You have accepted a great offer, your home is sold, congratulations! What happens next?
Here are some tips from a Conveyancing Attorney to help you with the next step, the transfer phase:
1. Why, if the buyer of a property is paying the conveyancing attorney, does the seller has the right to appoint him?
The most common answer is that it is logical because in a property transaction the seller is far more at risk than the buyer. Most conveyancers’ fees are similar due to the fact that they are prescribed and regulated by the law societies of the region in which the property is situated, however, it is not uncommon for the buyer to ask for a specific conveyancer to be appointed and this is possible if both parties agree.
2. How long does the transfer process take?
There is no specific timeline on registration of property, each file is unique. The registration process should be take as long as the factors involved in the registration. The parties should remember that it is not only the transferring attorney involved in registration and therefore a lot of factors involved. We require cancellation figures from the bond holder, rates figures from the council, levy figures from the managing agents / body corporate (if applicable), guarantees securing the purchase price from the bond attorneys, transfer duty receipt from SARS.
3. If specified in the agreement of sale, that the purchaser has to pay a deposit, what happens with the deposit should the bond be declined?
The deposit together with interest earned on the deposit is refundable to the purchaser as the approval of the bond is a suspensive condition of the agreement of sale.
4. Should the purchaser not adhere to the requirements in terms of the agreement of sale ie. Late payment of deposit, non payment of costs on demand or guarantees not issued timeously. What happens in the above circumstances?
The purchaser can then be placed on terms for beach of the agreement and become liable for payment of agent’s commission, damages claimed by the Seller as well as wasted costs charged by the attorneys should he not remedy his breach within the specified time period.
5. If there is no occupation date specified on the offer to purchase, when do the parties prepare to move?
The parties should be updated on the progress of their file by the transferring attorneys on a regular basis. The general stipulation in the agreement of sale will be by 12 noon on date of registration but the parties should be in constant contact with their agent to assist with arrangements between the Seller and Purchaser. For instance should the Seller move on date of registration and same fall on a Wednesday but they are only able to move on the Saturday then the agent and transferring attorneys can arrange with the purchaser if they consent that the Seller pays occupational rental for 3 days to the purchaser and therefore co-ordinate the move.
6. Should the purchaser take early occupation, are they liable for payment of the rates, water and electricity?
The agreement of sale and / or addendum to the agreement will be quite specific on who will be liable for the above charges. In general the Seller will remain liable for payment of the rates and taxes on the property and the Purchaser will become liable for the water and electricity as they are enjoying the usage of same.
7. Why should the parties send FICA documents to the transferring attorneys if they have already provided same to the agent and / or mortgage originator?
As per the FICA act all accountable institutions have to keep their own record of valid FICA documents and therefore the parties will be requested to provide same to not just one requester, but to all.
8. How long is the electrical compliance certificate valid for and who’s responsibility is it to obtain same?
The Electrical Compliance Certificate is valid for 2 years, only if there has not been any alterations to the electrical wiring of the property. The norm is that it is the Seller’s responsibility to price same unless otherwise specified in the agreement. The law has also been amended to include that the transferring attorneys will require an electric fence certificate and gas compliance certificate (if applicable).
9. Why is there a Voetstoots clause and what does it mean?
The Purchaser should at all times specify in the agreement of sale should they notice any defects on the property that they require the Seller to attend to prior to registration. If not specified in the agreement, the voetstoots clause will take effect and the purchaser will not have a claim against the Seller. The voetstoots clause means that you purchase the property in the state that you viewed same (as is).
10. Why can’t the attorneys deduct rates & levies amounts from proceeds of the Sale?
As the figures need to be paid upfront to obtain the certificates required by the deeds office, we cannot deduct same from the proceeds. We can however apply for bridging finance on your behalf, note there will be interest charges from the bridging company.
11. What are the turnaround times for Transfer Duty applications to be processed?
The turnaround times for Transfer Duty is five (5) – ten (10) working days from the date that the application appears on the SARS Administration site as awaiting authorization.
12. Is Transfer duty refundable?
No, The Receiver of revenue requires payment of transfer duty on the purchase of property and same is not refundable.
13. Which party determines whether a transaction would be subject to VAT or Transfer Duty?
The seller’ status determines whether a transaction would be subject to VAT or Transfer Duty.
Thanks to the contribution by Johan van Heerden (Dykes van Heerden Attorneys) – http://dvh.law.za/
Need some property advice or looking for an good agent to sell your home. Contact Donna now.