The Law
OFFER TO PURCHASE / CONTRACT

A contract or an offer to purchase is in essence an agreement to sell property at a determined purchase price, subject to certain time lines and conditions. In our law everything that you agree upon relating to fixed property must be documented on paper and signed by all parties. Any amendment thereto must also be signed by all parties.

Always keep in mind that an accepted and signed offer to purchase is a legally binding contract and therefore it is crucial for the buyer and seller to ensure that the offer to purchase is accurately completed and contains everything agreed upon as at the time of signature thereof.

FICA

In terms of the Financial Intelligence Centre Act we are a primary accountable institution. This requires us to verify the identity of all our clients. In terms of the said legislation certain documentation must be in our possession prior to commencing with the registration process.

IMPORTANT POINTERS
  • Read the contract – the whole contract.
  • Remember to inform your bank of your intention to sell your property as soon as possible since a 90 days notice period is required to eliminate early termination charges.
  • If something doesn’t make sense, ask questions until you have clarity.
  • Ensure that the following items are properly stated and agreed upon:
    1. The price;
    2. The parties to the contract;
    3. The correct property description;
    4. The method of payment (Is the buyer applying for a bond or is the purchase subject to the sale of another property? Are these conditions stated as “suspensive” conditions which entails that the contract will automatically lapse should these conditions not be timeously met?)
    5. Specific dates:
      • When does the buyer have to obtain a bond?
      • When does the buyer have to deliver guarantees?
    6. What stays and what goes? Are there specific fixtures the seller wants to remove, or are there loose items that the buyer feels should remain? This must be included and noted in the contract.
    7. The occupation date. Has a specific date been agreed upon or is it the date of registration? What is the occupational rent amount payable monthly? Is the water and electricity consumption included or excluded?
    8. Provision for Electrical-, Electrical Fence – and Gas compliance certificates. The seller is responsible to supply these certificates (if applicable). The seller must keep in mind that if these installations are not in order, the respective certificates will not be issued until all errors are rectified.
    9. Any other terms specifically agreed upon.
APPLYING FOR BOND FINANCE

If you finance a house with a home loan, remember that it needs to be approved first by the bank where after the bank will appoint the bond registration attorney to attend to the bond registration process. The guarantees will only be issued after signature of all bond documentation at the office of the bond registration attorney.

CASH TRANSACTIONS

If the buyer is buying cash, guarantees usually imply Bank Guarantees against cash in the bank or alternatively the deposit of the funds into the transferring attorney’s trust account. The funds will be invested in favour of the purchaser and the interest earned on these funds will be paid to the purchaser upon registration of the property.

COSTS RELATING TO A TRANSFER

A buyer will be responsible for payment of the following costs relating to the transfer:

  • Transfer Fees, calculated in accordance with the Law Society’s guidelines.
  • Transfer Duty to SARS calculated on the purchase price of the property.
  • Deeds Office Registration Fees.
  • Bond Registration Fees, calculated in accordance with the Law Society’s guidelines.
  • FICA Verification Fee.
  • Disbursements.
  • Value Added Tax on the disbursements and fees.

A seller will be responsible for the following costs relating to the transfer:

  • Estate Agent Commission
  • Bond Cancellation Figures and Bond Attorney Cancellation fees.
  • Municipal Rates and Taxes (arrears plus 3 months in advance)
  • Settlement of all current and arrear Body Corporate and/or Home Owners Association levies
  • FICA Verification Fee
  • Electrical-, Electrical Fence – and Gas compliance certificates.
  • Settlement of all current and arrear water and electricity accounts.