Despite ongoing media publicity about property law and regular discussion on these matters at a whole range of seminars and training sessions, many South African home buyers and sellers remain surprisingly ignorant of the basic legalities surrounding property transactions, says Lanice Steward, MD of Anne Porter Knight Frank.
“It has become necessary to insist that agents give clients a short rundown on the legalities surrounding property transactions. First time home buyers in particular tend to have absolutely no idea how property is bought and sold and how to go about getting bonds.
“When the deal looks as if it will go through, one of the most common mistakes is lack of appreciation that signed contracts are legally binding. If a better offer or prospect comes up buyers cannot simply change their minds. Some young buyers have heard about the “cooling off” clause and think it applies across the board. In fact it applies only to properties valued at under R250 000.”
Another common first time buyer mistake is to underestimate the extra costs of transactions, such as transfer duties, attorneys fees and deeds office costs. Good agents will draw a buyer’s attention to these early on.
She says some clients are scared of any documentation and try to avoid putting matters in writing until the eleventh hour.
“This can be disastrous when submitting offers because, apart from the fact that written offers put agents in a far stronger position to negotiate, it is illegal to make such offers verbally.
“Inexperienced buyers often show a marked reluctance to invade a home owner’s privacy. As a result they fail to inspect homes carefully and never fully appreciate the partially latent defects and flaws. Good agents will, of course, insist on faults being listed in writing, but nothing can replace a hands on inspection.
“When buying a property always ask for the home plans. It is essential to see these. Once you have them, hold onto them. Some years ago a fire at the deeds office destroyed several hundred plot plans, leaving owners, who did not have copies with no option but to have them redrawn by professionals.”
And, if you are planning to buy a property using a trust, a close corporation or a company as the holding vehicle, you should take note that this vehicle must have a tax number and the taxes must be fully paid up.
“As soon as money is paid to achieve a transfer, there will automatically be an investigation into the holding vehicle’s tax status. If any money owed is still outstanding, the sale will be blocked. If the tax defaulter is the seller, SARS may be prepared to take the outstanding sum from the money paid. If, on the other hand, it is the buyer, SARS will insist on the money being paid up before any further transactions take place.”
