprise 13,446m² of premium-grade office space, with 323m² of retail space on the ground floor, nine above-ground parking levels and a penthouse on the top floor. There will be multiple entry points on Lower Long and Jetty Street and a prominent doublevolume entrance space. Abland Cape regional director James Cresswell says the location is ideal: close to a MyCiti bus station and near the main train station. Motorists will have easy access to the N1, N2 and the western seaboard. “In addition, the building is located in the popular foreshore precinct close to the
The Community Schemes Ombud Service (CSOS) is the Regulator and Ombud for all sectional title development schemes, home or property owners’ associations, housing schemes for retired persons, share block companies, and housing cooperatives.
Cape Town International Convention Centre. Amenities such as hotels, restaurants and bars surround the building. The building is being developed in line with tenants’ need for flexible office space and highspeed internet connectivity. Double glazing and the angling of the building away from summer sun will limit heat build-up on glass panels to ensure a comfortable working environment for tenants.
ick Pearson was only 25 when he expanded the Tyson Properties brand from KwaZulu-Natal to Cape Town two years ago. Pearson followed in his father’s real estate footsteps when he was 22, initially in a part-time job. In 2015, he became a managing partner of Tyson Properties. He is still an agent. Under his guidance, the Atlantic Seaboard team has snapped up a 30% market share in Clifton and recently facilitated the most expensive sectional title sale yet. According to Comparative Market Analysis, the property sold for more than R80m. Tyson Properties’ two Cape Town offices brought in sales worth half a billion rand in Q1 2017. “My strategy is to instil a culture that thrives on teamwork rather than on individuals doing huge numbers,” says Pearson. He intends to make large sales in Clifton and Bantry Bay this year. “I am also planning a West Coast office, probably in Blaauwberg,” he says.
of the Sectional Titles Schemes Management Act, 2011 (Act 8 of 2011). The CSOS calls on all executive committees and those in the management of community schemes (as defined by the Act,) to register with the CSOS by 30 March 2018.
Established in terms of the Community Schemes Ombud Service Act, 2011 (Act 9 of 2011) to regulate the conduct of parties within community schemes and to ensure their good governance, the Community scheme registration is free and forms CSOS is also mandated to manage the prescripts can be found on www.csos.org.za
For more information contact Gauteng: 63 Wierda Road East, Sandton | Tel: 010 593 0533 KwaZulu-Natal: 7th Floor Aquasky Towers, 275 Anton Lambede Street, Durban | Tel: 031 001 4215 Western Cape: 8th Floor Constitution House, 124 Adderly Street, Cape Town | Tel: 021 001 2569 PP NovDec_Local_Industry_NewsMV_km.indd 11
16/10/2017 13:26
Get the best home loan deal for your client! Meet Paul... Paul is currently applying for home finance via his own bank. He won’t have a comparative quote and therefore will not be able to compare whether his own bank gave him the best deal. So how does this help Paul? Based on Paul’s profile at his bank, he will probably get a typical finance deal at the current interest rate.
Paul’s Own Bank = One Option!
One Application. All Banks. Best Deal.
Applying with multiple banks ensures that your client gets the best deal and increases his chances of approval. Meet John... BetterBond Home Loans will submit John’s home loan application to multiple banks (including his own), on his behalf. This will drive the banks to compete for his deal. So how does this help John?
1. He could SAVE up to 0.5% on his interest rate!
2. Which means he SAVES up to R240 180 on his R3 million home loan over 20 years! 3. Resulting in a SAVING of up to R1 000 on his monthly instalment!
Multiple Banks = Best Deal!
