Housing and interior Flashcards
What is a lessee or tenant?
It is the person that is renting a house or flat.
What is a lessor or landlord?
The owner who lets out the property.
What is a lease or lease agreement?
An agreement or contract between the landlord and the tenant.
What is full title ownership or freehold?
The buyer becomes the legal owner of the entire property, the plot as well as the structure on it.
What is a sectional title?
The buyer is the legal owner of a section of a housing complex but communal areas are jointly owned.
What is a body corporate?
A group that controls, administers and manages a sectional title complex. Every owner in the sectional title complex is a member of the group.
What is rent?
The amount paid each month by the tenant to the landlord to stay in the accommodation.
What is a levy?
A fee paid monthly to the body corporate for the maintenance of the building and common areas and security.
What is a deposit?
The amount of money that must be paid towards the purchasing or renting of a property before moving in (usually equal to 1 months’ rent or 10% of the purchase amount.
What is a bond/mortgage/home loan?
It’s the money the buyer borrows from a bank to buy property. This is paid back in monthly instalments, with interest over a fixed period.
What is interest?
The cost that must be paid to the bank for borrowing the money.
What is an offer to purchase agreement?
A written offer from the buyer to the seller that contains the purchase price and all the terms and conditions for purchasing the property.
What happens when the seller and the buyer sign the offer to purchase agreement?
It becomes the sales agreement or deed of sale once signed by the buyer and the seller.
What is bond or life insurance?
Insurance that will cover the outstanding amount of the home loan should something unexpected happen to the buyer.
What is comprehensive homeowner’s insurance?
Short term insurance that protects the house against structural damage from fire, floods and other natural disasters or political unrest.
What is household insurance?
Insurance that covers the content in the house, e.g. furniture, TV and other appliances against theft and damage.
Discuss monthly repayments of bond/mortgage.
The owner of the house must pay back the bank on a monthly basis for about 20-30 years. Repayments should not exceed 25-30% of the homeowner’s income.
Why is a fixed interest rate a benefit for a bond/mortgage?
An interest rate that is fixed does not change over the agreed upon period of time. Therefore repayments remain constant.
Why is a flexible/variable interest rate risky for a bond/mortgage?
When the interest rate changes based on the repo rate your repayments can go up significantly and you might not be able to afford your home anymore.
What is collateral security?
Something of equal value to the loan pledged as security for the repayment of a loan.
What are the advantages of renting?
Pays a fixed amount over a specific period, don’t pay land or property taxes; not responsible for property maintenance; easy to give notice and move; fewer monthly expenses.
What are the disadvantages of renting?
You will never own the property; your assets don’t increase; can be difficult to find a suitable rental; rent increases yearly and you can’t use the property to secure a loan; you can’t make changes to the property.
What is the tenant responsible for when renting?
Monthly rent payments and paying a deposit, inspecting the property before signing the lease, making a list of defects before moving in, household insurance, rates and taxes.
What is the landlord responsible for when renting out a property?
Inspecting the property before the tenant moves in, maintaining the property, homeowners insurance, property taxes.
What financial rights and responsibilities do you have when you build a house?
Buying land in the right location; choosing a house plan and getting it approved by the municipality; selecting a contractor or builder with NHBRC registration.
What are the advantages of building a house?
Design the house to suit your needs and taste; latest design and technology can be included; create an environmentally friendly house; finish according to your own schedule; if you run out of funds, work can be halted; its an investment.
What are the disadvantages of building a house?
Risk of faulty construction and design; can cost more than buying a house; if building is delayed it can cause stress and discomfort; can be complicated and time-consuming; quality control is critical; its expensive to start a new garden.
Which factors should be included in a building contract?
All costs; exact dimensions; completion date; all guarantees provided; payment dates; cancellation clause; specification list of all materials.
What are the advantages of buying a full title or freehold?
You are the legal owner of the property; can make changes as you please; sense of security and independence; sound investment of your money.
What are the disadvantages of buying a full title or freehold?
More expensive than renting; responsible for maintenance, safety and security; must pay rates and taxes along with capital gains tax; can be difficult to sell; bond repayment could be large.
What are the advantages of a sectional title ownership?
Legal owner of a section of the property; can make interior changes; sense of security and independence; can be used to secure a loan; sound investment; can use common areas; less administration due to body corporate.
What are the disadvantages of a sectional title ownership?
Must pay monthly levy which increases yearly; must share common areas; permission needed to change exterior; bond payment could be large; could be difficult to sell
