select
|

The legal ins and outs of property purchases

Buying a home is a complex business, with a range of legal aspects to be considered before you even sign an offer to purchase. Here is a step-by-step guide to your legal obligations and rights at each stage of a property purchase.

1. Making the offer

If you laid your eyes on the home of your dreams while house-hunting and you're ready to make an offer, make an appointment to inspect the property thoroughly.

Ask the current owners (or their agent) if there is anything that would hinder the transfer process. If you're happy that the property is unencumbered, sit down with the estate agent to sign an offer to purchase.

2. Signing the offer to purchase

All contracts for the buying and selling of properties must be in writing, contain certain information, and be signed by both buyer and seller to be binding.

Typically, you'll sign an offer to purchase, which will become an agreement of sale if the seller accepts your offer. Once you've made an offer to purchase, you are bound by it if the seller accepts your offer.

These contracts are fairly standard in their content and structure, but you're advised to get advice from an independent lawyer if you are buying a property for the first time to ensure you understand the implications of the documents you are signing.

It is worth noting that the Consumer Protection Act, which will come into play on 1 April, forces agents to ensure property sellers and buyers understand the wording and legal effect of all contracts they enter into. Agents will also not be able to use the "voetstoots" clause in most agreements of sale as a defense for non-disclosure of information about faults and flaws in the property.

3. Effecting the transfer

The registration of a property transaction is handled by a legal practitioner known as a conveyancer, who is usually appointed by the seller. The buyer is usually responsible for the conveyancer's fees as well as for transfer duties paid to the government.

The conveyancer prepares the documentation that is lodged with the Deeds Office to effect the transfer of the property to the new owner. A conveyancer appointed by your bank will register your bond with the Deeds Office. A separate law firm will cancel the owner's bond on the property with the Deeds Office.

You will be registered as the new owner of the property and your deposit and money from your bond will be paid to the seller (or the seller's bank, if he or she has a mortgage).

You will usually need to personally sign documents with the various conveyancing firms. If you live abroad, you may be able to grant a general power of attorney to someone who can sign on your behalf.

4. What about the deposit?

A deposit is not mandatory, but is a sign of good faith and also serves as an indication of financial ability to the seller and the bank granting your bond. (In present climate many sellers are struggling to secure bonds without a deposit of at least 10% of the property's purchasing price).

To safeguard your deposit in, ensure that it is paid to the conveyancer handling the transfer rather than to the estate agent. All attorneys are covered by a Fidelity Fund which guards against theft or negligence by attorneys. You can claim from this insurance if the attorney is unable to come up with the money when it is due to the buyer (or due to be returned to you because the transfer falls through).

Until the transfer goes through, the money will be held in an interest-bearing account. The interest will be paid over to you once transfer takes place.

5. Taking occupation

By mutual agreement with the seller, you can take occupation of the property before the transfer is affected. At this point, you usually assume all risks and responsibilities associated with the property. If you take occupation before the transfer takes place, you will pay a monthly rent at a rate that both parties have agreed to.

There are a number of potential pitfalls to look out for when buying a new home and a mistake can cost you dearly. If you have any concerns about your prospective purchase, seek legal advice to ensure that you make informed decisions throughout the process.

(Yusuf Boda - Legal & Tax Press Release)


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 24 Apr 2018
      The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    • 19 Apr 2018
      The rental market is a cut-throat sector of the real estate market that waits for nobody. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, first-time renters need to be fully prepared before they even start the process of looking for a place to rent in order to avoid the disappointment of losing out on their ideal property.
    • 19 Apr 2018
      Choosing to buy your first home instead of continuing to rent is a big decision that will usually take some time to put into action, but the sooner you can save up a sizeable deposit, the closer you will be to reaching your goal.
    • 18 Apr 2018
      Selling your home is no small task and as you will quickly find out, there are a lot of misconceptions about the process. Gerhard van der Linde, Seeff's MD in Pretoria East lists the top 5 misconceptions when you are selling your home.
    • 18 Apr 2018
      The Cape Town municipality is now installing water-management devices at properties that have been non-compliant with the new level 5 water restrictions and there are talks of fines between R5,000 and R10,000 for households that use too much water.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK