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PROPERTY
SOUTH AFRICAN
PROPERTY REVIEW - LogoTreatment.pdf 1 2016/08/25 11:31 AM
February/March 2020
REVIEW The voice for the industry
Western Cape
Overview
A hub for prosperity
PROPreneurX
Property Entrepreneur
Accelerator Programme
Inclusionary Housing
A regulatory perspective
LED
Rethinking economic
development in cities
legal update EXCELLENT QUALITY IS PRICELESS We Make it Worth Every Cent Through innovation and class-leading resources, our Facility Management team will implement strategies and play an integrative role by reducing costs and adding value. +27 11 911 8000 2 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 www.cbreexcellerate.com
from the CEO
Registration for the
2020 SAPOA Convention and
Property Networking is Now Open
I am very excited about this annual property event of the year, which brings with it
some many eagerly awaited enhancements. The most notable is the inclusion of
Nicole Baumgarten as the new committee chair. Bringing with her a wealth of
marketing experience, fresh ideas and new perspective, she has already been
a huge asset to the committee.
A
A
fter a hiatus of seven years, the
property event of the year returns to
the internationally acclaimed Sun
City in the North-West Province. The recently
renovated Resort is unlike anything in the
equally challenging. Today, we are still
feeling the effects of several years of
corruption, the erosion of important public
institutions and the resultant policy malaise.
The property sector has felt the effects at an
world, offering mountain views, a key alarming rate in the form of a weakening
national park and an iconic golf course all economy, decreasing investor confidence,
under one roof. rising municipal costs, water and electricity
In addition to this, the property crises, high tenant vacancies and the like.
conference will now commence on But, even in the face of such great challenges,
Wednesday afternoon, and will conclude on hope continues to spring eternal in the
Friday midday. The committee has hearts of South Africans who are determined
negotiated special accommodation rates that they will not yield to despair, to
allowing you the option of taking a little undertake the detailed work required to
extra time with your family over the turn our tomorrow around. The industry
weekend to enjoy the spectacular views looks to the leaders for answers on what is
and unique beauty and activities that the in store for the property sector, exploring
SAPOA CEO, Neil Gopal Resort has to offer. the opportunities, disruptors and
You will note that the name has been technology heading our way.
revised from a property exhibition to a The Convention’s programme addresses
property networking. We are proud to these and other issues to ensure that the
announce the introduction of networking sector continues to inspire further
lounges, a more cost-effective way development and productivity through
to connect, chat with friends, colleagues achieving specific outcomes.
and new connects and to network Highlights of the event include keynote
and have meetings to maximise addresses by various local and international
business opportunities. speakers, golf at the 18-hole desert-style
The theme of the 2020 Convention is Lost City Golf Course, the Pilanesberg
#Tomorrow. Over the last decade, our National Park Game Drive, a themed
economy has barely grown, investment has Convention dinner on Thursday evening,
dwindled, and the rate of unemployment ending off with a Women’s Luncheon on
has increased. The past year has been Friday afternoon.
SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 3
from the CEO legal update contents
As part of the Convention, the SAPOA
executive and sponsors, Attacq, Dipula Income
Fund, Eris Property Group, Excellerate,
Growthpoint Properties, Liberty Two Degrees,
Pareto, Remote Metering Solutions and
Resilient, are delighted to bring together a
host of industry stakeholders ranging from
owners and managers of commercial property
to stakeholders who provide the sector
3
with support functions, such as members of
the media. I am grateful to these listed-
sector organisations for their financial
support in making this conference From the CEO
a success. Registration for the
Stakeholders will be recognised and 2020 SAPOA Convention
awarded through the annual SAPOA Property Editor in Chief Neil Gopal and Property Networking
Development Awards for Innovative Editorial Adviser Jane Padayachee is Now Open
Excellence and the SAPOA Journalism Awards Editor Mark Pettipher
for Excellence. These awards recognise Copy Editor Ania Rokita Taylor
excellence and the role played by winners, in Public Relations Officer Maud Nale
elevating the South African commercial Production Manager Dalene van Niekerk
property sector to exceptional status through Designer Fanie van Niekerk
their contribution. Sales Pieter Schoeman: pieter@mpdps.com
The 2020 SAPOA Annual Convention & Finance Susan du Toit
Property Networking, aims to empower Contributors Ben Strauss,Justine Krige and
stakeholders with novel points of view to Georgia Speechly, Marcelle Johnson, Shaheen
consider in their upcoming projects, and a host Adams, Wesgro, Nicole Chamberlin, David
Steynberg, Maud Nale, JLL, South African
of new acquaintances to do business with or Cities Network, Juan Carlos, Tshepo Tshabalala
merely form long-lasting business relationships
based on a mutual commitment to improving FOR EDITORIAL ENQUIRIES email
our country’s commercial property landscape.
It promises to remain true to its history of
mark@mpdps.com
Published by SAPOA, Paddock View, Hunt’s End
22
encouraging engaging conversation and
Office Park, 36 Wierda Road West, Wierda Valley, Industry Overview
deliberation on issues of pertinence within the
Sandton Amdec Group expands its
commercial property sector.
PO Box 78544, Sandton 2146 Western Cape
Registration opened a little later than usual,
t: +27 (0)11 883 0679 f: +27 (0)11 883 0684 property portfolio
but this allowed us enough time to finalise
and showcase all the social activities and
ensured that you can now register to attend
the conference and social events, all at once.
Please visit www.sapoa.org.za/convention
We look forward to hosting you. PROPreneurX Launch
Property Entrepreneur Accelerator
Best regards, Programme launched
Neil Gopal, CEO 30
Designed, written and produced
for SAPOA by MPDPS (PTY) Ltd
e: mark@mpdps.com
4 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020
contents legal update
PROPERTY
SOUTH AFRICAN
1
REVIEW
ON THE COVER
When people think of the Western Cape
one immediately thinks of Cape Town –
the Mother City – but the Western Cape has so
much more to offer 2
Cover Story —»»»
FEATURED STORIES
16 Western Cape Overview Western Cape, a hub for economic growth
52
Off the wall On your bike or is it in your bike?
