This article is the second and final part of the offer to purchase conditions when buying a home in South Africa.
Buying Property in South Africa
When buying property in South Africa, one must be aware of all the pitfalls that can present themselves in an offer to purchase.
The rental amount, as well as occupation dates, must always be completed in the sale agreement. It’s preferable that the rental amount is based on the current property rental market, rather than what is suitable to one of the parties involved in the agreement.
The seller is required to disclose any information regarding patent or latent defects of the property that are to his or her knowledge.
This information should be put into a document and attached to the sale agreement as an annexure and must be presented to the purchaser before the sale agreement is concluded.
Where a property for sale is tenanted, a copy of the lease agreement or terms of the agreements must be obtained and perused by the potential purchaser.
If the purchaser has the intention to occupy the property in question, he or she must first scrutinise and understand the terms of the lease, the lease period and the right to renewal by the existing tenants.
A seller is required to give the relative financial institution 90 days’ notice of his or her intention to cancel the existing bond that is registered over the property for sale.
This avoids any penalty related to the early termination of an existing mortgage bond.
Any access facility or available funds will be frozen once the cancellation figures are requested by the conveyancing attorneys, and the seller will no longer have access to these funds.
Sellers should withdraw all the necessary funds before the attorneys call for cancellation figures and bond account numbers should be completed on the contact information sheet.
The notice address of both the purchaser and seller must be clearly stated and comprehensive in order to ensure that any notices or letters of demand related to the sale agreement can be effectively delivered.
Email addresses, postal addresses and physical addresses must all be included when completing the form.
Should a purchaser wish to pay cash for the property and the agreement states that cash payments can be made to secure the purchase price, no other form of guarantee can be accepted, unless the agreement states otherwise.
If the seller has any doubt, a document known as a “letter of comfort” can be obtained from the relevant bank or financial institution which confirms that the purchaser indeed has the necessary funds to make a cash purchase.
Where movable property is included with the sale of immovable property, this must be dealt with in a separate sale of movables agreement.
This is to avoid the purchaser paying transfer duty on the value of the movables and the bank granting a mortgage bond possibly reducing the loan amount by the value of the movables.
An electrical compliance certificate is commonly required by banks for approval, prior to the transfer or bond being registered in the Deeds Office.
It’s a legal requirement for this certificate to be handed to the transferring attorneys in a prompt manner.
These are all offer to purchase conditions that potential home buyers should always be aware of. Buying a home in South Africa is an intricate process and requires in-depth knowledge of all the legal aspects involved.
If you require legal assistance with buying or selling a home, or if you are in need of our conveyancing services, please feel free to contact our attorneys.
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