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What happens if there's an interdict on a property for sale?

The Institute of Estate Agents, Western Cape, is often called in to assist when buyers, sellers and estate agents experience problems and they, in turn, says Annette Evans, regional manager of the Institute, will enlist the help of specialists in that particular field to answer any questions or deal with queries.

One query in particular that has come up recently, said Evans, is whether an estate agent is responsible for checking whether the seller's property has any interdicts over it.
 
With the crash of the property market very recently the above question has become more and more relevant, says Storme Heath, a director at C & A Friedlander Attorneys who often sponsor training sessions and events held by the Institute.

'All around us we see boards affixed to the gates of properties, alerting us to an upcoming auction to be held on these properties. It seems that properties in a broad spectrum, from Salt River to upper end Constantia homes, have been affected by the fall in the economy,' she said.

For a property to be put on auction, it is necessary for the judgement creditor (i.e. the bond holder/bank) to obtain a court order authorising the auction. When the court order is granted, the Registrar of Deeds is notified and places an interdict, in the form of an attachment, over the property records at the Deeds Office and if the seller wants to sell the property the bank would have to consent to the sale and have the attachment uplifted.

When the estate agent takes a mandate from a seller it would be a good time to ask whether there are any restrictions against transfer of the property, says Heath. The seller will be aware of any attachment order so should be able to tell the estate agent. If the property has been attached, the agent should then contact the bank to find out the outstanding debt figure - which will give an idea what offers the bank will consent to.

Once an offer is made on the property it will be necessary to uplift the attachment in order to get it transferred to the buyer. Once the transferring attorneys have been appointed and when all the suspensive conditions to the sale (if there are any) have been met, the attorneys will liaise with the bank and give them all the necessary documentation to get the attachment uplifted.

When the bank is satisfied they will then instruct their attorneys to notify the Sheriff to have the attachment uplifted, the Sheriff, in turn, will then notify the Deeds Office who will update their records.
 
It sometimes happens, she said, that the bank issues summons, obtains an order, and attaches the property and, just before the auction date, the seller reaches an agreement with the bank. However, the attachment might still reflect on the Deeds Office records. The transferring attorneys will have to have this attachment uplifted before transfer can take place.
 
'In my opinion, however, the estate agent is not responsible for pre-checking whether there are any interdicts on the property. He might well not even have the tools at his disposal to correctly confirm whether or not there is an interdict in place.'
 
'I always suggest to agents that they can use the services of attorneys such as our firm, to help when taking the mandate, to get copies of the Deeds Office printouts which will reflect any interdict, as well as a copy of the title deed for reference purposes. In this way the buyer will be able to see what conditions the property is subject to,' she said.
 
The estate agent can make enquiries regarding interdicts on the property but the onus is on the transferring attorney to pick up any interdict once they receive a deed of sale, she said. They have an obligation to then notify the estate agent, the seller and buyer of what they have picked up and they can then liaise with the bank to get the attachment lifted timeously, so that no delay in transfer takes place.
 
Evans said there are sometimes extraordinary circumstances that can complicate property transactions, and it is always best to contact a professional to assist but the Institute is available to help find the right people to answer queries if need be.
 
'IEASA is the professional body representing property professionals and this is why we arrange legal updates and training and encourage agents to attend these so that they can keep up to date with regulations and the consequences of such laws,' said Evans


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