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New Landlords and Buildings

By Liezel Kruger, Commercial Property Portfolio Manager

Taking on a new building could be a daunting task with many variables involved.  At MidCity Property Administration & Facilities Management we try to make this transition as seamless and comfortable as possible. We provide onboarding packs, welcome letters, and personally meet every tenant to introduce them to our company and portfolio team.

One common challenge when signing on a new owner and building is the absence of necessary documentation, such as lease agreements, FICA documents, and entry inspections. We found that the majority of tenants, and unfortunately some landlords, do not understand the risks associated with occupying space without a valid signed lease agreement.  To mitigate these risks, we prioritise educating all parties involved.

As managing agents, we must comply with the Property Practitioners Regulatory Authority (PPRA) legislation and Code of Conduct. It’s essential for landlords and tenants to understand that we cannot deviate from these regulations.

The Code of Conduct outlines several key responsibilities for any estate agent or managing agent, including:

  • Protecting the public’s interest.
  • Holding a legally signed mandate to perform any agency duties.
  • Disclosing necessary information.
  • Avoiding misrepresentations or false statements, and refraining from harmful marketing techniques.
  • Fulfilling duties related to offers and contracts.
  • Managing and investing trust money, along with the associated interest.

A lease agreement is crucial as it includes the particulars of both the tenant and landlord such as commencement and termination dates, rentals, and any other auxiliary charges. It establishes order in the relationship between landlord and tenant, stipulating the rights and responsibilities of each party while legally binding them to the agreed-upon terms and conditions.  Additionally, the lease agreement provides guidelines for resolving disputes and outlines maintenance or repairs required.

The Financial Intelligence Centre Act 38 of 2001 was enacted  to aid in identifying the proceeds of unlawful activities, combat money laundering, and combat the financing of terrorist and related activities.

The Act creates a legal framework for effective identification and verification of client identities, recordkeeping, reporting processes, staff training, compliance requirements, and the establishment of the Financial Intelligence Centre and Counter-Money Laundering Advisory Council.

The Act specifies that an accountable institution must comply with the Act.  An ‘accountable institution’ is any person defined in Schedule 1 of the Act. Amongst those listed include attorneys, trustees and executors, estate agents, financial instrument trade and stockbrokers, management companies, and bankers, to name but a few.

Under the Financial Intelligence Centre Act (FICA) an ‘accountable institution’ must comply with the Act. This term includes a variety of entities listed in Schedule 1 of the Act, such as attorneys, trustees, executors, estate agents, financial instrument traders, stockbrokers, management companies, and banks.

To comply with FICA obligations, financial institutions must establish and verify clients’ identities. The following documentation is required:

  • Primary Identification: Your green bar-coded national identity document or smart ID card.
  • Proof of Residential Address: An approved document containing your name and physical address (PO Box numbers are not accepted). Acceptable documents include:
    • Utility bill (e.g., municipal water and lights account or property management statement).
    • Official bank statement from a recognized bank.
    • Letter from a municipal councillor.
    • Recent active lease agreement.
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