Let BetterBond help your client get the best deal for their home loan at no cost to them. 0800 007 111 | www.betterbond.co.za
TOOLS OF THE TRADE
5
GOODIES AND GADGETS FOR WHEN YOU’RE ON THE GO HELEN GRANGE
Clear stacks of pamphlets, sets of keys and pens with these simple storage solutions
WEYLANDTS YOU NEED IT BECAUSE The cabinet’s 14 drawers of varying sizes are perfect for organising magazines, envelopes, print cartridges and stationery. THE NITTY GRITTY The Weylandts Fusion Cabinet is a hand-crafted piece made of embossed beaten copper sheeting and bone inlay. THE X-FACTOR The African-inspired piece of furniture fuses function and form in a wonderfully creative way. R25,995; weylandts.co.za
ELEMENT WORKSPACE
KEY HOOKS YOU NEED IT BECAUSE It eases organising multiple sets of keys. THE NITTY GRITTY This is a simple line of six steel hooks with a minimalist design. THE X-FACTOR They’re effective, efficient and affordable. R129; makro.co.za
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YOU NEED IT BECAUSE Your property pamphlets can be stored in such a way that five priority properties are visible at a glance. THE NITTY GRITTY The pamphlet holder has five tilting shelves. Dimensions are 41cm x 41cm x 194cm. THE X-FACTOR It’s neat, simple and gets those leaflets off your desk. R4,716 (silver) or black (R4,312); elementworkspace.co.za
PROPERTYPROFESSIONAL.CO.ZA
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BLUM AMBIA-LINE YOU NEED IT BECAUSE This inner dividing system configures the contents of your drawers to optimise space, allow for a more convenient workflow and improve visibility and accessibility. THE NITTY GRITTY These versatile frames are available in Orion Grey (metal) and Nebraska Oak, in various sizes. They can be arranged in any position, fit any drawer and are slide-proof. THE X-FACTOR The dividers allow you free rein so you can tailor-make your drawer arrangements. R740; eclipsegroup.co.za
IMAGES: SUPPLIED
CARROL BOYES YOU NEED IT BECAUSE It’s easier to declutter your desk with these chic tablet stand and pen holders from prominent local brand Carrol Boyes. THE NITTY GRITTY The Hummingbird stainless steel tablet stand weighs 254g and is 125mm x 110mm x 140mm. The Alicanto pen holder, also stainless steel, weighs 192g, with dimensions of 58mm x 56mm x 95mm. THE X-FACTOR Carrol Boyes is as functional and delightful in the office as it is in the home. R1,100 (tablet stand), R695 (pen holder); carrolboyes.co.za
NOVEMBER/DECEMBER 2017
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EFFECTIVE NEGOTIATION SKILLS ARE KEY
Selling a home is a time-consuming, complicated process that requires patience, experience and good old-fashioned know-how. Sellers and buyers almost never agree on value, which makes a strong negotiator, like a registered estate agent, a necessity.
Another good reason you should use an estate agent
REAL ESTATE BUSINESS OWNERS OF SOUTH AFRICA
www.rebosa.co.za
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THE
PORTAL
PARTNERSHIP
Property industry uncertainty over Naspers’s Property24 takeover of Private Property is finally over. In its place, a fresh vision for a symbiotic relationship between the industry and digital space ANNE SCHAUFFER
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COVER STORY
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alpable energy emanates from Simon Bray, CEO of Private Property, partly because that’s who he is, but also sparked by his exhilaration around the collaborative future of Private Property and its new partners. The past 10 months haven’t been easy for Bray at the negotiating rock face, or for his team facing an uncertain future. The implications of Private Property possibly being owned by largest rival, Naspers’s Property24, weighed heavily on Bray. “It was very difficult to build a case that we weren’t merging the two strongest players in digital property advertising, because we were.” Bray joined Private Property about six years ago, the latter three as CEO. He studied engineering, but knew early on that as a profession, it could never be what he woke up to do every day. “I like to make things, and the cool thing about software is that you are invariably building features and technology solutions to real-world problems … it still has an engineering component but is far more dynamic.” Bray had developed real estate management software with a partner. Private Property liked it, liked Bray, and bought out their company. Bray then headed up the Private Property software development team. “We needed to revamp and overhaul the ageing website and software architecture, so it was an exciting opportunity to tinker and build. Then I fell in love with the business side of it, the broader portal business model.” He became increasingly drawn in by Private Property’s transformation from a “for sale by owner” website to a full-service property portal. NEW DIRECTIONS
As the website transitioned, Private Property identified different directions. Bray is blunt. “It’s very difficult to have agents as customers, or industry as shareholders, if your platform started around a ‘no commission’ concept. “As a portal, to represent the full marketplace for property shoppers, you need a variety of stock coming from different people.” South Africa’s real estate industry was increasingly acknowledging the growing importance of digital technology. “They created a grouping, the Estate Agents Portal Company, with the express aim of playing a role in the digital advertising space around property. They believed it was important for the industry to be involved. And so the conversation began,” he says. Simultaneously, Bray became excited about the 18
It was very difficult to build a case that we weren’t merging the two strongest players in digital property advertising, because we were
Now, as the technology partner to the real estate industry, we can innovate how agents interact with property shoppers, giving them better results and ultimately, help shape a better future for the property market
possibility of a supportive relationship between digital technology and the real estate industry. The property industry had done the hard work. “They’d pulled together, so we were able to talk broadly with them. We had a dialogue about how they could participate in the business, and that culminated in a minority stakeholding in Private Property. For the first 12 months, it proved to be a very successful partnership.” FOR SALE
Then, in late 2016 everything changed. Private Property was still majority controlled by a local group of classifieds, One Africa Media, which included a couple of assets in South Africa – Private Property being one – alongside companies in east and west Africa. “One Africa Media decided to sell Private Property. Their reasons were not related to Private Property but to the group strategy,” says Bray. One Africa Media was merging its assets with a Swiss-based media company and moving forward in Africa. The partnership excluded South Africa. “We were up for sale and the highest bidder in the room was Naspers/ Property24 – our largest competitor,” says Bray matter of factly. “With little involvement from the Private Property board, One Africa Media took the decision to sell to Naspers.” The share purchase agreement was put in place. In November 2016, the Property24/Private Property deal was reported in the media. Bray describes the mood. “While it was flattering that our competitors saw us as such a threat, the takeover bid did trigger a very difficult period. Our new industry stakeholders felt marginalised, and the existing Private Property business began to suffer the effects of being associated with Property24.” The assumption in the industry was that the two portals would be owned by the same parent company, creating an effective monopoly over digital property advertising in South Africa. Bray and Private Property bore the brunt of that negative sentiment, perceived as “the guys who sold out”. NO DEAL
But bring on the twist. “Through the actions of the industry – and inaction of the acquirer – that deal, 10 months down the line, is dead.” Bray praises the role players. “The real estate industry shareholders took One Africa Media to task legally over rights issues around how that deal was structured – the outcome was to pour water on the Property24 deal.
