PROPERTY NEWS - All too often estate agencies are not following basic business principles when facilitating an offer to purchase.

New legislation has set the spotlight on the property industry with a strong focus on community dwellings where complexes are under management by a home owners association (HOA) or a body corporate (BC) in the case of a sectional title scheme.

Gone are the days when an agent chases sales for commission and just cannot wait until the sales agreement is signed, never mind all of the critical aspects of the property in question. 

This is a serious wake-up call for all agents as the selling of properties becomes more compliant and technical with essential criteria which the potential buyer must know before the agreement is finalised.

Many articles have been written where buyers seem to be the ones at fault when delaying the transfer, which in many cases is due to lack of knowledge.

Now is the time to focus on agencies who must play the major role in the total success of any property transaction.

Relevant essential Acts:

• Sectional Titles Act, 95 of 1986
• Sectional Title Schemes Management Act, 2011
• Community Schemes Ombud Service Act, 2011 (Act No: 9 of 2011)
• Property Practitioners Bill, 2016
• Consumer Protection Act
• Rental Housing Act

All of the above legislation should be well known to all estate agents and also available in hard copy should the potential buyer have an interest in knowing more detail. 

The Consumer Protection Act is designed to ensure that any purchaser has the right to know all relevant details when a possible transaction is to be made.

The purchaser has the right to know:

• Full details of the neighbourhood
• Approved property plans
• Possible encumbrances (servitudes, common entrances etc)
• Recent house changes (additions, alterations)
• Building or property defects
• Possible outstanding debts ( municipal, garden services, builders)
• Property service charges ( Rates, refuse, water, sewerage)
• Average electricity usage (direct municipal or prepaid)

Essential information for the buyer:
In the case of community living developments, the following documents are essential to the prospective purchaser and must also form part of the agreement as an addendum duly signed. 

Should there be any doubt or conflict of views on the part of the purchaser, the deal should not proceed until there is total clarity.

• The Constitution/Articles of Association in the case of a HOA.
• Latest House/Conduct rules in the case of a HOA/BC
• Management Rules in the case of a BC.

The above to be Annexures to Offer to Purchase.

Information that is a plus factor:

• Last annual general meeting (AGM) minutes
• Recent notices or circulars
• Layout of the development
• Levy contributions (what proportions of levies paid - water, maintenance of common property, electricity, security, insurances)
• Details of the respective Home Owners Association (HOA) or the Body Corporate (BC) for Sectional Title Complexes
• A general synopsis of the community living environment as the prospective buyer may never have experienced community living
• Security controlled procedures (manned or automated entry)

No information is too little, the more informed, the happier the prospective buyer, and so, the success of the sale.

Property management
Even more crucial is when agencies manage properties. This is not just about collecting levies. 

The responsibilities become more onerous in managing gated communities. 

These include the budgeting process, the administration of the reserve and administrative fund and statutory compliance to mention a few.

Whilst accountability does not absolve owners, a responsibility is expected of estate agencies to ensure that tenants are given the same detailed information when signing an agreement to lease.

The rental agent acts on behalf of an owner and is therefore obliged to ensure that leases comply with the Rental Housing Act in terms of making rules and regulations of a HOA or BC part of a lease.

For modern living and secure living lifestyles, more and more people choose to move into community living developments. In many cases they are from private housing. 

This is a new living environment and involves a significant change in living conditions for families and older citizens.

Heed these words
Advice for new homeowners: be well informed before making any commitment with an estate agency.

Advice for estate agents: be well informed regarding your statutory obligation to disclose.

Anthony Stokes is a property consultant from George.

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