-Yes, you have a legal obligation to disclose any latent defects that you are aware of to potential buyers.

Failure to disclose latent defects could result in legal action against the seller, including claims for damages and the cancellation of the sale agreement. It is therefore important for sellers to be transparent and forthcoming about any defects they are aware of, and to provide potential buyers with a full and accurate picture of the property they are considering purchasing.

-In a property sale, the transfer attorney is appointed by the seller, as determined by common law. This is because the seller grants the attorney the power to transfer the property to the purchaser via a power of attorney. Although the seller has the right to choose the transferring attorney, the buyer is responsible for covering the property transfer fee.

The transfer attorney handles most administrative tasks, including gathering necessary documents and submitting them to the deeds office. The parties may agree to use the purchaser’s transfer attorney, but if the seller objects, the seller’s attorney must be used. In some cases, the agent may recommend using their panel of attorneys, but the final decision still lies with the seller.

– The property transfer process in South Africa can be delayed due to various factors involving both the buyer and the seller. Some typical delays include:

1. Incomplete or inaccurate Deed of Sale: Delays can occur if the Deed of Sale is not fully or accurately completed by the buyer, seller, or real estate agent. This document is crucial for the bond application process, and any issues with it will necessitate amendments and reapplication.

2. Failure to provide personal information or FICA documents: Delays can happen if either party does not provide the necessary personal information or FICA documents to the bond and transferring attorneys in a timely manner.

3. Delay in signing bond and transfer documents: If the buyer or seller does not sign the relevant bond and transfer documents as requested by their attorneys, it can cause further delays.

4. Issues with the original title deed: The seller must provide the transferring attorney with the original title deed of the property being sold. If the title deed is lost or destroyed, obtaining a duplicate from the Deeds Office can take up to three weeks.

5. Cash shortfall: Delays can occur due to insufficient funds on the buyer’s side for bond registration and transfer costs or on the seller’s side if the selling price is not enough to settle an outstanding bond.

6. Failure to pay deposit or obtain bond approval: The transfer process can be delayed if the buyer fails to pay the required deposit amount or does not obtain bond approval.

7. Delay in obtaining Transfer Duty receipt: The buyer must pay the transfer costs to the conveyancing attorneys to obtain the Transfer Duty receipt, which is necessary for the conveyancer to lodge a transaction for registration.

8. Delay in bond cancellation: The seller needs to give the bondholder at least 90 days’ notice to cancel their existing bond, which can cause a 3-month delay.

9. Careful coordination and full cooperation from all parties involved are essential for a smooth property transfer process. Having a property law attorney present from the start can help avoid many of these hurdles.

–What are the challenges faced by sellers, landlords, and estate agents when it comes to selling or renting properties?

They have to be knowledgeable in many different fields, including VAT, which can have implications on the asking price, marketing information, the estate agents’ commission and the overall outcome of the transaction which may fall apart because of errors in VAT.

What is the general rule of thumb regarding VAT and property transactions?

If the property is NOT sold as a going concern, then the seller’s VAT status will determine whether VAT or transfer duty will be applicable in the transaction.

What are the requirements for a property to be sold as a going concern (0% VAT payable)?

i) Both the seller and the purchaser as described in the Offer must be registered for VAT;

ii) There must be VATable businesses being conducted at the property which is being sold as part of the property (like a lease); and

iii) the VATable business must also be sold from seller to purchaser.

What happens if the seller and buyer are both VAT vendors but there is no business being sold with the property?

Then the Offer price will have to provide for the 15% VAT which will be paid by the buyer as part of the purchase price. The buyer can then claim back the 15% from SARS as soon as his/her/its business starts operating.

Why do sellers, landlords, and agents prefer to advertise a property excluding VAT?

They prefer it for obvious reasons, such as avoiding a higher asking price, which can affect the property’s marketability.

Can a purchaser insist on an inclusive VAT price even if the property is advertised as exclusive of VAT?

Yes, they can. The seller will have to pay the VAT to SARS, calculated on the selling price, and cannot add it to the asking price. Clarity in respect of the TOTAL PRICE is required though so there are no disagreements later.

Is it legal to advertise a property without VAT or as exclusive of VAT?

No, it is illegal to advertise a property without including VAT. The Value-Added Tax Act 89 of 1991 requires that any price advertised or quoted by a VAT vendor must include VAT.

What happens if a seller, landlord, or estate agent advertises a property as VAT-exclusive?

It is a criminal offense, punishable by law, to advertise VAT-exclusive prices.

Can estate agents add VAT to their commission later on?

No, estate agents earn commission on the sales price ex VAT (so the net sales price) and the agents must then add their own VAT to their commission.

Is it still common practice to advertise properties as VAT-exclusive?

Yes, it is still a common practice, despite being illegal. Sellers, landlords, and estate agents should be aware of the legal requirements regarding VAT and property transactions.

 –When is someone seen as a “swallow”?