3 4
1 BCX Head Office. Architects: SVA International
2 Akwa Hotel. Architects: SAOTA
GENERAL STORIES 3 Menlyn Learning Hub. Architects: Boogertman + Partners
4 West Hills Mall in Ghana. Architects: ARC Architects
3 From the CEO
6 From the Editor’s desk
8
Legal update
➀ Lease renewal clauses: Landlords and tenants beware
➁ The Property Practitioners Act: What is it all about?
Leaders in Quantity
➂ Changes to the Procedure to be followed to obtain Surveying and
certified copies of Deeds effective from 8 January 2020 Property Valuation
14
Inclusionary Housing The regulatory prespective for
OUR SERVICES:
a secondary market system • Quantity Surveying
• Management
26
Western Cape Seminar First URERU Seminar of 2020
• Dispute Resolution
28
Entrepreneur one on one Driving environmental standards • Property Valuation
36 Insight 5 big questions real estate will be asking in 2020
Associated offices:
38 Rethinking LED LED in intermediate cities BOTSWANA | GHANA | KENYA |
MAURITIUS | NAMIBIA | NIGERIA |
50 Howmuch.net Importance of Services in the World's Economy TANZANIA | UGANDA
DISCLAIMER: Johannesburg: +27 (11) 642 8751
The publisher and editor of this magazine give no warranties, guarantees or assurances and make no representations regarding Pretoria: +27 (12) 460 3304
any goods or services advertised within this edition.
Copyright South African Property Owners’ Association (SAPOA). WWW.DELQS.CO.ZA
All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from SAPOA.
The publishers are not responsible for any unsolicited material.
SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 5
editor's desk
Welcome to our first edition of 2020
Having gone bi-monthly, our main theme for each edition will now be based
on regional overviews. So, without further ado, we begin with the Western Cape
F
rom a regional perspective, I spoke of attending the launch of Wesgro’s report
to SAPOA Western Cape committee on the province, and would like to extend
member Lara Schenk about the my thanks to Tim Harris for allowing me
exciting things they have planned to to extract some of the report’s salient
entice SAPOA’s Western Cape members points for the magazine. It’s interesting
to network and be better informed to note that the residential areas around
about some of the trends and topical Somerset West are fast becoming highly
subjects within the commercial sought-after – and more expensive as a
property industry. result. In terms of industrial development,
“While the plans are still a work the area behind Bellville, near Stellenbosch,
in progress, we are putting together has been making great strides, and seemingly
ideas to express a 2020 vision with a can’t keep up with demand. The extracted
series of forward-looking seminars and article, which links to the full Wesgro report,
networking events,” she says. ties in with what Dave Russell of Baker Street
In this spirit, we kicked off 2020 with Properties outlined in the URERU seminar.
more than 110 SAPOA members, property In an entrepreneur-development story,
practitioners and students attending the the exciting PROPreneurX programme, a
first Urban Real Estate Research Unit property entrepreneur accelerator initiative
(URERU) seminar of the year, sponsored designed to provide the support needed to
Editor and Publisher Mark Pettipher by Quoin Online. François Viruly focused grow a business, gain visibility and traction
on the property industry’s international for business growth, and access advice from
trends in the commercial sector, while mentors on matters related to taking the
Dave Russell, a veteran of the industry for business to the next level.
more than 37 years (and a SAPOA member Going forward, we will be encouraging
for 17 years) followed with an overview of new voices to contribute to the magazine
the state of affairs in Cape Town, drawn – and thanks to Shaheen Adams, in this
from seven commercial property nodes. issue we have a great article on inclusionary
Schenk has also told us about the housing, a topic close to SAPOA’s heart.
planned post-Budget breakfast on 25 Thanks also goes to Cliffe Dekker Hofmeyr
February; a session with author Crispian and Norton Rose Fulbright for allowing us
Olver, who published A House Divided, on to republish some of their topical material.
the topic of “paving the way forward”; Property Point has once again supported
plans to take a more thorough look at the magazine by facilitating a one-on-
the Property Practitioners Bill in a seminar one interview with an entrepreneur in
titled “Property Practitioners of the Future”; the wider property sphere. In this issue,
an examination of the Western Cape’s we feature Munyadziwa Rikhotso of Nsovo
transportation woes in a session titled “A Environmental Consulting.
Route to Growth”; and a seminar on tall I hope that this month’s read will keep
buildings, “Taking You to New Heights”. you riveted – and I look forward to visiting
I, for one, am looking forward to attending each region to gain a deeper insight into
all of these, and giving you feedback. the issues of the day. If there’s a specific
As this is a Western Cape-focused issue regional topic that’s important to you,
of Property Review, I had the good fortune please get in touch at mark@mpdps.com.
6 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY / MARCH 2020
howmuch.net
SPARKLE AT THE
ANNUAL SAPOA
CONVENTION DINNER
2020
A LITTLE GLITTER NEVER HURT.
BRING YOUR SPARKLE
DATE: 04TH JUNE 2020
TIME: 19H00 – 19H30
VENUE: SUN PARK, SUN CITY
TO REGISTER GO TO
www.sapoa.org.za/convention/registration/delegate-registration
YOUR HOST
SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 7
legal update
Lease renewal clauses:
Landlords and tenants beware
The drafting of renewal clauses in leases continues to cause problems
for landlords and tenants
By Ben Strauss, Director at Cliffe Dekker Hofmeyr
SS
uch a clause was again the subject The lease also contained
matter of a recent case in the an arbitration clause
Supreme Court of Appeal (SCA), The tenant validly exercised the option
Shepherd Real Estate Investments (Pty) during the initial term, and the lease was
Ltd v Roux Le Roux Motors CC (1318/2018) renewed for a further five-year term.
