Credit Ratings

Things You Need to Know About Bond Credit Ratings

When you apply for a home loan, there are a number of factors that influence your FICO credit score. Most financial institutions strive to adhere to a maxim of ‘only good credit need apply’. There are institutions that will lend to individuals or businesses with very low credit scores, but these loans often come at an exorbitant price, costing consumers much more than the original purchase. Even if your credit score isn’t necessarily bad, but ‘so-so’, you’ll probably end up paying a lot more than someone with a very good credit rating.

Payment history

This includes payments that have been missed or paid late. Your payment history also involves the different types of payments that you make each month (car, house, credit cards, etc). Roughly 30% of your credit score is determined by your payment history. A person with good credit will most likely have a history of consistently paying on time each month over a long period of time, with little or no missed payments.

Amount owing on accounts

Do you have dozens of accounts carrying high balances? Are most of your credit card accounts maxed out? Or can most of your debt be traced to one or two accounts, such as your mortgage and car payments? Good credit is hard to come by if you carry balances on many different accounts.

Length of credit history

This has to do with whether you have established sufficient history to provide an accurate portrait of how you manage your finances. Lending institutions want to know whether you have a history of paying on time. If you have managed credit perfectly, but your account is only a year old, it probably won’t raise your credit score. It’s best to keep it up for a few years and you’ll see your credit score soar.

Types of credit

The type of credit you use is a factor in calculating your credit score. For instance, the use of credit cards, mortgages and installment loans (car, student loan, etc). If the type of credit you use weighs heavily on credit cards and other high interest sources, then your credit score will certainly suffer.

New or recent credit history

This has to do with any new credit accounts that you may have opened, whether you’ve made requests for new credit and how you’ve recently managed all of your credit. If you open several accounts at once, this could hurt your credit score. A person with good credit usually has a long history with a few accounts that are in good standing.

The importance of paying your bills on time every month cannot be stressed enough.

Many banks offer the option of scheduling automatic payments each month and it is advised that you make use of them. Also, don’t open new credit accounts if you don’t intend to use them, and don’t open and close accounts frequently. Instead, focus on using the accounts that you already have responsibly. This alone will raise your credit score and make it much more likely that an institution will grant you the best loan.

The information in this article is courtesy of www.buyprop.co.za (accessed Thursday 20 March 2008).

If you are interested in buying or selling property in South Africa, please visit http://www.sahometraders.co.za/.

Going Green at Home

How can you help ease the electricity crisis in South Africa, as well as do more for the environment?

With electricity use such a problem around the country at the moment, it might help to have some useful information about what you can do at home to help. An article on “Greening your home” by Giles Griffin was published in The Property Magazine (April 2008). Environmentally friendly and energy saving design has gone in and out of fashion over the years, but it’s now safe to say that “going Green” makes a lot of sense.

Electricity isn’t the only supply that is proving unreliable and costly. In Cape Town, there are similar constraints that apply to water and waste management. Generating up to 6% more waste each year, Cape Town’s landfill sites are steadily filling up and closing fast. Out of the six sites that are currently available in the province, two have already closed and two more are nearly full. Waste is undeniably a major issue, as soon there will be nowhere for it to go.

Water demand is growing by 4% a year and is a problem throughout the country. Although water experts believe that there’s no need to worry and that there is little danger of another Eskom situation, there are now by-laws that have been established in the Cape to govern the use of water. The point is that South Africans need to act rather than just think about saving energy, waste and water. Anybody who has seen An Inconvenient Truth will have an idea of what this means.

Grace Stead (owner of environmental consultant company, Steadfast Greening) has produced an extremely practical and user-friendly Smart Living Handbook that outlines various things that can be done to save in all areas at minimal cost. Some of these include fitting a solar water heater to save energy, or installing compact fluorescent light bulbs and switching off appliances when they aren’t in use. In order to reduce waste, it’s suggested that you check the toxicity of items that you buy, compost your organic waste and follow the three Rs: reduce/recycle/reuse. To save on water, taps need to be aerated, toilets multiflushed and a water-wise garden planted.

Reinhold Viljoen, also an energy consultant, mentions making passive solar inventions in your home, such as shading, overhangs, insulation in ceilings and walls, and considering what type of glass you are using. To save water, he suggests that you harvest rainwater to flush toilets and top up pools, as well as using grey water systems for the garden.

When it comes to looking after our environment, we can start by looking after our own properties and ensuring that we are doing all we can to save on energy, waste and water. It might mean a little more of an investment upfront, as some of these alternatives are a little more expensive, but they will certainly pay for themselves in the long run.

The information in this article is courtesy of Giles Griffin, “Greening your home” in The Property Magazine, April 2008.

If you'd like to buy or sell property in South Africa, please visit www.sahometraders.co.za.