• Most foreigners may visit South Africa freely without the need to apply for any VISA prior to entry;
• Most foreigners come to South Africa for holiday and once here, they realise how much they love it here;
• Such visitors, who have NO other VISA in their foreign passports, will arrive at passport control and their foreign passports will simply be stamped with a DATE STAMP;
• This date stamp entitles them to remain in South Africa for a maximum period of 90 days (calender). So there is a start and an expiry date for their visit;
• If the visitor reaches the 90-day period, they must leave the country;
• In order to avoid this complication, visitors are allowed to VISIT HOME AFFAIRS, within the first 30 days of entry to apply for a once-off 90-day extension to the initial period. This renewal application must be done in person and at a Home Affairs Office;
• If the renewal application is not done within the first 30 days of entry, the visitor will have to leave South Africa before the first 90 days expire;
• Many visitors do this 180-continuous days in South Africa on an annual basis (for many years in a row) completely legitimately. These visitors are called SWALLOWS as they follow the sun;
• Swallows (who are tax non-residents and financial non-residents) may borrow up to 50% of the value of the property. The other 50% MUST be paid from abroad with proof of this foreign payment required in order for this bond to register.

Tax Implications for “swallows”

• Visitors who avail themselves of the above, may not work in South Africa;
• This is why these swallows are usually retired;
• In order to work (or earn any form of income, including self-generated income other than rental) in South Africa, the visitor must apply for a temporary residency permit (like a work VISA);
• The temporary VISA application process takes 12 months to issue on average, sometimes even longer;
• Once a temporary VISA is issued, the visitor ceases to be a swallow;
• True swallows, who subsidise their 6 month visit here with income abroad, DO NOT HAVE TO REGISTER FOR INCOME TAX in South Africa. They will also not be seen as TAX RESIDENTS and will therefore not have to declare their foreign income in South Africa;
• Temporary residents however must register for income tax in South Africa and will be seen as tax residents in South Africa for the duration of their VISA. This is dangerous as many do not consider the tax implications of a temporary VISA and are then expected to declare ALL income in South Africa. Often leading to problems;
• Temporary residents may bond up to 75% of the value of their property BUT the 25% balance MUST be paid from abroad and not from South Africa in order for such a bond to register. Also, when the temporary resident leaves South Africa, the bond must be reduced to 50% of the original property value (with payment of cash into the bond) as the temporary resident reverts back to being a non-resident and failure to do this will result in all bank accounts being blocked.

Some important issues to remember when you are a swallow

• To apply for the additional once-off 90 days as soon as you can after first arriving in South Africa;
• NOT TO travel to another country for a short while to just re-enter South Africa (to commence a new 90-day visit). This is frowned upon by both Home Affairs and could lead to serious tax implications if you enter South Africa on multiple occasions in one year;
• If you are physically present in South Africa for more than 180 days, in total, over a year period, SARS will see you as a tax resident even if you do not have a temporary VISA;
• Rental can be earned by swallows at any time without attracting any tax consequences. South African rental is however taxable in • South Africa so swallows will declare rental earned here to SARS annually without the need to declare any other income.

Becoming a permanent resident

• You can apply to Home Affairs for a permanent residency VISA anytime after being a temporary resident for 5 continuous years;
• A permanent residency VSIA application could take up to 12 months (if not longer) to issue so it is important for temporary residents to ensure that their renewal or new permanent residency VISA application is submitted with enough time to spare;
• If their temporary residency VISAs expire before their renewal or permanent residency VISA is issued, they revert back to being a non-resident and must leave South Africa within 90 days after expiry. A big problem if the person is employed here. Such persons will be flagged for entry until the new VISA is issued.
• When your permanent VISA is issued, you are automatically deemed to be a tax resident with the need to submit worldwide income in South Africa. Even if you do not live here! Many people do not consider the tax consequences of this situation;
• The ability to also freely repatriate all funds introduced with submission of proof of these funds falls away after 5-year of the permanent residency VISA. Then such residents become subject to the same excon restrictions as us (R1mil without tax clearance // R4mill with tax clearance);
• Permanent residents may bond up to 100% of the property value with no requirement to introduce any portion of the purchase price from abroad.

When property is bough by more than one person with different status

• A big problem arises when there are two or more buyers who wish to bond a portion of the purchase price and each buyer has a different status;
• For example: a husband and wife where the husband is South African with an ID number and the wife is a non-resident waiting for a temporary residency VISA;
• The purchase price is then split in 2: the husband can bond 100% of his 50% in the property and the wife may bond 50% of her 50% in the property WITH A REQUIREMENT that the rest of the money must be paid by her from her bank account abroad (or a joint account). If there is no proof that the cash balance was paid from abroad, the bond CAN NEVER REGISTER as the excon condition can never be fulfilled.

-The Master will appoint an executor to act on behalf of the deceased estate and to ensure the estate is wound up in accordance with the law. The executor is the only person authorised to sign the Offer to Purchase on behalf of the estate, as well as any transfer documents.

Following an executor being appointed and the OTP being signed, the sale of property from a deceased estate must be authorised by the Master of the High Court. This is done by way of an endorsement of the Power of Attorney to Pass Transfer by the Master. It is the conveyancer’s responsibility to ensure that the Power of Attorney is endorsed by the Master during the transfer process.

In addition to the Master’s consent to sell property belonging to the deceased estate, the consent of all the heirs will need to be provided. It’s worth noting that this may cause a delay in the transfer process as the heirs will need to be located and their written consent will be required to be obtained.

-Most sale agreements of immovable property contain a clause in terms of which the buyer agrees to buy the property voetstoots.

This means that purchaser is buying the property from the seller as it stands and thereby indemnifying the seller against claims for damages in respect of any defects on the property, whether patent or latent.

What you need to know

Sellers cannot rely on the voetstoots clause if they were aware of a latent defect and deliberately concealed or failed to disclose it with the intention to defraud the buyer.