[2019] ZASCA 178 (2 December 2019). However, when the tenant tried to
The facts of the case were that the exercise the second option to renew for a
parties had entered into a lease in relation third five-year term, the landlord said that it
to petrol station premises in Paarl. The was amenable to the proposed renewal at
lease started on 1 December 2007 and an agreed rental of R150 000 per month,
was to endure for an initial term of five plus value-added tax. In response, the tenant
years, with a renewal period of “5 plus contended that a fair rental was an 8% per
5 years”. year escalation on the then-prevailing rental.
Ben Strauss is a Director in CDH’s The rental at commencement The tenant also proposed that the
Tax and Exchange Control and was R18 000 per month, matter be referred to arbitration.
Corporate and Commercial practice escalating at 8% per The landlord rejected that
areas. He focuses on corporate tax, year over the initial “[A]lthough the position in relation contention and proposal,
capital transfer taxes, corporate term. As to the clause to ‘agreements to negotiate in good and proceeded with an
restructuring, exchange control, dealing with the faith’ remains a complex one in Australia application to evict the
employee incentive schemes, public determination of the in the light of Coal Cliff Collieries, courts tenant as it considered
benefit organisations, venture terms that would there, like other comparable jurisdictions, the lease to have
capital, commercial real estate and apply on renewal of will not enforce ‘an agreement to expired due to the
general commercial work, including the lease agreement,
agree’. That accords as well with effluxion of time.
the position in our law.”
mid-tier mergers and acquisitions. it is worthwhile quoting The landlord argued
His clients range from start-ups to the relevant text as that the rental amount for
multinational companies across provisions along the same the renewal period was neither
a variety of sectors, including lines are contained in many leases: determined nor determinable; that
information technology, mining “[The] renewal for the second lease the relevant provision of the renewal clause
and minerals, oil and gas, financial renewal period shall be on terms and was“an agreement to agree”and, accordingly,
services and private equity. conditions in compliance with the was void for vagueness; and that there was
e: ben.strauss@cdhlegal.com Landlord’s then-standard letting policy, no obligation on the parties to negotiate in
t: +27 (0)21 405 6063 except that there shall be no right of further good faith or to reach an agreement on a
f: +27 (0)21 481 5204 renewal and that the rental and costs shall rental amount that is objectively reasonable.
be mutually agreed upon in writing The tenant argued that the renewal
between the Landlord and the Tenant provision did not reflect the intention of
when the right of renewal is exercised.” the parties and that the provision should
8 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020
legal update
be rectified to reflect the correct intention For example, in the alternative arrangement, the parties could include
or, alternatively, that there was a tacit term a provision along the following lines:
in the lease agreement that the rental “The monthly rental payable during the renewal period shall be a
would be reasonable rental which could market-related rental escalating at a market-related rate as agreed
be established and determined objectively. in writing between the parties, failing which agreement, the rental and
The tenant also contended that the parties rate determined by an independent expert who shall be appointed by
had agreed to arbitration. written agreement between the parties and, failing which agreement,
The High Court dismissed the landlord’s by [some determined qualified person, e.g. a named registered valuer].
application. The landlord appealed to the The independent expert shall act as an expert and not as an arbitrator,
SCA. The SCA ruled in favour of the landlord and his or her decision shall be final and binding on the parties.
and upheld the appeal. “If the rental and rate has not been determined by the start of the
Judge Ponnan considered the essential renewal period then the following rental shall be paid until such time
legal propositions in cases such as these on as the new rental and rate has been finally determined, when suitable
the basis of the judgments in South African, adjustments in rental shall be made with retrospective effect: the rental
English and Australian court cases. The judge payable in respect of the month immediately prior to the termination date
concluded as follows at pages 11 and 12 of escalated by [X]%, and thereafter escalating annually on each anniversary
the ruling: of the start date of the renewal period at a rate of [X]% per year.”
“[A]lthough the position in relation to
‘agreements to negotiate in good faith’ that, because the lease agreement had
remains a complex one in Australia in the terminated by effluxion of time, the tenant
light of Coal Cliff Collieries, courts there, could in any event no longer invoke the
like other comparable jurisdictions, will arbitration clause.
not enforce ‘an agreement to agree’. That The court made short shrift of the
accords as well with the position in our law.” tenant’s arguments for the rectification
of the provisions or the introduction of
Judge Ponnan proceeded as follows a tacit term. As to the former, the judge
at page 12 of his judgment: found that the tenant’s obligations were
The proper approach in an enquiry far-fetched or untenable and, essentially,
such as the present depends upon the that the tenant had only itself to blame
construction of the particular agreement. for signing an unfavourable contract. As
Accordingly, it becomes necessary to to the introduction of a tacit term, it was CORPORATE & COMMERCIAL
15 JANUARY 2020
analyse the relevant paragraph to decide essentially held that the parties had applied CORPORATE &
COMMERCIAL
whether its proper characterisation is their minds to the lease agreement and had ALERT
merely an agreement to agree or expressly agreed on the terms of
whether it contained legally the renewal clause, and that,
enforceable obligations. [The] renewal for the second accordingly, there was no IN THIS
ISSUE
Lease renewal clauses: Landlords and tenants
beware
The court essentially lease renewal period shall be on scope for introducing a Should regulated companies approach the TRP
for share buy-backs of more than 5%?
held (at page 13) that terms and conditions in compliance tacit term. The Property Practitioners Act:
What is it all about?
the renewal clause was with the Landlord’s then-standard letting What the judgment
too “illusory or too policy, except that there shall be no right highlights is that it CLICK HERE
of further renewal and that the rental and
For more insight into
vague and uncertain to is absolutely critical
1 | CORPORATE & COMMERCIAL ALERT 15 January 2020 our expertise and
services
be enforceable “. costs shall be mutually agreed upon that renewal clauses
As to the notion that
in writing between the Landlord in leases be drafted
and the Tenant when the right cliffedekkerhofmeyr.com
the matter should have with great care. The
of renewal is exercised.
been referred to an arbitrator, parties must either provide
the court found that an arbitrator for an agreed and fixed
Ben Strauss
“could not give effect to arrangements amount of rental that will apply on
that the parties themselves had not renewal or, alternatively, if they do leave
concluded and then require the party, the rental to be determined at the time
who is resisting, to continue with the of the renewal, they should provide for
ongoing relationship”. The court also held a deadlock-breaking mechanism.
SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 9
legal update
The Property Practitioners Act:
What is it all about?
The President has recently signed into the law the Property Practitioners
Act 22 of 2019 (the Act). The date of commencement of the Act is still to be
determined. However, those in the property industry ought to start getting
to grips with the provisions of the Act as soon as possible
By Justine Krige and Georgia Speechly, Cliffe Dekker Hofmeyr
TT
he Act has repealed the Estate Agency Affairs Act 112 Thus the definition (and, therefore, the application of
of 1976 (EAA Act) in its entirety. It did so to achieve the Act) extends well beyond estate agents. It notionally
three primary objectives: also includes auctioneers, property developers, property
1. Address the slow transformation managers, franchisees, providers of bridging finance and
in the property sector; bond brokers (aside from financial institutions) and, for the
2. Integrate and consolidate all role-players purposes of certain provisions, all directors, trustees and/or
within the property sector under a single employees of property practitioners.
umbrella statute; and Anyone who falls within the ambit of the definition of
3. Address the deficiencies in what has been a “property practitioner” is required under the Act to obtain
a largely ineffective system of monitoring a certificate issued by the Fidelity Fund on an annual basis.
estate agency matters, and protecting Without a valid certificate, a property practitioner may not
consumers and their trust funds. render services or receive fees. In fact, conveyancers are
prohibited from paying any money to a property practitioner
Who is a “Property Practitioner”? without receiving a copy of that property practitioner’s valid
In order to achieve its objectives, the Act uses the phrase Fidelity Fund certificate.
“property practitioner”, which is much broader than an The Fidelity Fund’s primary purpose is to reimburse persons
“estate agent” under the EAA Act. A property practitioner who suffer pecuniary loss by virtue of:
is any person who, for the acquisition of gain, directly or 1. Theft of trust money by property practitioners; or
indirectly, on the instructions or on behalf of another: 2. Failure by property practitioners to comply with the
1. Sells, purchases, manages or publicly exhibits provisions of the Act requiring a separate trust account
for sale any property or business undertaking; and proper accounting records.
2. Leases or hires or publicly exhibits for hire any
property or business undertaking; Property practitioners are also required to maintain
3. Collects or receives money payable for a lease; indemnity insurance (to the extent required by the
4. Provides, procures, facilitates, secures or otherwise Minister of Human Settlements); comply with a property
obtains or markets financing for or in connection practitioners’ code of conduct (to be prescribed by the
with the management, sale or lease of a property Minister of Human Settlements); and to provide certain
or business undertaking; and/or mandatory disclosures to potential purchasers and lessees.
5. Renders services as an intermediary to effect the These obligations are all designed in order to ensure
conclusion of an agreement to sell or let a property that consumers are protected.
or business undertaking (except where this is not Any property practitioner in contravention of the Act
done in the ordinary course of the person’s business; will be required to repay any fees received for a property
where it is done by a natural person in their personal transaction and may be issued with a fine. Furthermore, any
capacity; or where the person is an attorney, candidate person convicted of an offence in terms of the Act is liable
attorney or sheriff ). to pay a fine, or to imprisonment for up to 10 years.
10 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020legal update
The Property Practitioners in the property sector; and to promote consumer awareness
Regulatory Authority of property transactions and business undertakings. The
The Act has established the Property Practitioners Regulatory Act further provides that the government must use the
Authority (the Authority). The intention is for the Authority services of property practitioners who comply with BBBEE
to replace the Estate Agency Affairs Board. and employment equity legislation.
The Authority is required, among other things, to ensure Any person may apply to the Authority to be exempted
compliance with the Act; to regulate the conduct of property from any provision of the Act, by submitting an explanation
practitioners; to implement measures to transform the of the reasons for the application and any supporting
property sector, and to conduct campaigns to educate documents. Although the Act does not stipulate the grounds
property practitioners and consumers. for the granting of exemptions, it does provide certain
In terms of the Act, the Authority is given far-reaching relevant considerations. For example, the Authority may
enforcement powers. It is entitled to appoint inspectors who consider whether the granting of an exemption is likely to
are authorised to enter, inspect and search any property negatively impact the general public, competition in the
practitioner’s business premises without notice (aside from property sector, consumers’ rights or the objectives of the Act.
private residences, for which a warrant is required), and
to request any document from a property practitioner. In Recommendation
the event of a contravention of the Act, the Authority The Act is significantly stricter and more far-reaching than its
is entitled to issue a compliance notice and a fine to the predecessor, the EAA Act. In light of the serious consequences
relevant property practitioner. of non-compliance with the Act, any person who may fall
It is also envisaged that the Authority will serve a dispute under the broad definition of “property practitioner” would
resolution function, by receiving complaints against be well advised to seek guidance from a legal practitioner,
property practitioners, referring disputes for mediation, and to ensure strict compliance with the provisions of the Act.
and/or appointing independent adjudicators to adjudicate
any complaints.