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COVER STORY
Simon Bray takes questions What were possible knock-on effects if the Private Property/Property24 deal had succeeded? When you have an unassailable lead – whether Private Property and Property24 amalgamated or stayed independent – the joint business could have charged whatever they wanted for the advertising services on those platforms. A price increase of 20%-30% would have been minor – there would have been opportunity to ramp up prices aggressively. Another thing. It would have been a missed opportunity to participate in what the digital property marketplace could and should look like. Estate agents effectively become passengers. Whatever that company chooses to do, they are taken along for a ride. As opposed to now, where there’s a great opportunity to participate and build that future vision together.
IMAGES: STEVE MARAIS
What is noteworthy about the industry standing behind a portal? The portal is often independent of
Ultimately it was the successful negotiation of an alternative deal that led to One Africa Media walking away from the Property24 bid. By the end of 2017, Private Property should have new partners. “The deal in place is for a consortium of shareholders, driven by the real estate industry, mortgage origination and Caxton Media. They are the new owners of Private Property, subject to regulatory approval.” “A disaster averted,” says Bray. “Now, as the technology partner to the real estate industry, we can innovate how agents interact with property shoppers, giving them better results and ultimately, help shape a better future for the property market.” Bray is buoyant about this future. “This is good news for everybody. For Private Property, we get to keep doing what we are passionate about. For the industry, it ensures a vibrant competitive environment with at least two big platforms offering advertising services. And the industry now has a genuine stake in the digital marketplace business.” “Our vision is not just to grow a great property marketplace, but to be the enabler of a great property industry. We are talking about a big sector of the economy. If we can improve the transaction flow by even 10% it can have a marked impact on the overall property market and economy. That’s the space we can play in.”
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the industry. In most markets, portals are seen as media, quite separate from the real estate industry that is its clients. It’s unusual for the two to work together. There’s this reliance on one another for what each brings but in most markets they dislike each other – frenemies really. It’s not like that everywhere. With Funda in the Netherlands, for example, the portal has a strong, collaborative business model which works extraordinarily well.
How can digital portals help and not alienate traditional agents? The DNA of this business is technology. What makes a lot of our team tick is innovating around new features. It’s key in a business of this scale, where we’re talking upwards of 400,000 listings, maybe a million enquiries in a month and 3.5-million visits on the platform. The only way to address that scale is through smart technology. There’s a rebirth opportunity for the industry at large. All these other steps the industry has been taking to improve service levels, delivery, even reputation, we can facilitate through technology and direct access to the consumer. Technology can offer agents software, tools and applications that improve their lives and make it easier to deliver the superior levels of service the market has come to expect.
13/10/2017 05:26
Congratulations
Leapfrog Property Group celebrated its 10th Anniversary with a hugely successful national convention at the Tsogo Riverside Sun on the Vaal River, from the 23rd to the 25th of August. Top speakers and entertainers including Danny K and Siphiwe Moyo enthralled the delegates, and everyone had a fantastic evening at the Neon party. Those affiliates who have been with Leapfrog since its launch in 2007 were recognised for their dedication and contribution to the group. The highlight of the convention was the Gala Awards Dinner, where top Leapfrog’s top achieving Agents, Franchisees and Support Staff were honoured. We look forward to Leapfrog’s continued growth and success.
LIGHTHOUSE AWARD WINNERS - This is a new award which recognises the efforts of those offices who operate on their own, without any other Leapfrog offices close by. They are passionate about building the brand and creating awareness of Leapfrog. These offices are fully committed to the Leapfrog values of passion, integrity and fun. They are an invaluable part of our network and vital for national referrals. Winners are: Bethlehem, Polokwane, Durban, Richards Bay and Bloemfontein.