Important Information for Buyers and Sellers

IMPORTANT INFORMATION FOR SELLERS AND PURCHASERS


For TRANSFERS make provision for extras such as post and petties, Rates Clearance Certificate or a Levy Clearance Certificate (+) R1 000

For BONDS make provison for extras such as post and petties, Deeds Office fees and Bank initiation fees (R2 000 – R5 700)

Non-resident sellers should be aware that for sales of R2 000 000 (two million rand) and more a portion of the purchase price (currently 5 % for individuals; 7.5 % for companies and 10 % for trusts) will be paid to SARS on account of Capital Gains Tax. The seller may subsequently apply for a refund for any amount overpaid.

Once the conveyancer has applied to the seller’s financial institution to issue a bond cancellation instruction for the existing bond, the seller may no longer be able to access funds from the bond and will be required to continue making bond payments until registration.

The purchaser will be required to pay transfer duty as early as approximately 6 weeks prior to registration. Speak to the seller’s conveyancer as soon as possible after signing the Agreement of Sale to determine what date payment of transfer duty is required and to discuss bridging finance should this be necessary

Please ensure that your tax affairs are up to date as any unresolved issues with SARS could delay transfer

If a mortgage bond is not finally approved before the due date, the Agreement of Sale is no longer valid and binding on the parties.

All sellers should be advised that in most cases there will be Capital Gains Tax implications. Please contact one of our experts in this regard.

Once rates clearance figures have been requested a seller should not make any further payments directly to the local authority, Payments should only be made to the conveyancer on the conveyancers’ request, to avoid duplicate payments.

This article is courtesy of C & A Friedlander Attorneys.

Landlord and Tenant Rights in South Africa

Pro-landlord laws

Rent: Can landlord and tenant freely agree rents in South Africa?

Rents can be freely negotiated in South Africa.

However, the tenant can file a complaint with the Rental Housing Tribunal if the landlord is charging too much rent for poor-quality accommodation. The tribunal can order the landlord to reduce the rent if the building is not well maintained.
Deposits

There is no restriction on the size of deposit, but it must be stated in the contract.

The landlord must invest the money in an interest-bearing account, and the interest rate must not be lower than the rate applicable to a savings account. Within 14 to 21 days of the end of the lease, the landlord must return the security deposit, with interest.

What rights do landlords and tenants have in South Africa, especially as to duration of contract, and eviction?

The landlord cannot prematurely end a fixed-term lease.

If the tenant remains in the unit after the end of the fixed term with the express or tacit consent of the landlord, the lease is deemed to be a periodic lease. Periodic leases can be terminated by giving a month’s written notice.

If the tenant refuses to vacate the property after the expiration of the lease, the landlord must obtain a summons from the court. If the tenant decides to respond to a summons, he or his lawyer must file within three days the “Notice of intention to defend” printed at the back of the summons. A hearing will take place. The court may then issue an eviction order. The landlord must supplement this with a warrant of eviction, stamped by the court. Under the law, notice must be given two weeks in advance before the tenant is evicted.

If the tenant poses an immediate threat to the landlord, then the landlord can file for a “summary judgment.” A summary judgment allows the sheriff to evict the tenant even if the case is still being heard in the court.

To fight off an eviction, the tenant can claim a right of retention, a right to stay in the house until the landlord compensates the tenant for any improvements made on the house.

The Sheriff with the help of the police carries out the eviction. If the tenant owes rent, the court can order the sheriff to attach the tenant’s properties to the house. It means the sheriff can take the tenant’s properties and sell them to compensate the landlord. A landlord can also file for an “interdict,” preventing the tenant from taking his things as long as the arrears are not paid.

EVICTION FOR NON-PAYMENT OF RENT
Duration until completion of service of process 10
Duration of trial 189
Duration of enforcement 10
Total Days to Evict Tenant 209
Courts: The Lex Mundi Project

How effective is the South African legal system?

The Rental Housing Act [No.50 of 1999] provides for the establishment of Rental Housing Tribunals in all provinces of South Africa and grants them the authority to settle disputes between tenants and landlords. So far only three of the nine provinces have created housing tribunals, Gauteng, Western Cape, and North West.

Rental Housing Tribunals use the same procedures as a Labor Court and give rulings with the same power as those of a magistrate’s court. The tribunal has 30 days to help the parties reach a solution. If any party is not satisfied with the proceedings of the tribunal, he may take the case to the High Court.
Recent changes in African landlord and tenant law

Rental Housing Act [No.50 of 1999] repealed rent control which had been in place since 1976. It governs the relationship between the landlord and the tenant and applies to all written and verbal agreements made, effective August 1, 2000.

This article is courtesy of the Global Property Guide.

If you are interested in buying or renting property in South Africa, please don't hesitate to visit the SA Hometraders website.