Non-resident clients lose money for non-compliance with regulations
Delegates attending the recent Rawson Property Group Western Cape Franchisees Conference were dismayed to learn from one of the independent speakers, Jo Williams, that estate agents dealing with non-resident buyers are frequently at a loss when advising buyers on how to go about achieving deals that comply with South African Reserve Bank regulations. This lack of knowledge can prove expensive in both time and money to foreign buyers.
Williams, a specialist non-resident consultant, said that the South African Reserve Bank's control regulations for property purchases by non-residents are stringent and in nine cases out of ten a consultant such as herself should be called in to advise not only on the purchase but later, if and when it becomes necessary, on the sale of the property and the repatriation of the funds.
Difficult to repatriate funds
"Many international clients who bought property in South Africa in the 1980s or 1990s have had difficulty in repatriating their funds when they decided to sell, as quite a large number have done since the 2008/2009 financial crash," said Williams. "This has almost always been due to their not complying in full with the South African Reserve Bank's exchange control rulings at the time of purchase."
The good news however, is that a non-resident consultant can assist the client in putting through a special remedial application to the South African Reserve Bank and, although the process can be time-consuming, the bank will usually be sympathetic and assist the applicant to put matters right. However, it is infinitely preferable to comply fully with the regulations at the outset.