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ICEBREAKER OF THE YEAR Xhasa Kona, Roodepoort
ADMINISTRATOR OF THE YEAR Jenny Kotze, PTA East
LEAPFROGGER OF THE YEAR Sam Harwood, Durban Central
BEST YOUNG OFFICE Richards Bay
TOP COUNTRY AGENT NO. OF SALES Simon Rachomanyane, Vanderbijlpark
TOP RENTAL TEAM & OFFICE BY COMMISSION VALUE Pta East
TOP AGENT BY HIGHEST COMMISSION % Mariechen Grobelaar, Bethlehem
TOP COUNTRY AGENT SALES VALUE Floris De Kock, Polokwane
TOP METRO AGENT NO. OF SALES Paulette Stassen, Durbanville
TOP METRO AGENT SALES VALUE Steven van Rooyen, Milnerton
TOP METRO PARTNERSHIP NO. OF SALES & VALUE Riana Kritzinger & Glynis Terblanche, Pretoria East
TOP COUNTRY OFFICE NO. OF SALES & VALUE COUNTRY FRANCHISE OF THE YEAR Gordon’s Bay
TOP METRO OFFICE NO. OF SALES & VALUE METRO FRANCHISE OF THE YEAR Pretoria East
Could not attend: Odete Dias & Standley Luntz (Leapfrog JHB North East) - Top Metro Partnership by No. of Sales Di Plumridge & Mariette Longland (Leapfrog Langebaan) - Top Country Partnership by No. of Sales & Sales Value. Lizelle Stanley (Leapfrog Table View) - Top Rental Agent by Gross Commission
INSIGHT
AGENTS TRAINING IN
LISTEN UP You’re building a reputation as a new agent and putting in hard graft and training. But word is that the goalposts will possibly/ probably move in 2018, making new qualifications invalid ANNE SCHAUFFER
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ew enjoy writing exams, but for thousands of estate agents countrywide who bite the bullet and achieve relevant qualifications, it’s not only a feather in their caps but a step in the right direction for the property industry. An industry that has worked hard collectively to raise the profile of estate agents and erase any negative perceptions. A key component in that drive has always been a qualification. It ensured that those who chose this sector as a career were given accreditation and professional status. All good and well, but there’s a glitch, the implications of which risk undoing any gains made over the past year or so. As things stand, current estate agent qualifications will no longer be applicable from June 2018. Yet for agents who want to join the profession, plan B hasn’t been formulated … and a qualification is essential for newcomers to practise in the industry. Catch 22? Property industry mouthpiece the Real Estate Business Owners of South Africa (Rebosa) has seconded Howard Markham to head
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an industry team to manage the way forward. Markham, national manager of business development at Pam Golding Properties, says new agents could have an uncertain future. “Professionalisation of the industry has slowly but surely been changing perceptions in the country, where people suddenly realise that becoming a property consultant is actually a career – you have to study and pass a board exam to do it, then the public can entrust you with their single biggest asset, their property.” He explains the complexities of the problem. “The Department of Higher Education and Training (DHET) and the South African Qualifications Authority (SAQA), which fall under the minister, are the overriding government bodies that prescribe to academic institutions what constitutes a particular qualification,” he says. “SAQA provides the framework of the qualification to the institution where you’re studying – university, college, and so on – and allows that institution to confer on you that qualification. SAQA stipulates the criteria for an estate agent’s qualification.”
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Education: two main qualification requirements
Even if we could design a new qualification in the time available to us, when the imminent Property Practitioners Bill is signed into law, we would have to go back to the drawing board Howard Markham, national manager of business development, Pam Golding Properties
For an estate agent to be allowed to sell property on an industrial, commercial or residential basis, she needs an FET certificate in Real Estate NQF Level 4 – also known as an NQF4. For a principal in a franchise – anybody owning a real estate business – the minimum requirement is an NQF5 in real estate. Once that qualification is in hand, a board exam must be written: the Professional Designation Exam (PDE). But there’s an additional interim measure prescribed by the Estate Agents Affairs Board (EEAB). To be a licensed real estate practitioner, you also have to provide the EEAB with a prescribed logbook – essentially your “portfolio of evidence”. An agent will have a number of stipulated activities and projects to complete in the logbook such as getting a mandate, listing a property and so on. This logbook cannot be completed in less than 12 months, effectively putting the barrier to entry to the profession at more than a year. As an agent, only once you have your NQ4 qualification issued by the Services SETA, after a period of prescribed academic study with a Services SETA-accredited training service provider, and your logbook marked and signed off by the EAAB, can you write the board exam. You can then practise as a full-status agent, qualified in real estate. Until that time, and in the lead-up to passing the board exam, you practise as an intern under the mentorship of a full-status agent or principal. They are required to sign off all the activities of your logbook and mentor you along the way. The logbook portfolio of evidence is the route taken for an occupational qualification, rather than an academic one. The focus is as much about practical experience in the field as on writing exams. An occupational rather than academic-only bias makes perfect sense.