To achieve its objective of being a consumer-focused
piece of legislation designed to protect consumers in the
property industry, the Act obliges property practitioners to
deliver a “disclosure form” to a seller/lessor before concluding
a mandate, and to a purchaser/lessee before making an offer. CORPORATE & COMMERCIAL
15 JANUARY 2020
The disclosure form must be signed by all parties and CORPORATE &
COMMERCIAL
attached to the sale or lease agreement. If no disclosure
ALERT
form is signed and attached, the Act provides that the
agreement must be interpreted as though no defects or
deficiencies of the property were disclosed to the purchaser.
The Act also provides that the relevant lease or sale IN THIS
ISSUE
Lease renewal clauses: Landlords and tenants
beware
agreement must be in the official South African language Should regulated companies approach the TRP
for share buy-backs of more than 5%?
requested by the purchaser or lessee, and obliges the The Property Practitioners Act:
What is it all about?
Authority to “conduct campaigns to educate and inform
the general public of their rights in respect of property
transactions, and property practitioners of their functions, CLICK HERE
For more insight into
duties and obligations”.
1 | CORPORATE & COMMERCIAL ALERT 15 January 2020 our expertise and
services
The Act has as one of its objectives the transformation
of the property sector. The Authority is mandated in terms of cliffedekkerhofmeyr.com
the Act to implement and assess measures to progressively
promote an inclusive and integrated property sector. It
is required to establish a Property Sector Transformation
Fund, which applies to all property practitioners, and which
must be used by the Authority for transformation and
empowerment programmes, including programmes to
promote black-owned firms; to encourage the participation
and work-readiness of historically disadvantaged persons
SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 11legal update
Changes to the procedure to be
followed to obtain certified copies of
deeds, effective from 8 January 2020
The procedures to be followed with regards to the issuing of certified copies
of deeds in a relevant deeds registry by a registered owner of property in terms
of the amended Regulation 68 of the Deeds Registries Act 47 of 1937
By Marcelle Johnson, Senior Associate for Real Estate at Norton Rose Fulbright
II
n terms of Chief Registrar’s Circular No 5 of 2019, effective dealing with the deeds” from the date of serving the notice of
from 2 January 2020, the amendment of Regulation 68 intention until the certified copies are issued.
contained in Regulation 68(1E)(a) provides that when an Lastly, if no objection is made during the two-week period,
application and affidavit is made by a registered owner of the applicant will be in the position to submit the original
a property for the issuing of a certified copy of a deed application and affidavit as per Regulation 68(1) and proof
(“application and affidavit as per Regulation 68(1)”), the of publication as per Regulation 68(1E)(a) for examination
applicant must also issue a notice of intention to apply for purposes, so that the relevant deeds registry can issue the
such copy in a newspaper circulating in the area where certified copies.
the property is situated. This also applies in the case of a
notarial bond, where notice of intention must be issued in
a newspaper circulating in the area of every deeds registry nortonrosefulbright.com
in which such notarial bond is registered.
Practically, this means that a registered owner must not
only submit an application and affidavit as per Regulation Marcelle Johnson
68(1), but such application and affidavit must be accompanied
by proof that the required notice of intention to apply for
such copy was published in the relevant newspaper (“proof
of publication as per Regulation 68(1E)(a)”).
In terms of Registrar’s Circular No 1 of 2020, effective from
8 January 2020, the applicant must in addition to the above
notice of intention also serve the relevant deeds registry with
a copy of the notice of intention to apply for the issue of
certified copies.
Practically this means that a registered owner must submit
both the application and affidavit as per Regulation 68(1)
and proof of publication as per Regulation 68(1E)(a) to
the relevant deeds registry, and such additional notice of
intention will be open for inspection in the relevant deeds
registry by any interested person for a period of two weeks
from the date of serving the relevant deeds registry, during
which period any interested person may object to the issuing
of the certified copies.
Furthermore, the relevant deeds registry will note a caveat
against the property stating that a “VA is pending, no further
12 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020Commercial Lease SAPOA offers this workshop as in-house on request.
For more information:
Agreements
SAPOA EDUCATION OFFICER
Manager: Mafonti Morobi
Tel: +27 (0)11 883 0679
Email: eduofficer@sapoa.org.za
Website: www.sapoa.org.za
This interactive course is aimed at brokers, administrators, property managers and junior attorneys who regularly negotiate,
review or otherwise deal with commercial lease agreements. Those looking to move into a career in property brokerage,
administration or management will also benefit from this course.
Sources of the law of lease and different property rights
Formalities and essentials of a lease
Duties of the lessee and lessor
Subletting, cession and assignment of a lease
Termination of a lease including due to the insolvency of the lessee or lessor or the violation of
exclusivity clauses in the context of retail leases
Lease deposits, suretyships and guarantees
Different types of leases (e.g. triple net vs full service)
Leases concluded with government entities and with institutions of higher education for purposes
of student accommodation
Tripartite agreements relating to leases
A synopsis of relevant legislation such as the Consumer Protection Act, Insolvency Act and Competition Act
Negotiating a commercial lease
Commercial lease due diligence - what to look out for
On completion of this course you will walk away with:
The ability to distinguish between different sources of the law of lease and different property rights
An understanding of what constitutes a valid and enforceable lease
An appreciation of the legal consequences of key clauses in a lease
The ability to demonstrate a basic understanding of how the Consumer Protection Act, Insolvency Act
and Competition Act may impact leases
Insight into the legal nature and consequences of a deposit guarantee and personal suretyships
The ability to discern when a tripartite agreement may have to be concluded in relation to a lease
An understanding of the specific nuances of different types of leases including retail leases,
government leases and leases concluded with institutions of higher learning
The confidence to negotiate a basic commercial lease
The competence and practical knowledge to conduct a commercial lease due diligenceinclusionary housing
The regulatory perspective for
a secondary market system
In the inclusionary housing discourse thus far, one aspect has not received adequate
attention. As the City of Cape Town embarks on developing its inclusionary housing
policy over the next 18 months, the aspect of the regulatory mechanism into which
inclusionary housing units are taken up post-development needs deeper coverage.
