Frequently Asked Questions about property investment

Frequently Asked Questions about property investment

Every edition we have experts answering your frequently asked questions. This month’s questions focus on managing electricty bills and legal costs of purchasing a property.

Is it possible to manage your electricity bill during the colder months?

Question:  

My electricity bill has been unreasonably high over the past two months, is there any advice you can provide on how can one effectively reduce their electricity bill this winter?

Expert answer: 

MICHAEL FRANZE, MD for Citiq Prepaid

The first thing to do is choose appliances with a lower power rating. For example, switch to LED energy saver bulbs. The second way to save is to use each appliance for fewer hours. Fridges, freezers and alarm systems are the only things in most houses that need to be on all the time. With everything else, the less you use the more you’ll save. Switching things like TVs and DVD players off at the wall when you’re not using them is one of the easiest ways to save. Next, look at the things which use most power: stoves, ovens, geysers, kettles, irons and heaters and conserve use. Closing the curtains to keep the heat in, and putting on a jersey instead of turning on the heater, could potentially save hundreds of rands a year. In the same way, says Franze, consumers should find ways to use ovens and stoves more efficiently. A wonder box for cooking grains, rice, potatoes, beans and other dishes that need slow cooking saves on electricity.It’s helpful to understand the incline block tariff (IBT) system. Basically, this means that the more electricity you buy in a month, the more you pay. In the case of prepaid customers, it has nothing to do with how much you actually use — the cost is purely based on how much you buy. This means that electricity is one of the rare cases where it’s really not a good idea to buy in bulk. Rather buy from week to week, or buy just enough at the beginning of each month to keep you going. It’s cheaper to top up with a few units at the end of each month than to buy enough to last you for two months. 

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What are the costs of purchasing property?

Question:

 I am looking to purchase my first property and would like to find out what costs are involved in purchasing a property?  

Expert answer:

ANIEL JEAVEN, Founder and CEO of Aniel Jeaven Attorneys

Costs in a conventional or sectional title transfer of an immovable property would entail the fees payable to a conveyancer for the transfer of ownership to a new owner. There could be transfer costs, bond costs or bond cancellation costs. The said transfer and bond costs would normally be paid by the purchaser of the property, if however a bond is registered against the property being sold, the seller would be responsible to pay a fee to cancel the existing bond. 

The fees recommended are set out in the guidelines set by the Legal Practice Council (previously the Law Society). The guidelines can be amended from time to time.The costs are determined on a basis of the purchase price or the value of the property as set out in the guidelines. In addition to the transfer and bond costs a deeds office fee is also payable t the deeds office.Then there will be disbursements which will be added to the costs mentioned above such as post & petties, electronic generation costs, deed search fees, rates clearance fees and transfer duty submission fees, VAT could be added to the above fees and disbursements as well. 

The conveyancer attending to the bond cancellation would also charge a fee to cancel the bond on behalf of the bank plus a deeds office fee plus disbursements. 

 The fees are in respect of and inclusive inter alia the general duties performed by a conveyancer for procuring the due and proper execution and eventual registration of the particular deed or document or the filing thereof or cancellation thereof in addition to the responsibility on him/her for the accuracy of the facts mentioned in the applicable deeds or documents. The conveyancer has to also ensure that copies of any deeds are identical as at date of lodgement that all applicable conditions of title including endorsements and township conditions are correctly brought forward in any deed of transfer. 

 The conveyancer also has to verify that any person signing a document as principal or representative has been appointed and is acting accordance to the powers granted to him or her. The conveyancer also has to confirm that the parties mentioned in the deeds are correctly reflected and that the necessary authority has been obtained for the signing of the documents. 

 The conveyancer then also has the duty to ensure that all the financial arrangements are in place including the issuing of the guarantees on behalf of the bond holders, checking of guarantees and attending to the payment in terms thereof.  

Finally the conveyancer has to arrange simultaneous lodgement and registration with other conveyancers who are linked to the particular transaction.  

In conclusion this is a short summary of the services rendered by a conveyancer which justifies the fees that are due in respect of costs. 

 

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