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INSIGHT
IMPACT FOR NEW V QUALIFIED AGENTS
National HR development manager at Seeff Properties Ronel Bornman is part of the Rebosa steering committee. “Nobody can ever take your qualification away from you, that’s certain,” she says. “The new qualification may have a different name, and different criteria, but yours will always qualify you as an estate agent. Nobody needs concern themselves about losing their qualification.” “The concern lies with those who wish to join the industry – nobody wants to study for their NQ4 if it may not exist by the time they are ready to qualify.” But why is it taking so long to grant these extensions? “It involves three government departments, and they all have to follow due process,” suggests Bornman. This also begs the question: why is the revision of the qualification taking so long? Markham says the QCTO needs the collaboration of
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the real estate industry because it’s not feasible to prescribe without consultation. Rebosa, as the industry voice, has pulled together an experienced task team to participate in the process of developing new curricula. But all agree that it’s not achievable in the time period. PROGRESS OR U-TURN?
Markham points out another glitch. “Even if we could design a new qualification in the time available to us, when the imminent Property Practitioners Bill is signed into law, we would have to go back to the drawing board. That bill includes a broader scope of practitioners such as the mortgage originators, who would not have been taken into account in the new curricula/qualifications. So there’s little point in starting until that bill is adopted.” Markham says that although the Services SETA is doing its utmost to “fix” the situation – and the Rebosa team is collaborating with it – the industry will take a knock if this situation isn’t resolved soon. “Our industry is taking on interns all the time; we are growing; everybody’s growing. We need more estate agents.” As things stand, the committee is concerned about ending up in a situation where the industry is paralysed and unable “to grow any more nor, very importantly, transform, nor replace those who are retiring”. Dr Shirley Lloyd, director of the National Qualifications Framework (NQF) directorate in the Department of Higher Education and Training (DHET), says that students in current programmes will not be disadvantaged, as there is a phasing out and teach out process and final achievement dates. “All role players are committed to working together to the benefit of the industry, providers and learners. The QCTO, DHET, SAQA and the Department of Tourism have met to discuss the issue of the qualification development and registration on the NQF. The QCTO will be working closely with the various role players to ensure that qualifications and part qualifications are developed and registered by the end of registration date of current qualifications.” There is little else to say but watch this space.
Rebosa has requested an extension to the current estate agent qualifications. The status was pending at the time of printing.
IMAGES: iSTOCK BY GETTY IMAGES
SIMILAR YET DIFFERENT?
Markham outlines what has changed. “A while back, the government decided there was no formal environment for occupational qualifications and so created another organisation named the Quality Council for Trades and Occupations (QCTO). They asked that all occupational qualifications, which currently fall under SAQA, be examined and developed into a fresh set of standards for use in South Africa.” In short, where a curriculum is found to be outdated, to update it. Real estate was among hundreds of affected qualifications. Says Markham: “Real estate is an occupational qualification because there is a conviction, and Rebosa agrees entirely, that you need to get experience in selling real estate before you can earn your licence. In other words, in a perfect world, you get a job in an agency, shadow a qualified agent or principal for a minimum of a year, and that will give you a good grounding to be able to say: I have learnt enough to go on my own.” The concept of rethinking and reworking what an estate agent needs to do to qualify is good. Few would argue that meaningful changes could be made to the curriculum, which would be more useful and appropriate to the skill set required by an estate agent. But Markham says the government – in order to put pressure on the process – decreed that the current SAQA qualification would expire on a certain date. That date is long past. Two extensions were granted, plus another that expires in the middle of 2018.
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AGENTS KNOW HOW TO MARKET YOUR HOME TO SELL
Image is everything when it comes to real estate and a poorly presented property is like showing up at the Oscars in the wrong dress. Objective, expert advice and assistance from a registered estate agent is essential.
