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Sale & Leaseback
A financing arrangement where a property is sold by its owner-user and simultaneously leased back from the buyer for its continued use. This type of sale cannot be Zero Rated for VAT purposes.
Related Topic: Basic Rental, Escalation Rate, Gross Lease, Huur Gaat Voor Koop, Lease, Lease with Option to Purchase, Leasehold, Long Lease, Natural Vacancy Rate, Net Lease, Notarial Deed of Lease, Occupation, Percentage Lease, Renewal Option, Rental Types, Rent-Free Period, Resolutive Condition, Right of Pre-Emption, Triple Net Lease, Turnover Rental.

South African Property Owners Association.

South African Reserve Bank (viz. the central bank)

Second Mortgage Bond
An additional mortgage or bond registered over the property. The money could be used for renovations, to buy another property or for expenses such as a holiday or university fees.

Sectional Title
A property divided into individual units, usually townhouses or flats, which are sold separately. Thus, tenure is held by the property owner over a section of the property, not the whole property. The sectional title property has common areas, such as stairways and lifts, that belong collectively to all the owners of the units. The sectional title complex is managed by a body corporate, who takes care of the day-to-day management of the complex e.g. employment of maintenance staff, upkeep and collection of levies. All the owners of the individual units are members of the body corporate and pay monthly levies to contribute to the day-to-day running expenses.
Related Topic: Freehold (Free) Title, Leasehold, Share Block Schemes or Developments.

Secular Trend
A long-term growth path of an economic variable, around which there might be short-term (business cycle) or other fluctuations.
Related Topic: Cyclical Trend.

The use of securities such as shares and bonds that enables investors to lend directly to borrowers, with minimum risk, and without using banks as intermediaries. An example of securitisation would be if an investor purchases shares on the securities exchange in a listed company – the investor (lender) transacts directly with the borrower (company) via the security exchange (such as the JSE) by purchasing the security (share).

Collateral for the bank, which can be called on in case a client defaults on payment.

The use of securities such as shares and bonds that enables investors to lend directly to borrowers, with minimum risk, and without using banks as intermediaries. An example of securitisation would be if an investor purchases shares on the securities exchange in a listed company – the investor (lender) transacts directly with the borrower (company) via the security exchange (such as the JSE) by purchasing the security (share).

Service Fee
The monthly fee banks charge on a home loan for the administration costs of maintaining the loan.

A registered right one person has over the property of another, registered against the title deed, which usually entitles the holder of the servitude to do something on the property. A common example is a right of way to travel over the property. It could also, for example, be a registered right of access, which allows the local authority access to a property for inspection or installation of pipes, sewerage lines, electricity cables, etc. A servitude is registered against the title deed.

Share Block Schemes or Developments
Under a share block scheme, a purchaser buys shares in a company that owns a property and the shares entitle the purchaser to use and occupy a unit/house/designated area of the company-owned property. Since no title deed can be registered, the bank cannot register a bond. The operation of a share block scheme is regulated by the Share Blocks Control Act 59 of 1980, as well as by the provisions of the Companies Act 61 of 1973.
Related Topic: Freehold (Free) Title, Leasehold, Sectional Title.

A retail concept that brings shopping and entertainment facilities together in a single shopping mall. The term is not used in South Africa because an American company holds copyright on the name.

Shopping Centre Configurations

Shopping Mall:
Typically enclosed with common walkway between two facing strips of stores. This is the design mode for super regional, regional and most community shopping centres.

Strip Centre:

Is an attached row of stores or service outlets managed as a coherent retail entity, with on-site parking, usually located in front of the stores. Store-fronts may be connected by open canopies, but there are no enclosed walkways linking the stores. Store configuration is either a straight line, “L” or “U” shaped. This is the design mode for most neighbourhood, convenience and value (power) centres.

Shopping Centre Types

Super Regional Malls
More than 100.000 rentable m² of shop space; substantial comparison-shopping; principal tenants are three or more major department stores; more than 250 shops. Examples are: Eastgate and Sandton City (Johannesburg); Menlyn Park (Pretoria); Gateway (Durban metro); Canal Walk (Cape metro).

Regional Malls
30.000 to 100.000 rentable m² of shop space; principal tenant(s) are one or more major department stores; approximately 40 to 250 shops. Examples are: Westgate, Fourways Mall, Cresta (Johannesburg); Brooklyn Mall (Pretoria); The Pavilion (Durban metro); Sanlam Centre in Parow, Tyger Valley, Kenilworth (Cape metro); Greenacres (Port Elizabeth); Mimosa Mall (Bloemfontein); Vincent Park Shopping Centre (East London).