In terms of the Consumer Protection Act the voetstoots clause will not be applicable to a property transaction where the seller is selling the property in the ordinary course of business. This will typically be applicable to developers, builders and investors.

It is important for the parties to a property transaction to familiarise themselves with the impact and exclusions to the voetstoots clause and to carefully read the sale agreement to avoid costly and unnecessary legal battles.

– A latent defect is one which is hidden and not easily seen, such as hidden damp or a leaking pool. A patent defect are those defects that are known and can be seen, such as a broken window or cracked tile.

–An application can be made to the Deeds Office for a duplicate original if a title deed is destroyed or lost. Before an application can be made, the intention to apply for a certified copy must be advertised in a newspaper and lie for inspection at the Deeds Office for 2 weeks. Should there be no objections, the application is made to the Deeds Office in the form of an Affidavit stating that the deed is actually lost or destroyed and that a diligent search has been made for the deed.

Once the Registrar is satisfied he will then issue a certified copy of the title deed which will, for all purposes, be treated as if it were the original. The application for a lost or destroyed deed can be made simultaneously in the Deeds Office with the lodgement of the transfer documents.

-Yes, transfer documents can be signed abroad in line with one of the following methods, depending on the country where you are situated:

• In the presence of the head of the South African diplomatic mission or Consulate, or any designated official for this purpose. After signature, the document must be authenticated by a certificate which bears the official’s seal of office.
• In the presence of a local Notary, who’s seal of office is to be placed on the document in question (applicable to the UK, Zimbabwe, Botswana, Lesotho and Swaziland).
• In countries party to the Hague Convention, in the presence of a Notary Public.

Once signed, the documents must be apostilled by a relevant governmental authority.

–Yes, transfer documents can be signed abroad in line with one of the following methods, depending on the country where you are situated:

• In the presence of the head of the South African diplomatic mission or Consulate, or any designated official for this purpose. After signature, the document must be authenticated by a certificate which bears the official’s seal of office.
• In the presence of a local Notary, who’s seal of office is to be placed on the document in question (applicable to the UK, Zimbabwe, Botswana, Lesotho and Swaziland).
• In countries party to the Hague Convention, in the presence of a Notary Public.

Once signed, the documents must be apostilled by a relevant governmental authority.

– A suspensive condition is a condition that renders an agreement suspensive until such time that the condition which is stipulated is met or fully complied with.

The wording of the condition is crucial. The agreement must be worded that the condition must first be fulfilled or met and until such a time the agreement will not be fully binding and enforceable between the parties. To avoid any confusion, suspensive conditions must be clear and stipulate exactly what must be done and by when.

The most common suspensive conditions and their wording:

• This entire agreement is subject to the Purchaser obtaining a loan of Rx within 30 days of signature of this agreement. In the event that the purchaser does not obtain the required loan the agreement will not be binding and will lapse.
• This agreement is subject to Purchaser selling his/her property known as [address] within a period of [no] days and all suspensive conditions therein being met within [no] days from date of such sale.
• This agreement is subject to the Seller providing a copy of the approved building plans on or before [date].

– One does not know what the future entails and should you sell your property in the future it is recommended to keep the following documentation in a file for such an event.

• Your title deed from the conveyancer – if your property is bonded, the bank will keep the original and a copy should be sent to you by the conveyancer.
• The signed agreement of sale and annexures and the conveyancer’s final statement of account.
• The compliance certificates that were issued when you bought the property.
• Any plans, certifications or guarantees for workmanship.

-While many tasks in sectional title schemes can be delegated to a managing agent, the fiduciary duty remains with the trustees.

The duty of trust or fiduciary duty really means that the person responsible will exercise his powers in good faith and he will not act in his own interest or for another’s gain, but for the members (the owners of the sectional title units) he represents.

Trustees must disclose any conflicts of interest. Section 40(b) of the Sectional Titles Act states that “… a trustee shall avoid any material conflict between his own interests and those of the body corporate, and in particular-

(i) shall not derive any personal economic benefit to which he is not entitled by reason of his office as trustee of the body corporate, from the body corporate, or from any other person in circumstances in which that benefit is obtained in conflict with the interests of the body corporate;

(ii) shall notify every other trustee, at the earliest opportunity practicable in the circumstances, of the nature and extent of any direct or indirect material interest which he may have in any contract of the body corporate.”

If you act on behalf of another you have a duty to act with care. If you do not do this, you can be held liable for the loss suffered by members.

The trustees must, therefore display reasonable care and skill in managing the affairs of the body corporate.

The steps trustees can take to ensure they are qualified to execute their duties are to:

• familiarise themselves with the Sectional Titles Act and their schemes management and conduct rules;

• read one of the many how-to guides about sectional title;

• appoint a competent managing agent on whom they can rely for advice;
• appoint a management company that can help ensure that levies are raised correctly and that levy debt is collected without fear or favour.

A competent board of trustees is the secret to all successful schemes. Only people willing to act in the interest of all members should be elected as trustees. And once they are elected, trustees must equip themselves with the knowledge needed to perform their duties competently. Knowledgeable trustees who steer clear of conflicts of interest can never be accused of having breached their fiduciary duty.

-Before you can obtain information from the deeds office, you must have the following ready:

• Full names and/or identity number of the owner of the property, or at least his or her date of birth. In the case of a juristic person, the name and registration number, if available, is necessary.
• The correct erf number and township or farm name and number, not the street address. In the case of a sectional title scheme, the section, and the scheme name are required.