Another good reason why you should use an estate agent
REAL ESTATE BUSINESS OWNERS OF SOUTH AFRICA
www.rebosa.co.za
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NEWSWORTHY
It’s totally mad. This clause will make us all criminals, guaranteed Jan le Roux, CEO, Rebosa
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NEWSWORTHY
PROPERTY BILL: WHY YOU SHOULD BE CONCERNED Industry insiders say planned legislation will stifle the industry and drown agencies in red tape
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he Property Practitioners Bill is set to heap new burdens on agents, making it tougher to operate, especially for newcomers. Industry watchers say the bill, which at the time of publication was still to be submitted to the Cabinet for approval, has squandered an opportunity to trim red tape. Agents will have to dedicate more time to compliance, they say. The bill brings a host of other professionals under the same “property practitioners” net as agents, including bond originators and property assessors. Lew Geffen Sotheby’s International Realty southern suburbs co-principal Arnold Maritz says this will be confusing as the bill is “at best ambiguous and at worst extremely disquieting”. It will stretch the resources of the Estate Agents Affairs Board (EAAB), meaning more delays in obtaining fidelity fund certificates, says Durban director of training for Wakefields Estate Agents Lindsay Gartrell. No reliable estimate is available on how many new practitioners will result, but the figure is expected to run into the many thousands. Gartrell has called on the board to “look seriously at whether it has the manpower” to cope. Jan le Roux, chief executive of the Real Estate Business Owners of South Africa (Rebosa), fears dealings with the board will become “infinitely worse”. NEW PRACTITIONERS
Legal adviser to the board Jan Tladi cannot say how many new practitioners will be created. “However, the board is implementing structures and systems to cope with the potential increase.” Tladi says the bill sets out time frames for the issuing of certificates. Disqualified practitioners will be able to appeal to a property ombudsman for relief. The ombud will provide a procedure to appeal against decisions taken by the board, Tladi says. “This includes service-related complaints against the board, for example, and the issuing of fidelity fund certificates.” The high court can review decisions by the ombud. Le Roux is concerned that the bill only mentions lodging a
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MATTHEW HATTINGH
complaint with the ombud “against a property practitioner”. However, Tladi insists this is a “restrictive and narrow” interpretation and not the intention of the law. The bill recommends that the board be replaced by a Property Practitioners Authority, a move chairman of Sotheby’s International Realty Lew Geffen says is “the equivalent of putting lipstick on a sow rather than making a real difference to efficiencies and playing the supportive role”. Geffen says the bill fails to roll back regulations, which “creates an industry entry barrier to 99% of the population, regardless of race or creed”. UNCERTAINTY
There is no certainty when the bill, which replaces the 1976 Estate Agency Affairs Act, will be made law, nor of its final form. It was gazetted for comment on March 31, with public hearings held in the nine provinces in June and July. Tladi says it has been referred to the Office of State Law Adviser for final certification. It will then be sent to the Cabinet for approval and thereafter to Parliament, possibly “around October”. The National Assembly and the National Council of Provinces will debate the bill before the President can sign it into law. Department of Human Settlements spokesman Tuso Zibula has offered no comment on whether the Cabinet or Parliament will have time to deal with the bill this year. Le Roux and other agents have pinned their hopes on lawmakers sending it back to the department for a rethink, particularly provisions which give the new authority wide powers to disqualify agents and agencies from being issued fidelity fund certificates. Grounds for the denial of certificates include being found guilty of unfair discrimination, having no BEE or tax clearance certificates, and being on the national Treasury’s tender defaulter list. Le Roux says the bill requires each of South Africa’s about 35,000 agents to have a BEE certificate – not only the agencies that employ them. However, it fails to specify which certificate.
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NEWSWORTHY
Inspectors will be required to obtain warrants for search and seizure
Jan Tladi, legal adviser, EAAB
TAX CERTIFICATE
Nicole Mullins, a lawyer at the South African Real Estate Academy, says the tax certificate requirement will prejudice agents in legitimate disputes with SARS. The tender defaulter section, too, is problematic because it disqualifies not only the directors of a business, but shareholders, says Mullins. Another area of concern is the sweeping powers granted to inspectors to search premises and seize a wide range of material. Agents are worried about a provision in the bill that allows search and seizure without a warrant, but Tladi confirmed that changes will be made to the bill. “Inspectors will be required to obtain warrants for search and seizure,” he says. However, “random inspections to determine compliance” will be allowed, provided “there are no criminal ramifications”. The bill also bars agents from encouraging clients to use a particular service provider, such as a mortgage originator or a firm of conveyancing attorneys. Commentators say the old act is more reasonable as it forbids agents from encouraging the use of a provider, but adds the rider “without just cause”.
FRANCHISOR LIABILITIES
A further change that has raised concerns is the inclusion of a clause that holds a franchisor liable for contraventions by a franchisee. Mullins said this is likely to change relationships and agreements between the parties. Geffen calls it “totally unacceptable” and completely unfair. “Our head office salary bill would double overnight if we had to play policeman to every franchise,” he says. “Consumeraffected contraventions are exactly why we have paid so much into the board’s fidelity fund for so many years.” Record-keeping is also set to become more demanding as agents will be required to keep documents for 10 years. “SARS says five years. Why do they say 10? And (the bill) says every shred of paper. Every business card. Every mail drop,” says Le Roux. He says the requirement makes it “almost impossible” for new entrants to the industry to comply. “It’s totally mad. This clause will make us all criminals, guaranteed”. Asked to put a rand value to it, Le Roux is at a loss for words. “It’s a cost. It will cost so much just to (answer the question). I don’t know where to start.”
