FAQ On buying/selling property

By Anneme Van Berge

1. I want to sell my property. Where do I start?

  • The best starting point is to do market research regarding the selling price of similar
    properties in your area. You can also obtain a municipal- and/or Estate Agent Valuation. This
    will be a guideline to decide on a competitive selling price for your property;
  • If you don’t want to sell your property privately, you can appoint an Estate Agent/s in your
    area to market and introduce prospective buyers to your property;
  • You can appoint more than one Estate Agent by giving different Agencies open mandates. If
    you give a sole mandate to an Agency, they have the exclusive right to market your
    property;
  •  A prospective buyer will negotiate with the Estate Agent and make an offer on the property.
  • The Purchaser will complete the Offer to Purchase which will be sent to you to accept or
    reject.
  • If you accept the offer, the documents are sent to the Conveyancer and Financial Institutions
    to proceed with the Conveyancing Process.

If you want to sell your property privately, and already have an interested buyer, contact
us and we will assist you with the Offer to Purchase.

2. What is an Offer to Purchase?

The offer to purchase is an agreement between the Seller and Purchaser, which sets out the
terms and conditions of the property sale transaction. Before signing the agreement the
parties must agree on all terms and conditions and make sure they understand each clause
as well as their obligations towards each other. The parties must stipulate every condition in
the contract to avoid any misunderstandings that can cause the process to be delayed. Once
the agreement is signed by both parties it becomes a legal and binding document.

3. What are the requirements for a Deed of Sale/Offer to Purchase?

The ALIENATION OF LAND ACT 68 OF 1981 provides in section 2(1) that the alienation of land
is only valid if it is contained in a deed of alienation and signed by both parties (or their duly
authorised agents). A verbal agreement is not enforceable.
The requirements are thus that a valid agreement of sale must:
a) Be in writing
– description of both parties;
– description of property;
– purchase price.
b) Signed by both parties to the agreement
-An agent who has power of attorney can also sign on behalf of a party but such agent must
provide written authority to do so.

4. What is conveyancing and why do I need a Conveyancer to transfer my property?

Conveyancing is the legal process in terms of which rights in immovable property are
registered in the Deeds Office. The conveyancing process begins with the Deed of Sale and
continues through to the ultimate registration of ownership.
A Conveyancer is an admitted Attorney who passed the conveyancing exam and has also
been admitted as a Conveyancer in the High Court of South Africa.
Only a Conveyancer may prepare, sign and register the transfer of immovable property,
mortgage bonds and the execution of other acts regarding immovable property which are
registrable in a Deeds Office.

5. What is FICA

The Financial Intelligence Centre Act (“FICA”) is anti-money laundering legislation that was
introduced in South Africa in 2003. The aim of the act is to stop money laundering and to
identify and prosecute all those involved in such activities.
Every Attorney’s firm is an accountable institution according to FICA, and is thus required to
verify the identity of every Seller and Purchaser.
FICA requirements are set out below:
a) The individual:
1. Identity document and/or passport;
2. Proof of residential address (not older than 3 months)
3. Income tax registration number;
4. Marriage Certificate
5. Proof of Banking details
b) Trusts
1. Trust deed or other founding document
2. Letter of authority from the Master of the High Court
3. Trustees’ resolution
4. Identity document, physical residential address and contact details of each trustee, each beneficiary, the founder and the persons authorised to act
c) Closed Corporations
1. Founding Statement and Certificate of Incorporation (CK1)
2. Authority to act
3. Members’ resolution
4. Identity document, physical residential address and contact details of each member
5. Proof of physical business address
d) Companies
1. Registration certificate
2. Authority to act : directors’ resolution
3. Identity document of persons authorised to act
e) Deceased estates
1. Letter of Executorship/Letter of Authority
2. Authority to act: special power of attorney
3. Identity document, details of physical residential address and contact details of persons authorised to act

6. Who are the parties involved?

Appointed
by
Paid by Legal
documents
to be signed
by
FICA
required
Responsible for:
ESTATE AGENT Seller Seller Seller and Purchaser Yes Deed of Sale
TRANSFERRING ATTORNEY Seller Purchaser Seller and
Purchaser
Yes Registration
of Deed of
Transfer
BOND ATTORNEY Bank who
grants the bond
Purchaser Purchaser Yes Registration
of Mortgage
Bond
BOND
CANCELLATION
ATTORNEY
Bank who
is the
existing
bondholder
Seller Conveyancer
representing
bank
Yes Cancellation of existing
bond.

 

 

 

7. Who pays what

SELLER PURCHASER
Outstanding bond amount Purchase price
Rates account (outstanding + advance) Transfer costs and disbursements to transferring attorney
Compliance certificates Bond Costs to Registration Attorneys
Estate Agent’s Commission Transfer duty
Bond Cancellation Attorneys Occupational rent (if applicable)
Home Owners association Compliance
Body Corporate Levy Compliance

 

8. How long does the process take?

The process takes approximately 2-3 months if all parties cooperate and fulfil their contractual
obligations.

9. What can cause delays?

– Bond Approval – The Purchaser must ensure that all necessary documentation are
given to the bank or bond originator;
– Rates Clearance Certificates;
– Levy Clearance Certificates / Home Owner Association Certificates
– Shortfalls on bonds;
– Transfer Duty payment;
– Tenants
– Evictions;
– Seller or Purchaser outside of South Africa
– Special conditions in Deed of Sale
– Compliance Certificates
– Deceased Estates

10. What is transfer duty?

Transfer Duty is a tax levied on the value of any property acquired by any person by way of a
transaction or in any other way. For the purpose of Transfer Duty, property means land and fixtures
and includes real rights in land, rights to minerals, a share or interest in a “residential property
company” or a share in a share-block company. Transfer duty is payable by the Purchaser.

11. What happens in the deeds office?

– Lodgement of deeds at the deeds office;
–   Deeds office personnel capture all the necessary data;
– Deeds are sent to the sorting room where it will be distributed to examiners;
– The examination process is done by a Junior and Senior examiner and monitored by the
Assistant Registrar (each of the examiners takes approximately 2 days to examine deeds);
– The deeds are passed or rejected;
– Rejected deeds are thrown out and passed deeds will be distributed to the Preparation
stage;
–       The Conveyancer have 5 days to prepare deeds. If everything is in order, the deeds can be
handed in for registration;
– A final check is done before the deeds are taken to the execution room.
–       Registration/ Execution takes place.