To obtain a copy of a deed or document from a deeds registry, you must:

• go to any deeds office. It is important to note that deeds registries may not give out information acting on a letter or a telephone call
• An official at the information desk will help you complete the correct form and explain the procedure to you.
• You can now request a search on the property, and pay the required fee at the cashier’s office. The receipt number will be allocated to your copy of title.

-When it comes to the management of a sectional title scheme, the majority of trustees will do an excellent job, but it sometimes makes sense to employ a managing agent to take care of what could be seen as a very time-consuming job.

Trustees do not get paid for the hours that they put into managing their scheme and often have to fit the necessary tasks into an already busy work schedule, whereas managing agents do this work only and are experienced in dealing with all sectional title matters.

If trustees do decide to employ a managing agent, they must ensure that they have written contract stating all the conditions of the appointment.

Prescribed management rules 46 and 47 deal with the appointment of a managing agent, and the cancellation of the contract. These rules deal with the authority to employ an agent, and it is up to the trustees to ensure that the contract complies with the PMR. 

The contract drawn up should include:

• Term of the contract: PMR 46 says that a managing agent’s contract must run for one year and is renewed automatically unless the body corporate notifies him otherwise. There is no notice period specified and the trustees must ensure that this is included in the contract.

• Cancellation: the contract should include the provision to cancel the contract without notice if the managing agent is found to be non-performing of his duties or is in breach of the terms of the contract. The condition should state that he will have no claim against the body corporate should there be a cancellation.

• Revocation: there are three sets of circumstances whereby the contract could be revoked – liquidation or business rescue of the managing agent or his company; if he or any member of his staff have been found to have been convicted of an offense or involved in fraud of any kind; or if the body corporate has taken a special resolution to revoke the appointment. In the last case, however, the managing agent could claim compensation or damages for loss of income.

Before deciding to appoint a managing agent, trustees should ascertain specifically what it is they want the managing agent to take care of. These tasks should be clearly listed in the contract. These duties could include preparing the annual budget; preparing a schedule of insurance for the scheme; dealing with insurance claims; maintaining the common property; accounting and payment of accounts; minutes of meetings and notices to owners; dealing with complaints from owners, and enforcing rules of the scheme.

The key to a successful relationship is to find a good managing agent, one with contactable references and a good track record. The benefits will be that the administration and management work will be done by a professional in this field and by someone who only does this work. In turn, the performance of the body corporate should improve and the financial situation of the scheme will remain healthy.

–Once your solar PV or backup system has been installed, it’s important to ensure that a Certificate of Compliance (CoC) is issued.

This CoC checks that the electrician who performed the installation has complied with the rules and regulations that are in place to assure a safe installation.

Why you need a compliance certificate

As the property owner, you are responsible for the safety of the electrical installation on your property in terms of the OHS Act. According to the Occupational Health and Safety Act, Act 85 of 1993 (OHS Act), the owners of a premise where electricity is consumed need to be in possession of a valid Certificate of Compliance.

Without a valid electrical CoC, you will find it difficult to prove that you have taken reasonable precautions should anything go wrong. Insurance companies might not pay out for damages; and if someone is injured or dies as a result of the installation, you could be held liable as the property owner.

–An offer to purchase can be canceled but it will be extremely costly.

When a buyer cancels an offer to purchase:

• The buyer may lose their deposit.
• The seller may claim damages.
• The buyer will be liable for the agent’s commission.
• If the transfer of the property is already underway, the attorney responsible for it may also claim costs from the buyer.

An offer to purchase is a legally binding document, therefore, you need to be absolutely certain that you can afford to home, and that you want the home.

The seller, similarly, can be sued, or forced to go ahead with the sale.

However, the offer to purchase may include clauses that allow for it to be cancelled under certain conditions. Suspensive conditions that need be fulfilled before the offer to purchase becomes valid can also be included, allowing for the offer to be cancelled if they are met in a certain amount of time.

It is always best to consult an attorney to help determine whether you can cancel the offer to purchase without legal consequences.

-One of the most confusing terms in a sectional title is exclusive use areas (EUAs)

EUAs can be defined as areas that are part of the common property of a scheme for the exclusive use of certain owners. An owner enjoying exclusive rights to an area is responsible for keeping it clean and tidy and pays a levy to the body corporate to cover any maintenance required to the area.

EUAs do not have any participation quota (PQ) value and are not used in calculating quorums or votes at general meetings.

When selling a unit in a sectional title scheme, it is essential to determine whether an exclusive use area needs to be sold along with the section.

The following will help to determine whether there is an exclusive use area when selling a sectional title:

• Perform a person search on the Seller;
• The Title Deed of the property;
• The Sectional Title Plan;
• Check the levy statement.

It may also be allocated in terms of the Management or Conduct Rules of the Scheme which may not reflect in the above searches.

It may be worth asking the Seller or Managing Agents to confirm.

– A beetle compliance certificate is a document that is often included in the Offer To Purchase (OTP) in the Western Cape and Kwazulu-Natal regions that certifies that a property is beetle-free.

In the Western Cape there are three Wood borer Beetles that are commonly specified:

• Anobium Punctatium (commonly known as furniture beetle) – found predominately in wooden flooring
• Hylotrupes Bajules (commonly known as the European house borer) – found predominately in roof trusses, fascia boards and wendy houses
• Oxyplerus Nodieri (commonly known as the longhorn beetle) – found predominately in roof trusses, fascia boards and wendy houses

• The participation quota is the formula used to calculate an owner’s levy contribution in a sectional title scheme.