Our head office salary bill would double overnight if we had to play policeman to every franchise Lew Geffen, chairman, Sotheby’s International Realty
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cont actAdr i eBar nar d t el0105930740 cel l0840813747 f r anchi si ng@hui zemar k. com www. hui zemar k. com
AGENT DEVELOPMENT
BUILDING A
PERSONAL BRAND Personal and professional brand A personal brand is really your personal professional brand: the face potential clients see; the personality they come to know. It’s essential to be aligned to a strong property brand, but also to create a recognisable identity within your community through visuals, branding, social media and participation in events. This will keep you front of mind when anyone wants to buy, sell or rent property. “Real estate is all about relationships,” says Private Property CEO Simon Bray. “Buyers and sellers usually make their decision based on their relationship with an individual agent, so it’s important to engage with your community, both online and offline, in an honest, transparent and professional manner. This will stand you in good stead with existing and potential clients.”
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Find more useful training and industry advice on propertyprofessional.co.za – click on Tools of the Trade in the top navbar
A STRONG PERSONAL BRAND DISTINGUISHES YOU FROM OTHER AGENTS AND ENSURES PROSPECTIVE CLIENTS WILL THINK OF YOU FIRST
3 ways to enhance your online brand 1 Fill in your personal profile on Private Property, including a: • Good profile picture. • Personal write-up about what makes you different. • Video interview, so potential clients can get to know you.
2 Present your properties in the best possible way: • Use great images and video walk-through. • Detail property listings with a thorough write-up. • Ensure your listings are up to date — mark your sold properties. • Offer exceptional, personalised service.
3 Publish testimonials from satisfied clients on your personal blog/ website and social media.
Building a personal professional brand 1 Establish a strong online presence More than 90% of buyers begin their property quest online, making it essential to build a strong online presence. Be professional on social media – don’t be controversial or offensive.
2 See every event as a networking opportunity Connect with the community through networking events and by participating in local activities and initiatives. Build strong relationships so you are first in mind when people want to rent, buy or sell.
3 Provide free advice and information Become an expert on property in the area and offer advice via events, social media communities such as suburb groups, and local newspapers.
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LIFE HACKS BERT VAN DEN HEEVER
The true price tag C
lients and contractors involved in the cost comparison and planning process should use the cost per square metre rate, a method of calculating building expenditure, with caution. There are a number of design variables that can adversely affect these rates, thereby creating a false impression of how much a building project actually costs. This can lead to serious problems. You would not compare a Porsche to a Volkswagen based on the cost per square meterage, so why do it with buildings? A generic cost per square metre rate doesn’t give clients the detailed information they need regarding finishes, fittings, services and site development costs. A wide range of building elements also have an impact on price. Instead, elemental estimates provide cost build-ups for elements such as the substructure, ground floor, external facade and roof. This enables quantity surveyors to advise clients on price earlier in the process.
IMAGE: SUPPLIED
UNDERSTAND THE DETAILS
Less than 40% of a building’s cost is the structure itself, so the project is far from complete once the foundation has been laid and the walls and roof are built. Smaller contractors who tender on a cost per square metre basis put themselves and their clients at risk. Clients or their attorneys have approached us on numerous occasions when building
contracts turn sour. Only then do they find that, because there was no detailed breakdown of costs, the project has run into trouble or come to a standstill due to overpayments on structural elements.
HOW DESIGN VARIABLES CAN PLAY A ROLE
The cost per square metre rate is calculated by dividing the net cost of the building (excluding site works and cost of land) by the gross square metres of the building, or Gross Floor Area (GFA). Typically GFA is the total floor area inside the building envelope, including the external walls, but excluding the roof. As a general rule, the simpler the shape of a building, the lower the unit cost will be. But even this can be misleading: a square building of 10m by 10m and a rectangular building of 25m by 4m have the same floor area, but the rectangular building requires 45% more walling. More intricate designs generally result in higher perimeter-to-floor area ratios, increasing excavation, drainage and other construction-related costs significantly.
Why should your clients be wary of the cost per square metre rate? Follow these pointers
Both the client and the architect need to be fully aware of any additional costs or savings that may arise from shape, size, circulation space and other variables in the design of a building. A registered quantity surveyor can help the client achieve a suitable balance between cost, aesthetics and functional aspects.
A registered quantity surveyor can help the client achieve a suitable balance between cost, aesthetics and functional aspects
ACHIEVE A BALANCE
Hiring a registered quantity surveyor early, preferably before an architect draws up the sketch plans, will allow your client to achieve the look, finishes and final touches they want, within budget.
Bert van den Heever is a past president of the Association of South African Quantity Surveyors. He is co-owner of GoLearning, an online professional development training provider to the quantity surveying profession.
