1. To Ban or Not To Ban? - Showhouse Boards 2. Are your Documents Up to Date? 3. New Transfer Duty Rates



IEA NEWS Issue 44 • March/April 2005 To Ban or Not To Ban? As Hamlet might have said, if he'd been a Cape Town estate agent instead of a Danish prince: "To ban or not to ban showhouse pointer boards? That is the question." Well, it's been quite a vexed question in recent months. The Cape Town City Council wants to ban them, but it is being transparent and canvassing industry opinion before making a decision - for which we must commend them. After discussions with the CCT, we undertook to canvass our members, and we received a terrific response. Nearly every IEA member in the Cape Town municipal area responded, and this unusually high response rate indicates the depth of feeling about this matter. The CCT proposal is to ban the thousands of pointer boards which are put up on the lamp posts every weekend to direct people to showhouses. They would still allow a single "for sale" or "on show" board on each property itself, but nothing to indicate the route to those properties. The motivation for the proposal is that many estate agencies are apparently not complying with the long-standing municipal by-laws on displaying pointer boards, and that trying to enforce the by-laws has become more trouble - and expense - than it is worth. Rather outlaw them altogether, than try to regulate them seems to be the thinking. Nearly 2200 IEA members responded to the survey form which we asked them to complete. The overwhelming majority - 2003 respondents - are opposed to the ban. Only 187 of them are in favour. Nearly all confirmed that they are aware of the CCT by-laws governing showhouse boards and are willing to abide by them, and many stated that they would even be willing to help enforce the by-laws by reporting contraventions to the CCT. A reason which many of our members have given for opposing the ban is that, if there were no longer pointer boards to direct people to showhouses, they would have to print the showhouse addresses in the newspaper adverts. This, they feel, poses a potential security risk to their clients, the owners - and, in many cases, occupants - of the properties. It would also mean that people could go to the properties before the showhouse day and try to get access, which would disturb the clients and interfere with the professional client/estate agent relationship, as well as expose the clients to the risk of being conned by thieves into letting them into the property. These are both valid points. The IEA Western Cape's position is very clear: it is the will of the majority of our members that the ban be opposed, and we therefore oppose it. We have delivered the results of the survey to the CCT, and we await their response. Are your Documents Up to Date? Estate agents: are your mandate, deed of sale and lease documents up to date? Or do any of them still state that you charge commission according to IEA tariff? If they do still refer to IEA tariff, then they are a year out of date! Under pressure from the Competition Commission, the IEA abolished its recommended tariff in March 2004, and the issue has received a great deal of media attention since then. We have also dealt with it in IEA News, and notified each of our members in writing, and we have urged firms to remove references to the tariff from their documents because we can no longer endorse it in any way. A Cape Town estate agency - which shall remain unnamed - is learning the hard way what the implications are of using out-of-date documents. In February 2005 it signed up a deed of sale on a printed contract which stated that the seller will pay commission according to the IEA tariff. A dispute has since arisen, and it looks as though it is going to end up in court. The seller's attorneys were not pleased when we told them that there was no such thing as an IEA recommended tariff in February 2005, and it remains to be seen how this will affect the seller's case. If it goes to court, the estate agency is likely to be publicly embarrassed for using an out-of-date document. This is therefore another reminder to get commission clauses up to date. The IEA standard contract documents have all been updated and reprinted and are available from our offices. We also have examples of commission clauses which can be used in other versions of contracts. Contact our office (021 531 3180) for further details. New Transfer Duty Rates Transfer duty on properties was lowered in the Budget announced on 23 February. The new rates are as follows: Property price Up to R190 000 Duty Nil Property price R190 001 - 330 000 Duty 5% on the amount exceeding R190 000 Property price R330 001 and more Duty R7000, plus 8% on the amount exceeding R330 000 IEA WESTERN CAPE DIARY Rentals & Management Workshop 8 April (morning) Business Broking Workshop 11 April Super Seller Course 12 - 14 April (evenings) Boosting Sales with Modern Technology 15 April (morning) Commercial & Investment Course 18 - 21 April How to Get Sole Mandates 22 April (morning) Enquiries and bookings: phone 021 531 3180