  It is calculated by dividing the number of square metres occupied by the owner’s section by the total floor area of all sections.

-Domicilium citandi et executandi is a Latin term. In English, this means “place of summons and execution.”

The general meaning thereof can be explained as the address which the party nominates where he receives all legal documents and notices.

-The Deeds Office is responsible for the registration, management, and maintenance of the property registry of South Africa.

You can get information from the deeds registry on the following:

• the registered owner of a property
• the conditions affecting such property
• interdicts and contracts in respect of the property
• purchase price of the property
• rules of a sectional title scheme
• a copy of an antenuptial contract (ANC), deeds of servitude, mortgage bonds, etc.
• a copy of a sectional title plan or the rules of a Sectional

It also keeps copies of antenuptial contracts.

– A Certificate of Compliance (COC) is a document that verifies that the electrical installations such as the plugs, lights, DB-board, geyser, and wiring in a home comply with the legislated requirements as detailed in the Occupational Health and Safety Act.

The onus has been placed on the homeowner (seller) to ensure that a faulty or non-compliant electrical installation in his / her house does not pose a threat through fire or electrocution to any person, animal, or property. Without a valid COC, should an injury or incident occur, the homeowner could be held liable and the insurance on the house could be declared invalid.

The electrical certificate covers the permanent electrical installation which includes:

• all the cables from the mains incoming point to the main distribution board;
• everything in the main distribution board and any sub-boards, circuit breakers, earth leakage, etc. ;
• all the cabling from the distribution boards to switches and plugs, including the wall plugs and light switches, through to the connection at the lights;
• all circuits and wiring to any fixed appliances, even if they are plugged into a wall socket, but it does not include the actual appliance itself;
• the earthing system and connectivity throughout the installation;

positioning of electrical equipment, e.g. light switches and plugs may not be within a certain distance of taps, shower, baths, etc.;

mains switch must be accessible and within a certain height from the floor in case of emergencies;

• all electrical equipment in the installation must be approved, SABS or other relevant approvals, and be of the correct type and rating for the application;

• all electrical equipment must be installed in an approved manner, must be securely attached in place and suitably protected from little fingers gaining access;
• all parts of the permanent electrical installation must be in good working order, including safety features;
• the electrician will also take various readings to ensure that Voltages, insulation, earthing and other values are within requirements.

 -When selling your property, the conveyancer will obtain a rates clearance certificate (RCC) from the local municipality before transfer of the property can take place. This document certifies that there are no outstanding rates due on the property on the seller’s account.

Why is a rates clearance certificate necessary?

The RCC certifies that the seller does not owe any money to the municipality for the two year period before the date of application for the RCC. The Deeds office in turn will not transfer a property from the seller to the buyer unless the conveyancer presents a legitimate RCC when lodging the documents.

It is necessary to obtain a rates clearance certificate for freehold property and sectional title property.

Payment of outstanding rates

After the conveyancer requested the rates clearance figures from the relevant City Council, sellers will pay any arrears including rates, taxes, electricity, water, sewerage and refuse. Also included is an advance portion.

This advance payment is law and is calculated after The City Council issues figures for rates and taxes, electricity, water, sewerage and refuse. This advance payment is for a period of 60 days. The City Council gives the seller 1-2 months to pay and thereafter the RCC is valid for the 60 day period. Should the amount not be paid in time and the figures expire, new figures will need to be requested.

It is important to note that the seller will be responsible for all accounts opened in respect of the property sold, even if accounts were opened by tenants.

Whose responsibility is it to obtain a rates clearance certificate?

It is the seller’s responsibility to settle amounts due in order to obtain the RCC. The seller must pay the conveyancer (and not the City Council directly). The conveyancer will then pay the City Council as they require rates figures to be paid with a trust cheque. The RCC must be obtained and paid for before the lodging of transfer documents in the Deeds Office.

Sellers should let the conveyancer have copies of all municipal accounts to expedite the application process.

When does the seller get a refund from the city council and how?

After the property has been registered and the municipal charges have been transferred to the buyer’s account, there is usually an amount in credit due to the seller. The Council takes approximately 6 to 9 months to reconcile the seller’s and purchaser’s accounts and pay the refund.

As the seller, you should expressly request a refund from the municipality, as this does not happen automatically. You will have to complete a refund application wherein your banking or postal details are specified and this is usually signed with the transferring attorneys.

The Council will thereafter provide you with payment of the refund directly in due course.

– The South African Revenue Service (SARS) is the revenue service (tax-collecting agency) of the South African government. It was established by legislation to collect revenue and ensure compliance with tax law.

– A waiver of builder’s lien is signed by the builder to ensure that in the event of the builder absconding the site, that he has renounced, waived and abandoned all his rights, title and interest in and to any lien or right of retention which he may have in regard to certain building and/or structures and/or improvements/materials on site

-The terms and conditions that the seller and the buyer MUST agree on are:

• Identity of the seller and the buyer: by including their names, identity numbers, addresses and/or marital statuses.
• Description of the property being sold by the seller: by including the deeds office’s description, size, and/or street address of the property being sold.
• Purchase price of the property payable by the buyer: by including how the property is going to be paid by the buyer, for example, in cash or by obtaining a loan, and whether or not a deposit is payable. If a deposit is payable, the deposit must be held in an interest bearing trust account by the conveyancer (the attorney instructed to transfer the property). If the purchase price is R250 000 or less, a cooling-off period of five working days will apply.

