South Africa has some interesting new real estate legislation in the pipeline that is destined to have an effect on how investors and property owners operate within the property sector.
Attie Pretorius, director and head of the national real estate practice at Cliffe Dekker Hofmeyr, says the City of Cape Town recently promulgated a bylaw tailored to regulate the issue of dilapidated and often abandoned buildings that may pose health and safety risks to the public.
"The bylaw prescribes the regular inspection of buildings, the serving of notices and warnings on landowners requesting, among other aspects, the repair or demolition of the dilapidated structure. Notably, the bylaw authorises the local authority to take such steps to repair or demolish these structures at the owner's expense."
The bylaw is a welcome measure as far as urban regeneration is concerned, Pretorius says. "Other provinces may benefit from enacting similar laws."
Another important piece of real estate legislation is the Rental Housing Bill, which proposes to regulate the relationship between landlords, certain historically disadvantaged and/ or indigent tenants and the government.
"In particular," Pretorius says, "chapter four of the bill establishes rental housing tribunals, which are responsible for resolving disputes between landlords and tenants."
The tribunals will have the jurisdiction to determine issues relating to overcrowding; unacceptable living conditions; lack of maintenance and exploitive rentals. "This bill, if enacted, may have far reaching consequences for landlords and tenants alike."
Pretorius says as regards developments in the real estate sector, the real estate investment trust (Reit) is a novel property investment structure, which makes investment in income-producing real estate more accessible to a more diversified range of investors, including institutional and retail investors.
According to Investopedia, a Reit is: "A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages."
"This structure has become increasingly popular in foreign countries and will be a welcome addition to the South African property investment milieu," Pretorius says.
On the future of real estate in SA, Pretorius says: "I believe that in future, the residential longterm lease will become more popular as an alternative to land ownership and will offer an alternative to government in the provision of housing to persons falling in the lower-income bracket."
In future, the residential long-term lease will become more popular as an alternative to land ownership
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