It is my aim that this article contributes in some way to that discourse
By Shaheen Adams
M
M
uch of the focus on
this topic thus far has
revolved around the
impact of a proposed policy
on project feasibilities, and
Both the City of Johannesburg’s
Inclusionary Housing Policy as
well as the City of Cape Town’s
Concept Note on Inclusionary
Housing speak to inclusionary
a debate around where units remaining affordable in
along the spectrum of perpetuity. This requirement
mandatory to voluntary for perpetual affordability
participation by developers immediately necessitates for
the policy should be a functioning and regulated
placed. The debate on secondary market in which
whether inclusionary housing the management of the units
as a social good is required can be monitored and controlled
at all seems settled and is now against the rules placed upon that
a given. Government is mandated secondary market.
to implement the Spatial Planning
and Land Use Management Act Secondary market systems
(SPLUMA, Act No. 16 of 2013), and Secondary markets for the renting of
the development community has property are different from those for
Shaheen Adams, Managing Director
accepted that the need for at Wingapo Property Group the buying or selling of property. Within
inclusionary housing is a reality. the South African affordable housing
Whether inclusionary housing is context, the only fully regulated
developed for sale or for rental, the secondary market system at present is
units will form part of a secondary the social housing system. This covers
market. For the purpose of this article, I am defining a the rental market exclusively.
secondary market as one in which primary market pricing The Social Housing Act was promulgated in 2008, with
(whether for sale or rent) is discounted by the government Regulations added in 2012. The entire secondary market of
through some means or restricted by regulation in some way. social housing is regulated by the Social Housing Regulatory
I am also differentiating it from an informal market, in which Authority (SHRA). An established set of Social Housing
prices are set in accordance with demand and supply, but Institutions (SHIs), and the build-up of expertise within those
where trade occurs outside of formal market structures. Please SHIs in the development and management of social housing,
note that these definitions do not purport one type of market have resulted in the creation of a highly specialised sub-sector
to be greater or lesser than the other. of the property market.
14 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020inclusionary housing
With the exception of the Housing Act (Act No. 107 of 1997) ● Other rebates may be required to ensure total cost
as amended in 2001, which regulates the selling of RDP houses of living affordability, such as rates, water and other
by beneficiaries, the work on broader affordable housing municipal costs, so relevant departments in the city (such
legislation to manage the buying and selling of property has as Finance and Water and Sanitation) need to determine
not yet begun. Presuming the legislative process were to to what extent beneficiaries of inclusionary housing
start tomorrow, it could conservatively be a wait of 10 years would be entitled to rebates to ensure affordability.
until full implementation of the legislation. Within the City of ● The municipal, provincial and national departments
Johannesburg’s policy, there are thresholds of inclusionary of Human Settlements must agree on a nationwide
units to be provided for both social housing units as well as policy, setting out the principles to regulate the buying
for Finance Linked Individual Subsidy Programme recipients. and selling of affordable subsidised accommodation.
However, in either case, there is no stated mechanism of how Preferable to a policy would be national legislation
those inclusionary units would be managed in their respective governing this process.
institutional structures after development.
Over the years, there has been a growing informal trade in Conclusion
RDP housing that necessitated the need for the Housing Until such time that the regulatory framework for the
Amendment Act of 2001. Even within the social housing management of units can enable the secondary market
system, with its strict regulations, units are at risk of illegally system, policy should be restricted to “fees in lieu of” for
changing hands when there is insufficient control, often the municipality to deploy to its existing inclusionary housing
without the knowledge of the regulator or the SHI concerned. programmes, such as the various sites in Woodstock and
It cautions us that unless the measures for management, elsewhere in the Cape Town CBD.
monitoring and control are strongly in place beforehand, Inclusionary housing implementation should not be rushed
a unit (and its inherent subsidy) runs the risk of becoming on account of either legal compliance or political expediency.
a tradeable good in the informal market. If policy implementation is improved on account of having
ensured the secondary market mechanism was securely in
What does an inclusionary housing policy need place first, then that would have been a worthwhile wait. Even
in support of it to make it sustainable? so, all three spheres of government own substantial prime
● The SHRA and the SHIs as partners: property assets across Cape Town – more than enough to drive
The SHRA needs to create a mechanism of providing the imperative of inclusionary housing in the interim, assuming
capital grants to SHIs in order to buy sectionalised the political will to do so is present.
units from developers, and for those units to be held We speak of the ideal as mixed income, socio-culturally
in ownership by the SHI. At present, the SHRA’s system diverse developments, that are tenure-blind and foster social
of capital grant disbursement is for new greenfield social cohesion and a sense of community. The institutional structures
housing developments. Invite the National Association of enabling the consistent management of those inclusionary
Social Housing and the SHRA to participate in the policy units will be the bedrock we need to realise this ideal.
discussion and provide inputs.
● It needs to be focused. Shaheen Adams is the former Chief Director for Immovable Asset
Don’t implement rental and sale inclusionary options Management at Western Cape Government, as well as the former
at once, because each form needs its own system of General Manager for Rental Property Management at Communicare
governance. We are in the 12th year of rental market social NPC. He now consults privately in the fields of asset management,
housing governance. Build on to what is there. Start with property management and property development.
a focus on social housing, with a later implementation
date for sales of inclusionary housing units.
wingapo.co.za
● It needs monitoring and control:
An inclusionary unit, no matter the means of financing, is
a form of subsidy. The subsidy is provided to a beneficiary,
Shaheen Adams
and usually only assessed at the point of allocation. Without
a proper regulatory mechanism to manage the subsidy,
the risk of fraud and illegal trading of the subsidy start
undermining the intent of the programme. Monitoring
and control of the subsidy afterwards is critical to ensure
it is always benefiting the people it is meant to.
SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 15Western Cape overview
Western Cape: a hub for economic growth
When people think of the Western Cape, they immediately think of Cape Town
– the Mother City. But the province has so much more to offer. At the end of 2019,
Wesgro, the official tourism, trade and investment promotion agency for Cape
Town and the Western Cape, launched its first research report into the area.
Thanks largely to the information contained in that report, we have compiled
the following highlights in an overview of the region
Extracts from Wesgro: The Western Cape Property Report 2018/19
For the full range of research and documentation produced by Wesgro, and for more information about the organisation, visit wesgro.co.za
FF
irst, our thanks must go to Tim Harris, Chief Executive all-important creation of more jobs is the engine that drives
Officer at Wesgro, for giving us the green light us to re- the work of the Western Cape Government,” added David
publish elements of the report. Second, at the launch of Maynier, the MEC for Finance and Economic Opportunities in
the report, prominent Mayco members expressed their backing the Western Cape. “But that engine requires a physical space;
for the drive to promote Cape Town and the Western Cape as a place to set up shop and to provide offices and factory
a region where things get done – a region to invest in. space; a space on which to build homes for its employees.
“It is in everyone’s interest that we successfully promote This physical space is property, and it is often the foundation,
the city and the whole region as a competitive business and quite literally, on which investment is built.”
leisure destination globally,” said Harris. “We do this by “To help current and future investors make key decisions
attracting and retaining foreign direct investment, landing around the various markets and sectors in our region, we first
film and media productions, growing exports, and ensuring need to fully understand the research and data on the region,”
more business and leisure tourists visit our province. We do said Harris. “We believe these markets and sectors have a
this by facilitating important dialogue between the private common denominator in the value of property – the fixed
and public sector in our region and beyond.” capital asset that the lion’s share of investors will require to
“We also look to align the Western Cape with national make their investment visions a reality, whether that asset
priorities in terms of economic growth, trade and investment falls into commercial, retail, industrial or residential property.
promotion initiatives, and facilitate the links between business “Wesgro believes that property is a key
and government decision-makers. To this end, we are often driver of investment in any region,
the first port of call for foreign buyers, local exporters and all and often the first
investors looking towards the ever-growing potential of
our region.”
“The growth of the Western
Cape economy and the
WESGRO
THE
WESTERN
CAPE
PROPERTY
REPORT
2018/19
16 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020Western Cape overview
consideration investors will make when deciding on their The strategic sectors positioned for growth include
locale. Just as it is true for property across the globe, location manufacturing, financial services, agri-business, tourism, film
really does count, and the Western Cape offers some of the and media, digi-tech and business process outsourcing.
best locations in the world.” Within these, particular nodes of growth include real
The report suggests it’s a “buyer’s market”, estate, property development and construction,
and while the phrase is most commonly used as well as dynamic enterprises involved
to describe a point in time in a residential in boat building, clothing and textiles,
property cycle, the general consensus is electronics, renewable energy and
“To help current and future investors
that the Western Cape is a buyer’s market growing the green economy.
make key decisions around the various
across all its property nodes, making it markets and sectors in our region, we Cape Town experienced an
attractive to those looking to make fixed first need to fully understand the unprecedented drought in 2017 and
capital investments for the first time, research and data on the region” 2018, with severe water restrictions
as well as to those looking to expand on imposed at the time. This resulted in
their existing investments. the city establishing its Water Resilience
After many years of high property price Strategy, which not only turned Cape Town
growth, due in no small part to the desirability away from the brink of disaster, but also put
of the Western Cape and strong semi-gration trends measures in place for the short, medium and long
from other parts of the country, property values are stabilising term to prevent the situation arising again, thus strengthening
throughout the province, but particularly in and around Cape its overall resilience.
Town. These are offering opportunities that will no doubt
continue to appreciate in value above any others in the rest Spotlight on economic sectors
of the country, albeit it at a more reasonable rate than The six largest economic sectors in Cape Town by value in
experienced over the past decade. 2018 were finance, insurance, real estate and business services
(contributing an estimated R115.69-billion or 27.33% of gross
Cape Town: value added, or GVA); wholesale and retail trade catering
making progress possible and accommodation (R72.39-billion or 17.1% of GVA);
Cape Town has a diverse economy with several flourishing manufacturing (R63.34-billion or 14.96% of GVA); general
sectors. It is South Africa’s second-largest economic centre government (R52.93-billion or 12.5% of GVA);
and second-most-populated city after Johannesburg. It is transport, storage and communication
also home to one of the busiest container ports in the (R48.24-billion or 11.4% of GVA);
country, as well as the second busiest airport. and community, social and
Furthermore, it is the second-most important personal services (R28.88-
contributor to national employment and plays billion or 6.82% of GVA).
a crucial role in job creation in South Africa.
SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 17Western Cape overview
With Cape Town emerging as a key financial services hub South African gaming studios located in the city, as well as
in South Africa, a large portion of private investment and a large proportion of the country’s animation studios.
asset management services as well as insurance companies Cape Town’s boat-building economy is also proving its
are located here, including the head offices of Old Mutual worth, with more than R1-billion in export revenue now
Africa, Santam, Direct Axis, Metropolitan and Sanlam. generated annually, according to the office of the Mayor.
In terms of the business services sector, business process
outsourcing (BPO) and information technology were the Key factors in Cape Town’s attractiveness
largest contributors to employment growth in Cape Town The City of Cape Town is involved in a number of initiatives
between 2006 and 2016. A research report released in 2018, aimed at attracting investors through the expansion of
commissioned by the Cape Innovation and Technology infrastructure and easing the path towards doing business.