The terms and conditions that the seller and the buyer MAY also agree on are, for example:

• Fixtures and fittings: anything else included in the sale of the property must be specified, for example, a tool-shed, curtains, remotes and so on.
• Conveyancer: details of the conveyancer handling the transfer. Usually the seller decides on a conveyancer, however, the seller and the buyer may also agree on a conveyancer.
• Costs: person responsible for certain costs relating to the transfer of the property, for example, obtaining a clearance certificate, transfer duty or value added tax and so on. The buyer and the seller are usually responsible for their own costs relating to obtaining, or cancelling of, a loan for the property.
• Occupation: the date of occupation by the buyer (on registration or a specified date before or after registration of the property into the buyer’s name) and the amount of occupational rent payable by the seller or the buyer, if any.
• Voetstoots: when a property is sold “as is” (current condition). The defects or possible defects must be disclosed to the buyer to avoid liability for damages.
• Estate agent: name of the estate agent and the amount of commission payable, if any. The commission is negotiable between the seller and the estate agent.
• Certificates: the seller must provide, at his/her costs, an electrical compliance certificate, electrical fence certificate, pest control certificate and/or a gas compliance certificate.
• Suspensive conditions: for example, whether the sale is subject to the buyer obtaining a loan within an agreed period of time. The sale cannot proceed until all the suspensive conditions have been met.
• Breach: what will happen if the seller or the buyer does not comply with the sale agreement, for example, if the buyer breaches the agreement of sale, the seller will notify the buyer to fix the breach within seven days. If the buyer does not fix the breach, the seller will be entitled to proceed with a claim for performance in court or cancel the sale agreement and proceed with a claim for damages in court.

– Complaints against estate agents may be lodged with the Estate Agency Affairs Board. For example, when the estate agent listed the seller’s property at a different price than agreed upon.

The Estate Agency Affairs Board will conduct an investigation and may conduct a hearing. If found guilty, the estate agent may be fined, reprimanded, or his/her fidelity fund certificate may be withdrawn. An estate agent without a fidelity fund certificate is not entitled to payment of commission.

The contact details of the Estate Agency Affairs Board are:

• Telephone number: 087 285 3222
• Website address: www.eaab.org.za

– A certificate issued by a registered person stating that the property is free of infestation of wood destroying insects or fungi.

–A homeowner’s association (HOA) is usually created by a restrictive condition contained in a title deed or by agreement of homeowners.

Typical aspects of homeowners’ associations:

• HOA’s are generally found in closed-off/boomed areas
• Owner of the property within the HOA will be liable for levies used for general upkeep of common areas.
• The HOA may also in terms of its incorporation documents enforce rules upon the members
• Purchasers will be required to become a member of the HOA
• Purchasers will automatically become a member of the HOA on the day of transfer and will cease to be a member on the transfer of the property to a new owner

It is important to inform purchasers that they will be required to become a member of the HOA, liable for levies and subject to its rules when purchasing a property that forms part of a HOA

by Nathan van Zyl from Kruger Attorneys & Conveyancers Inc

-Where a Purchaser wishes to sell his current property when buying another property, make sure to note this in both Offers to Purchase (where the Purchaser is buying and where the Purchaser is selling).

This will ensure that all parties involved in both transactions are aware and understand that the two transactions must run concurrently and must register simultaneously in the Deeds Office.

This will undoubtedly assist in occupation dates being properly aligned.

By Helené-Mari Smith from Kruger Attorneys & Conveyancers Inc

– Compliance certificates to be obtained by a seller of immovable property include:

Electrical Compliance Certificate – An electrical certificate is valid for 2 years and must be obtained where ownership changes.

Electrical Fence Certificate – Must be obtained when there is a change in ownership of a property or if there was an alteration done to the fence.

Entomologist Certificate – Only applicable in coastal provinces to ensure that the property is free from wood-destroying insects.

Plumbing Installation Certificate – Only applicable in the Western Cape to ensure that the installation is in line with the plumbing regulations.

Gas Conformity Certificate of Compliance – Must be obtained if there are any gas appliances installed on the property

Morne Sauer from Kruger Attorneys & Conveyancers Inc

–Married in community of property

• Joint estate
• Spouses are required to sign the Offer to Purchase, alternatively, a spouse can consent to the other signing when Selling or Buying a Property.

Q: one spouse acquired property prior to the marriage, and subsequently gets married in community of property, who owns the Property?

A: The new spouse automatically becomes a co-owner of the property and no transfer is required.

Married out of community of property

• Individual estates
• Spouses may Buy or Sell Property in their own names, the signature of the other spouse is not required.

Q: If the one spouse bought property, prior to the marriage out of community of property, who does it belong to?

A: The individual estate of the Spouse who bought the property.

It is important to know the marital regime of Parties when buying or selling of Property to ensure a valid OTP.

By Chana Finger from Kruger Attorneys & Conveyancers Inc

–The duty to disclose

There is a duty on the Seller to make certain disclosures. Whilst the Seller is not legally obligated to disclose obvious or known defects (patent), the Seller does have a duty to disclose all defects which are not obvious (latent) which he/she is aware of.

Interestingly, the Purchaser also has a responsibility to properly inspect the property and acquaint him/herself with the condition of the property. The Purchaser cannot rely on the Seller’s disclosure alone.