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K N OW YO U R WO R T H
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BRUCE SWAIN
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any sellers start out thinking that selling a property will be quick and easy, but soon realise that they need the help of a professional agent. Selling a property can be a daunting task, from pricing it correctly to marketing it and ultimately negotiating the sale’s transaction. Increasing competition from lowcommission, online estate agencies is creating a stronger case for the value offered by a traditional estate agent. This is why you add value:
1 A VALID FIDELITY FUND
CERTIFICATE IS REQUIRED
Agents are legally obliged to have a valid Fidelity Fund Certificate, which they must produce upon request. They also have to be registered with the Estate Agency Affairs Board (EAAB). A seller can check on www.eaab.org. If an agent cannot produce their certificate and is not registered they are practising illegally. Should the seller need to lay a claim of financial fraud, the Fidelity Fund will not be in a position to reimburse them.
2 YOU HAVE EXPERIENCE
It’s important for the seller to ask – an agent who has successfully concluded property sales in the past is more likely to render professional, expert service. That being said, everyone needs to learn and a rookie
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agent can do a fantastic job. However, the seller will need to establish which senior agent will oversee the sale, and their experience and level of involvement.
3 YOU HAVE A MARKETING PLAN
As a professional agent you should provide the seller with a detailed marketing plan, which will include listings on the various property portals, print adverts (where required), brochures and show days.
4 YOU HAVE GOOD AREA KNOWLEDGE
As a successful agent you will be able to reveal what similar properties in the area have sold for and what developments are taking place. Agents can offer proof that they work in the seller’s area, as opposed to just popping in and out with no real ties to the community. Importantly, you should be able to demonstrate properties sold in the area previously.
5 YOU’VE EARNED YOUR COMMISSION
Agents work at risk, meaning they carry the costs of marketing and showing a property, and the time expended, which are only recouped if the property sells and they are paid a commission. If you don’t sell the property the commission goes to someone
Is your potential seller considering using a virtual agent? These crib notes will persuade them how you offer more value
Agents can offer proof that they work in the seller’s area, as opposed to just popping in and out with no real ties to the community
else and your investment goes to waste. An agent’s goal is to negotiate a sale between a willing buyer and seller at a reasonable price. If, as an agent, you can’t even negotiate your own commission, but then opt to discount by as much as 60%, how will you negotiate the best price for a property?
Bruce Swain is CEO of Leapfrog Property Group, South Africa’s first empowered residential real estate group. Swain worked in banking at NBS and Nedcor before entering real estate. He has more than 28 years’ experience in the industry, having worked as regional director for RE/MAX Southern Africa before co-founding Leapfrog in 2007.
IMAGE: SUPPLIED
reasons why a client should make you their agent of choice
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FICA AMENDMENTS NOW IN PLACE: HOW WILL THINGS CHANGE? Over the past few years, consumers as natural persons or entities in South Africa have become used to being “fica-ed” when they enter into certain transactions. We are not alone in this: our financial intelligence laws were promulgated after we became a member of the Financial Action Task Force, an intergovernmental organization established on the initiative of the G7 countries, to develop policies to combat money laundering and terrorist financing. Important amendments to the legislation were passed recently, many of which kicked into effect on 2 October. These were required to ensure that our anti money laundering systems remain on a par with those of most western countries and allow us to transact in and with these countries. The changes are substantial and now require from accountable institutions (which include attorneys, estate agents, financial advisors, banks) to adopt a risk policy when fica-ing their clients. Before, the fica-ing process was basically a tick-box approach where compliance was constituted by collecting certain prescribed details from clients, and reporting certain actions of clients. Now each accountable institution must devise its own unique risk management programme and fica clients accordingly. Where higher risks are identified, enhanced measures are required to manage and mitigate the risks. Simplified measures may be applied where lower risks have been identified.
accountable institution must ascertain the business of the entity as well as the identity of the “beneficial owner”. In a way this is an enquiry to ascertain who are the individual(s) who in fact “pushes the buttons” and ultimately benefits from the transactions entered into by the entity. Further important changes relate to clients who are so-called ”domestic prominent influential persons” or “foreign prominent public officials” as well as their family members and known close associates. Before doing business with such a person, the accountable institution must in addition to other requirements obtain senior management approval to enter into the transaction and establish the client’s source of wealth. So be aware that when you deal with your attorney, estate agent, bank or other accountable institution, it is likely that you will experience some change in the approach to the fica-ing process and, depending on the entity’s risk management programme, may be asked to furnish more information than before. For assistance or queries relating to an aspect of the above, contact us at info@stbb.co.za or on www.stbb.co.za.
Apart from the afore change in approach, newcomers to the legislation include further that where the client is an entity, the
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