Initiative (CiTi), Wesgro and the Allan Gray Orbis Foundation,
found that more than 40 000 people are now employed Cape Town International
in the Cape Town tech industry – twice as many as Airport expansion
in Johannesburg. Cape Town International Airport is set to
Cape Town has indeed emerged as a undergo extensive upgrades and expansions
significant technology and innovation hub, to the tune of R7-billion over the next four
with the largest telecommunications years. Construction, which is expected
Since inception in 2015, the Cape Town
market and the most venture capital Air Access initiative has launched 15 new to commence in early 2020, is set to
activity in South Africa, according to air routes in and out of Cape Town, and be completed by 2023. The planned
Invest Cape Town. facilitated 21 route expansions upgrades and expansions include the
Other economic sectors that play an building of a new runway, as well as new
important role are construction (R21.99- international and domestic departure
billion); food, beverages and tobacco (R18.52- lounges to meet the ever-growing demand
billion); electricity, gas and water (R12.89- on the facility.
billion); petroleum products, chemicals, rubber and In parallel, new flights are continuously being
plastic (R12.34-billion); and communication (R43-million). added, thanks to the phenomenal success of the Cape
Of particular interest in terms of the latter is that Cape Town Air Access (CTAA) initiative – a powerful collaboration
Town is also South Africa’s “new media” hub, with 57% of all and combined effort between the City of Cape Town, the
Western Cape government, Airports Company South Africa,
Cape Town Tourism, Wesgro, South African Tourism and the
private sector. The primary mandate of the Air Access team
is to promote, develop and maintain air routes in and out
of Cape Town International Airport through route retention
(ensuring the success of existing routes); route expansion
(increasing frequency and capacity on existing routes); and
new route establishment (facilitating the establishment of
new routes).
Since inception in 2015, the initiative has launched 15
new routes and facilitated 21 route expansions. This has
doubled seat capacity at Cape Town International Airport,
adding 1.5-million two-way seats to the Cape Town network,
and contributing an estimated R6-billion in direct tourism
spend since July 2015.
Streamlining business
InvestSA is a one-stop shop based in the heart of the Cape
Town CBD at the Cape Investor Centre, which was launched in
2018. Operated by Wesgro and the Western Cape government,
it is a multifaceted collaboration between national, provincial
and local government to cut the “red tape” for investors
wishing to set up or expand their business interests in South
18 SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020Western Cape overview
Africa. This initiative clusters key government departments
and agencies under one roof to provide investors with
a single point of service with regards to aspects such as
regulatory compliance, enhancing regulatory and legal
processes and improving approval turnaround timeframes.
It also provides information on incentives (such as tax,
land, training and free-trade zones) as well as on both pre-
approvals (market data, costs, incentives, project approval
and local partners) and post-approvals (facilitation of
permit approvals, information relating to importing of
equipment and raw materials, and central bank profit
repatriation to investors). This collaboration follows the
launch by the city of the targeted Invest Cape Town initiative energy. In turn, the City of Cape Town has established
in 2017. the Atlantis Greentech Special Economic Zone (SEZ),
making tracts of land available at low cost for purchase
Creating a smart city through or lease by green-tech companies through an accelerated
the City of Cape Town Broadband Project land disposal process. A number of other financial and non-
The objective of the city’s Broadband Project is to create financial incentives are also available, which include
a high-speed, high-capacity municipal telecommunications discounted electricity rates and rapid turnaround on
network – the Metro Area Network (MAN) – which will extend development applications.
throughout the greater Cape Town area. This is designed
primarily to meet the needs of the city, as well as to provide Reasons to invest: Cape Winelands
services to both the general public and the private sector.
A Telecoms Networks Strategy positions the MAN as the Working towards an enabling business environment
carrier for a number of networks and services. As of June The municipalities in this district are all similarly aligned
2018, core network construction had already installed 750km in their business processes. While land rezoning is still time-
of fibre-optic cabling within the metro and, by completion consuming, local business chambers have commented
of the project (scheduled for June 2021), 1 317km will have positively on building plan approval turnarounds, particularly
been installed. Of the 95 switching facilities that will where electronic systems are in place. In terms of Drakenstein
ultimately be in service, 31 are already operational. The (into which Paarl falls), business licences take an average
network will connect 736 city buildings and approximately of 20 to 25 days and building plan approvals take 21 days –
300 private buildings. Since its 2009 inception, the capital but rezoning can take between eight and 12 months.
spend on the Broadband Project sits at R1.3-billion (as at June Stellenbosch (into which Franschhoek falls) reports that
2018), with a remaining R805-million still to be spent. approvals for business licences take one day, building plans
According to Invest Cape Town, 848km of fibre-optic cable 30 days and land rezoning four months.
have been installed thus far in greater Cape Town (with
1 827km planned). A total of 475 buildings have been The importance of agri-tourism and agri-processing
connected via the MAN, while free Wi-Fi has been installed at This district is a popular tourism destination, renowned
715 access points at 225 locations. particularly for its wine farms. In terms of agri-tourism
activities and facilities, Stellenbosch boasts a collective total
Positioning Cape Town as the green economy of 1 557 followed by 877 in the broader Drakenstein municipal
hub of South Africa area. The wine industry is serviced and promoted extensively
As the Western Cape has positioned itself as the green through the non-profit company Vinpro, based in Paarl, which
economy hub of South Africa, this is of particular importance represents 2 500 South African wine producers, cellars and
and relevance to the City of Cape Town. Several renewable industry stakeholders.
energy companies have already made Cape Town their home The district has a large number of agri-processing plants
across the spectrum of solar photovoltaic manufacturing, (705), particularly in its main wine-producing areas (including
electrical manufacturing, fuel supply, professional services Drakenstein and Stellenbosch). The large numbers of nurseries,
and supporting bodies. pack houses, tunnels and shade-net facilities also reiterate the
Cape Town’s three universities also actively contribute area’s importance as a well-established fruit- and vegetable-
towards research and development in the field of renewable producing region, with a well-developed value chain.
SOUTH AFRICAN PROPERTY REVIEW – FEBRUARY/MARCH 2020 19You can also read