There is also a duty on the Estate Agent to disclose any facts (including defects) which is set out in the Estate Agency Affairs Board Code of Conduct which states:

1. The Estate Agent must disclose any facts which are within the Agent’s knowledge;

2. The Estate Agent must disclose any facts which should be within the Agent’s knowledge;

3. The Estate Agent must disclose any facts which are material to the Purchaser;

4. The Estate Agent must disclose any facts which could be material to the Purchaser.

Christiaan Fullagar for Kruger Attorneys & Conveyancers Inc

– The Trustees of a Trust need to have Letters of Authority issued by the Master of the High Court prior to the sale agreement being entered into. The Trustees cannot enter into a sale agreement without the letters of authority being issued.

The Trustees will also have to sign a Resolution prior to entering into an Offer To Purchase (OTP) to agree to the sale/purchase of the property or all Trustees must sign the OTP.

Another aspect to consider is FICA requirements for a Trust. FICA will need to be collected for the Donor, the Trustees and the Beneficiaries.

(Article by Damian Sequeira from Kruger Attorneys & Conveyancers Inc)

–In order to sell a property from a deceased estate one needs to know the gross value of the Estate. An Executor of an Estate can only enter into a sale agreement once the Letters of Executorship/Authority have been issued by the Master of the High Court.

Letters of Authority are issued in Estates with a cumulative value of less than R250,000.00 and Letters of Executorship in Estates with values above R250 000.00.

Regardless of the value of the Estate, only the Executor appointed by the Master has authority to deal with any assets of the Estate.

It is important to note that depending on the progress made in reporting the Estate to the Master of the High Court and the administration thereof, the transfer can be protracted due to requirements not yet fulfilled.

( Article by by Jack Bonner from Kruger Attorneys & Conveyancers Inc )

– When selling a property, the regulations of the Occupational Health and Safety Act expressly provide that the seller must provide a valid Electrical Compliance Certificate (also known as a “COC” or “ECC”).

Some reasons to obtain a COC which covers the electrical installation of the property include:

• Electrical circuits in a property are required to be properly earthed for safety reasons.
• The bank issuing a home loan, will require a COC as an additional requirement to ensure that the Property which it is providing a home loan for and that the asset which forms the basis of their security is safe and compliant.
• Without a valid COC, insurance may in certain instances refuse to pay out a claim for damage to property relating to, for example an electrical fault.

A COC is valid for 2 (two) years from date of issue, provided that no repairs, changes or additions to the electrical installation have been made.

By Chana Finger for Kruger Attorneys & Conveyancers Inc

– Conveyancing Attorneys need to verify and confirm your details to ensure that the documents lodged at the Deeds Office are correct. These details include your name/s, identity number as well as your marital status. The above documents are therefore required as proof and confirmation of your marital status.

-Yes, but there are different requirements to be met depending on who you are signing on behalf of.

You may sign on behalf of :

• another Individual when authorized by a Special or General

Power of Attorney

• a Close Corporation, Company, Trust or other juristic entity when authorized by a Resolution of the Members/Directors/ Trustees/Board
• an Estate Late when appointed as Representative/Executor by the Master of the High Court

It is important to note that when signing transfer documents by virtue of Powers of Attorney, there are specific requirements which must be met to be valid for acceptance by the Deeds Office. You should consult a Conveyancer to draft the necessary Resolutions / Powers of Attorney for you, before signing any Offer to Purchase, to ensure it is valid and acceptable.

– Yes, both spouses or partners need to sign the sale agreement and transfer documents if married in community of property.

 – If the property is registered in both parties’ names, then both must sign the sale agreement and transfer documents as they both are equal owners. If, however only one spouse owns the property then only he/she needs to sign the sale agreement and transfer documents irrespective of the marriage arrangement.

– The Property Practitioners Bill was signed into law in 2019 by President Cyril Ramaphosa. The Bill will henceforth be known as Act 22 of 2019.

Act 22 of 2019 aims to provide more transparency in the real estate industry, better regulation of property practitioners, more opportunities for transformation as well as the establishment of a transformation fund.

Furthermore, the Act also provides for consumer protection, compliance with, and enforcement of the provisions of the Act.

The act will come into operation on February 1st 2022

More about Act 22 of 2019

– Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party.

-A gas compliance certificate warrants that any gas appliances present on the property are safe according to the applicable standards.

Such a certificate must be obtained whenever a gas appliance is installed, altered or modified and, most importantly, upon any change of ownership of the property.

Here is what you need to know about changes to how and by whom gas compliance certificates can be issued

-An electric fence compliance certificate (EFCC) is required by South African law when selling your house. to ensure that the installation is compliant and safe. An incorrectly installed or faulty installation is hazardous and the homeowner could be held liable in the event of an injury.

The certificate is required where:

– there is a change in ownership of a property after 1 October 2012 at which property there is an electric fence; or

– there was no change of ownership but there has been an alteration or modification to an electric fence after 1 October 2012, even if it was installed before 1 October 2012.

This is only if the electric fence forms part of the property being sold and not a communal system in which case it will be the responsibility of the Body Corporate and not the individual property owner as the electric fence is shared by multiple property owners.

What is the legal requirements of the EFCC?

This is governed by Regulation 12(4) of the Electrical Machinery Regulations which were promulgated in terms of the Occupational Health & Safety Act (No. 181 of 1993).

This is a separate certificate from the Electrical COC since it falls under the provisions of a separate set of regulations and the EFC cannot be issued by an electrician. Only a person accredited by the Department of Labour and issued by the chief inspector as an electrical fence installer, may issue a C.O.C for an electric fence installation.