Community Centres
10.000 to 30.000 rentable m² of shop space; principal tenant is typically a variety store (e.g. Clicks) or a discount department store (e.g. Dion or Game); approximately 30 to 60 shops. Examples are: Sunnypark (Pretoria); Musgrave Centre (Durban); Middestad Mall in Bellville, Meadowridge, Goodwood Mall, Constantia Village (Cape metro); Constantia Centre (Port Elizabeth); Brandwag Centre (Bloemfontein); Beacon Bay Retail Park (East London).

Neighbourhood Centres
3.000 to 10.000 rentable m² of shop space; principal tenant is a supermarket; 15 to 40 shops.

Convenience Centres
300 to 1.200 rentable m² of shop space; principal tenant is a café or grocer like Kwik Spar; 5 to 15 shops.

Retail Warehouse
Stand-alone; single tenant; >10.000m²; air-conditioned, no ceiling, warehouse-like finishes, e.g. Makro, Hypermarket, Game, Dion.

Value Centres
Multi-tenanted strip centre; >10.000m²; warehouse type finishes in order to deliver lower prices to consumers.

A property situated within a 150km radius of a built-up area that does not exceed 20 hectares and can be connected to a local authority’s water supply, or which has a borehole.

Removal of shorter-term fluctuations in a time series, by e.g. moving averages, exponential smoothing, or curve fitting.

Solvency Affidavit
An affidavit signed by a borrower with the bank’s conveyancers, confirming that he/she has never been sequestrated.

Speculative Development
A high risk development that takes place without a secured tenant or without pre-selling - an indication that the market is buoyant and developers are confident. Speculative transactions are often associated with the high returns due to the risk involved.

A person who buys property for the sole purpose of selling it at a profit within a short timeframe, based on an expectation that the value of the property will increase significantly over a short period of time.

Standard Capitalization Rate
It is the expected net operating income for year 1, assuming the entire building is let at open market rentals, divided by the purchase/transaction price, normally expressed as a percentage. This calculation ignores VAT, transfer duty and income tax, and assumes a cash transaction (in contrast to a paper-based sale).

Standard Deviation (SD)
A measure of dispersion in a set of data. For instance, assume a mean of R10 and an SD of R1,50. This means there is a 68% chance the values will lie between R10 - R1,50 = R8,50 and R10 + R1,50 = R11,50.

Stats SA
Statistics South Africa, South African government’s statistics department. Previously known as Central Statistical Services (CSS) and even earlier as the Department of Statistics.

Statutory Law
The body of laws created by legislative statutes, i.e. the written law of the country.

The division of a property, according to a specific legal and technical procedure, into two or more portions.

A suspensive condition used in Offer to Purchase documents when the buyer must first dispose of an existing property before he/she can buy the new property. The clause states that the sales contract will only become unconditional between the parties if and when the buyer sells his/her own property within a certain time period, usually 60 days.
Related Topic: Suspensive Condition.

A housing allowance that forms part of an employee’s remuneration package. The employer deducts bond repayments directly off the employee’s salary. Government employees usually receive subsidies.

A guarantee for a loan provided by a person other than the borrower. Signing surety on a loan means that the person signing surety agrees to be personally responsible for the debt if the borrower cannot repay it. The term ‘co-principal debtor’ means that if anything goes wrong, the person who signed the surety is considered to be as responsible as the debtor and will be called on to pay the debt. In fact, in most cases, the bank can decide to simply claim the money from the strongest financial party.

Surveyor General's Diagram
Shows subdivisions, servitudes, expropriations in relation to a property. It becomes a condition of loan when the assessor cannot identify the property to be bonded on the latest municipal map.

Suspensive Condition
A clause in an agreement of sale whereby the validity of the contract is made subject to the occurrence (or non-occurrence) of a future event. Usually, but not limited to, Due Diligence for commercial property or the granting of a finance or the sale of another property before a certain date. Only if and when the suspensive conditions have been fulfilled will an enforceable contract exist.
Related Topic: Subject-to-Sale.

Cancelling a bond with one bank and taking out another bond on the same property with another bank. This may be done to access equity or to obtain a better interest rate. Note that there are cancellation fees charged for cancelling a bond. The main reason you would consider switching bonds is to save money.

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