Economic review

We have a record of ignoring IMF warnings: that body has said that our economy is extremely vulnerable to external shocks and funding shortfalls. Expect volatility.

Standard bank’s PMI has dropped slightly to 49 (as has that of Absa/BER), indicating a contraction in manufacturing. At the same time SACCI says that its monthly business confidence index has ticked up slightly. Clearly, not much is happening suddenly.

One of the tenets of an indication of impending financial growth is an uptick in the sale of light commercial vehicles. The sale of such vehicles in South Africa rose inexplicably 8%, year-on-year, last month.

Business review

NHI: dreaming on. We intend spending a fairly sizeable chunk of national income on affordable health for all. National health sounds great, but, even in developed countries, this does not work that well. By way of example: a son of mine waited nine months to be operated upon for a torn tendon in New Zealand….compared to us, those guys are much better off and has a much broader tax base. At the end of the day, NHI in South Africa is simply an additional tax which will be paid to provide public health care which is woefully inadequate today. If one wants healthcare on tap, this will undoubtedly come at an additional cost.

The NCR has engineered that the maximum amount lenders may charge consumers, for credit life insurance, is R4.50/R1000. Good, such insurance has been a rip-off for years.

Education: there is much made of the shortage of medical doctors. Yet some 80 doctors nationally have not been placed for their Zuma year. To compel a person to do such service and then not to provide him with the opportunity, is not nice.

On the same tack: the Department of Basic Education has proposed a reduction of passmarks in grades 7, 8 and 9. Essentially it wishes to:

drop maths as a compulsory promotion requirement in these phases; and
pass pupils on the basis of them gaining-
- 30% in three subjects; and
- 40% in another four subjects, including home language.

We seem to be taking the subjects to the pupils rather than the other way around. Pragmatically speaking, we have already forsaken quality public education in South Africa. We are substantially adrift of world standards in general education and this will cost us dearly in future.

IQ makes you live longer: every jump of 15 IQ points is associated with-

A 28% reduced risk of death from respiratory disease;
A 25% reduced risk of death from coronary heart disease; and
A 24% lower risk of death from stroke.

Property review

The FNB house price index reveals that house prices had increased by 3.6% year on year in May. After adjusting for inflation, this indicates declining prices. The so-called sweet spot for houses is those for which monthly bond re-payments are between R7 and R12k.

Interestingly, rent-to-own transactions are slowly reappearing on our property scene as buyers look for creative ways to get a foot into the property market in a declining economy.

Offshore property companies have been the best performing of the real estate groups in the first half of this year.

IEASA says there the new property sector BEE code was compiled without adequate research. The new directive, for BEE ownership, is 27% for property-owning companies. Additionally, established companies are required to financially support those that are at least 51% black-owned. I really don’t understand how this is expected to be enforced. At the end of the day most estate agencies do not provide services to the State and the only sanction might well be that banks would not support those who are non-compliant

They are apparently some 30,000 registered agents (of these 15% are black) bundled up in some 6000 companies. The average estate agent earns about R15000 pm gross.

This has been reported on before but is worth revisiting: a municipality may not charge the full annual rate on issue of a rates certificate. It is only allowed to charge rate in advance for the period of the validity of the rate. Our local municipality does not understand this.

http://www.saflii.org/za/cases/ZASCA/2017/36.html

A levy clearance certificate that is issued by the trustees of a body corporate is not valid unless signed by two trustees or the managing agent. We often deal with duplexes of which the sections are owned by just two owners. Both will have to sign the clearance certificate. R10(a) of the Management Rules.

Practice review

The Draft Sectional Titles Amendment Bill may be found at https://pmg.org.za/call-for-comment/566/

Some of the issues that it addresses are:

provision that a certificate issued by an architect or land surveyor must also comply with section 26 (2) of the Spatial Planning and Land Use Management Act 2013;
the amendment of sectional plans in respect of exclusive use areas;
the noting on a title deed of the lapse of a reservation in terms of section 25 (good!);
a lease of a part of the common property;
the extension of a scheme, participation quotas and so on.

Worth a look.

Cases and such

Estate property transfers

This week past we were presented with a transfer of a full property from an estate to a purchaser. On starting to enquire, it turned out that, some 15 years ago, the State Attorney had transferred in accordance with a deed of sale to a husband and wife, some 10 years before that. The State Attorney never enquired as to any change of status of the purchasers on transfer but simply followed the status of the parties as it stood at the time of purchase. By then the original purchasers had become divorced, whereafter the husband had died. The surviving spouse remarried in community of property, got divorced, and took back her prior surname and then died. On the face of it, the now deceased owner was the sole owner of the property as her name matched that on the title. Her executor sold the whole property from the estate, not realising that only one quarter of the property had remained in the estate. One is tempted to walk away from such a transaction as one might have to wind up the estates of both of the deceased spouses, which had not been properly dealt with, and deal with possibly two section 45 endorsements. Even worse, the entire property was worth a modest R300k, which meant that the costs would be such that the eventual heir could hardly afford this. In addition, the sale would quite probably be lost as the time taken to sort all of this out would be such that the current purchaser would most probably have lost interest in the purchase.

PTO and huur gaat voor koop

In our common law, a lease survives the sale and transfer of a property from one landlord to the following. What happens when you hold a Permission To Occupy in terms of the KZN legislation dealing with formerly black land? The case below should have dealt with this but, owing to the matter not having been properly argued, this was abandoned in favour of a fairly decent discussion on repudiation and the remedies therefor. One wonders whether the change of a PTO will be seen as akin to transfer under our common law, in so far as it affects leases.

Sunshine foods v Chen KZN http://www.saflii.org/za/cases/ZAKZPHC/2016/29.pdf

Quotables

I am not a businessman or a professor, but I’m rebelling against (the idea that) what determines the value of a commodity is the law of supply and demand. I am against that definition. The value of a commodity is the labour time taken in production of that commodity.

Zuma

South Africa reiterates its total commitment to the principles of international justice.

Our department of international relations and cooperation 2015

Comment

How times have changed: Julius Malema was the keynote speaker at the Rand Merchant Bank Macro Forum in Sandton, addressing a gathering of SA’s leading economists.

“It’s political suicide and you will decide that today is the day you are gone.” Mbalula addressing members who might vote with their consciences in the impending vote of no confidence against our president.

Lighten up

They have brought out a new girlie magazine for the married market. It’s just like Playboy or Penthouse but it’s the same model, month after month after month…

On matters ecclesiastical:

“There’s a fine line between a long, drawn-out sermon and a hostage situation.”