What is the validity period of the EFCC?

There is no mention in the legislation of the certificate being valid for a fixed time period once issued (unlike electrical certificates) and once obtained it can be transferred from one owner to the next provided of course the agreement of sale does not specify a time period and provided there were no alterations to the installation after the certificate was issued.

It is however accepted practice that the certificate is valid for 2 years from the date of issue.

What does an Electrical Fence Compliance Certificate Cost?

If the installation is compliant, the electrical fence system installer / inspector will issue a certificate at no additional cost to the inspection fee.

If the installation does not meet the regulations and standards, the inspector will report on the items and quote you on any necessary repairs.

If you accept the quotation they will arrange an appointment for the repairs to be done.

What is checked during an Electrical Fence Compliance Inspection?

Fences erected prior to 1 December 2012:

The Electrical Fence Compliance Certificate ensures that the fence:

– Is in good working order

– Cannot be easily touched by accident

– Complies with electric fence legislation at the time the fence was installed

– Electric fence owners can ensure that the fence is in good working order by conducting general maintenance on such electric fences.

The maintenance generally consists of clearing the fence of all vegetation and debris that could cause high-voltage pulses and that could lower the effectiveness of the fence, tightening wires that are visibly slackened and fixing all broken parts of the fence

Fences erected after 1 December 2012:

– Have to comply with the Electrical Security Installations Regulations (SANS 10222-3:2012) which provides for:

Wall Height: Minimum wall height of private property to be secured – 1.5 metres.

Brackets: Upright brackets may be used without any height restriction.

Angled brackets: Brackets can be angled at no more than 45 degrees out and are to be installed on the inside of the boundary wall.

Neighbours: It is not permissible to angle brackets into a neighbour’s property without their knowledge or consent.

Hazard: Electrified fences are to be installed and operated so that they cause no electrical hazard or entanglement to persons or animals.

Barbed wire or razor wire: These shall not be electrified by an energiser.

Warning Signs: Electric fencing installed along a public road or pathway shall be securely identified with YELLOW WARNING SIGNS (100 x 200 cm) at intervals not exceeding 10 meters. All gates and access points to have warning signs.

Electrified Gates: To be capable of being opened/closed without the person receiving a shock.

Distance between posts: Maximum of 3m between posts.

Earth spike: Needs to be installed every 30m. Minimum of 3 is regulatory as is lighting protection at the energiser.

Conductors (wires): Need to be terminated correctly with a ferrule or solder.

What is the procedure in obtaining an EFCC?

The regulations does not stipulate which party (buyer or seller) is responsible to obtain the certificate – and it is up to the parties to negotiate the matter of certification as well as the cost thereof.

In practice it often happens that this obligation falls to the seller in the same way as with electrical and gas certification. However, the Occupational Health and Safety Act does allow this undertaking to be transferred. Therefore a clause can be included in the sale agreement which relieves the seller of his responsibility to get certification and places an obligation on the purchaser to ensure that the system is certified as compliant at the cost of the purchaser. This may be particularly relevant where the seller is exempted from obtaining a certificate and that responsibility falls to the purchaser who wishes to use the electric fence.

Should the seller instructs a company to carry out an inspection, he/she must take care to ensure that the company has liability insurance should something go wrong, otherwise the seller may still be responsible once the buyers have moved in.

Who is responsible for Electrical Fence Compliance Certificates in Sectional Title Schemes and Gated Estates?

With sectional title properties, the electric fence is generally situated on the common property which is deemed to be body corporate property. Every owner of a section within a sectional scheme is also a member of the body corporate and is also therefore an undivided part share owner in the common property. Abrahams & Gross Attorneys is of the opinion that when a sectional unit is transferred there is also a change of ownership (even though only in part share) of the common property, and as a result of the change of ownership of property on which the electric fence is situated it will be necessary to comply with these regulations. Given that the management of common property falls within the duties of the body corporate, they are of the opinion that it is adequate for the body corporate to have a compliance certificate issued for the electric fence of the entire scheme which can be produced as and when called upon to do so. The body corporate should have a new certificate issued every time there are alterations done but it would not be necessary to have a new certificate issued every time there is a transfer within the scheme.

What happens within a gated estate that is not sectional title but free-standing erven where part of the fence is on the erf transferred (commonly referred to as home owners’ associations)?

As discussed above, the compliance with the regulations is triggered when there is a change in ownership of property on which an electric fence installation exists. Technically where there is a change in ownership of property within a home owner’s association on which an electric fence exists (typically your perimeter properties) then a certificate would need to be issued or be in place. It does however seem unfair that all of the members of a home owners association benefit from an electric fence, but only those properties on which the actual fence is built would need to have the certificate issued. As a result, A & G Attorneys view is that as in sectional schemes it would be more practical for the home owner’s association to have a certificate issued for the entire electric fence installation which can be produced as and when required in transfers.

-When a Company enters into an Offer to purchase , the representative thereof, usually a Director, needs to be authorised by way of resolution to enter into the agreement prior to the signing of the agreement.

Alternatively, the representative can enter into the agreement but the Company will need to pass a resolution ratifying its acceptance of the sale agreement.

If a company is selling a property it is imperative to determine whether the property is a major asset of the Company. If this is the case, the Shareholders of the company need to also consent to the sale of the property.

(Article by by Nathan van Zyl from Kruger Attorneys & Conveyancers Inc)