PURCHASER’S RESPONSIBILITY GUIDE

Planning to buy property includes various factors which a purchaser must be aware of and prepare for to avoid concerns or complications.

As Conveyancing Attorneys (also known as Transfer Attorneys), Burden Swart & Botha have the knowledge and experience to guide the purchaser through the process.

  1. FINDING THE RIGHT PROPERTY

It is advisable to commence the process by establishing the following:

1.1  The purpose of the purchase would be (e.g. personal residence, investment, holiday home, etc)
1.2  A budget. (Obtaining a pre-qualification would assist greatly)

  1. SIGNING OF THE CONTRACT & COMMISSION

Once a property is identified and the purchaser wants to proceed to make an offer, he/she can purchase a property by either:

  • Make an offer directly to the Seller (if a property practitioner is not involved)Should a Purchaser decide to make an offer to a Seller directly, we highly suggest the Purchaser approach a Conveyancer to assist with drafting the Agreement of Sale. Although it is the prerogative of the Seller to appoint the Transferring Attorneys (Conveyancers), it does not prohibit the Purchaser from negotiating with the Seller to appoint a preferred Attorney.
  • If the property was introduced by a property practitioner (also known as an estate agent), make an offer via the property practitioner.When a Purchaser makes an offer via a property practitioner, the property practitioner will assist the Seller and Purchaser with the Agreement of Sale. The Purchaser can still appoint a Conveyancer to review the Agreement of Sale on behalf of the Purchaser.

If the property practitioner is the effective cause for the conclusion of the agreement, the Seller will be liable for payment of the property practitioner’s commission upon successful registration of the transfer of ownership of the property.

  1. ADDITIONAL COSTS

In the property transfer process, three different attorneys are usually involved:

  1. The transferring attorney (conveyancer/conveyancing attorney) dealing with the transfer of ownership of the property into the Purchaser’s name;
  2. The bond registration attorneys deal with the registration of the new bond on behalf of the bank granting the finance. In the case of a cash purchase, a bond attorney will not be involved in the process.
  3. The bond cancellation attorneys deal with the cancellation of an existing bond which the Seller may have over the property (if applicable).

The Transferring or Conveyancing Attorneys are responsible for:

  • Liaising with both the bond cancellation attorneys and bond registration Attorneys by requesting and delivering guarantees;
  • Providing regular progress reports to all relevant parties;
  • Drafting transfer documents to be signed by the Seller(s) and Purchaser(s);
  • Requesting necessary clearance figures, e.g. rates clearance figures, levy clearance figures from the Body Corporate, levy clearance figures from the Homeowner’s Association (if applicable); and
  • Requesting bond cancellation/settlement figures from the Seller’s existing Bondholder (if applicable);
  • Ensuring that the parties comply timeously with the terms and conditions as stipulated in the Offer to Purchase;
  • Confirming registration of transfer with the local authority, body corporate and/or HOA;
  • Providing accurate statements of accounts at registration to both the Seller(s) and the Purchaser(s).

3.1 TRANSFERRING ATTORNEYS AND TRANSFER COSTS

Although the appointment of the Transferring Attorneys is the prerogative of the Seller, the Transfer Costs are payable by the Purchaser. The purchase price is used to calculate the Transfer Costs.

Included in the total transfer costs amount is the Transfer Duty payable to SARS (if applicable). The Transfer Duty exemption threshold was increased to R1,1 million, effective from 1 March 2023.

To assist with the calculation of the Conveyancing Costs, make use of our cost calculator available on our website:  https://www.bsbattorneys.co.za/

The Seller remains responsible for the payment or settlement of the rates and levy clearance figures.  The Purchaser will bare the costs and expenses incidental to obtaining these clearance figures from the city council and the body corporate and/or HOA.

3.2 BOND ATTORNEYS AND BOND REGISTRATION COSTS:

When purchasing a property through bond finance, the financial institution will provide the purchaser with a quotation. Upon acceptance of the bond quotation, the institution will instruct  Attorneys registered on their panel to proceed with the bond registration process. All financial institutions have a panel of Attorneys and will instruct an Attorney on this panel to attend to the registration of the accepted bond.

Upon receipt of the bond registration instruction, the Bond Attorneys will make contact with the Transferring Attorneys and their client, advising them of the bond conditions.

There are legal and administration costs applicable when registering a bond to cover the balance of the purchase price. These costs are required upfront before registration can take place.  A Bond Cost Calculator is also available on our website.

 

  1. COMPLIANCE CERTIFICATES

The Seller is responsible for providing the compliance certificates applicable to the property. Some of the certificates of compliance are prescribed by law and other certificates can be agreed upon in writing by adding a specific condition in the Agreement of Sale.  The Purchaser may contractually renunciate the delivery of any of the compliance certificates.

 

The Seller is responsible to deliver the following compliance certificates:

  • Electrical Certificate of Compliance (not older than 6 months)
  • Electric Fence Compliance Certificate (if applicable)
  • Gas Compliance Certificate (if applicable)
  • Plumbing / Water Compliance Certificate (required when transferring property in the municipal jurisdiction of Cape Town, according to the Cape Town Water By-Laws of 2010 (Section 14).
  • Beetle / Entomologist Compliance Certificate (It is standard practice for the Offer to Purchase in coastal areas which guarantees that there are no beetles in or on the property).  It is also possible for the parties to agree to this certificate being provided through utilizing a condition in the Offer to Purchase although the property is not situated in a coastal area.