SELLER’S RESPONSIBILITY GUIDE

Various reasons lead to properties being placed on the market to sell, like expanding families, the need for improved security or changes in financial status.

Burden Swart & Botha Attorneys have extensive experience in transferring properties and we guide sellers through the Conveyancing Process. As this process can sometimes be overwhelming, our seller’s responsibility guide clarifies the obligations the seller has to fulfil.

 

  1. MARKETING OF PROPERTY

Sellers place their property on the market in one of two ways: through a Property Practitioner (Estate Agent) or by marketing the property privately.

Should the Seller appoint a Property Practitioner to market the property, the Seller will be liable for payment of the Property Practitioner’s commission. The amount of commission is negotiated and agreed upon and both parties are required to sign a professional fee agreement. This agreement in turn authorizes the Transferring/Conveyancing Attorneys to make the payment after the successful transfer of ownership is registered.

In some cases, the professional fee is agreed upon in a condition contained in the Offer to Purchase and not in a separate commission agreement.

Be mindful of the risks of multiple Property Practitioners marketing your property. Read our blog discussing The danger of paying a ‘double’ agent’s commission.

 

  1. ATTORNEYS

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

  1. The transferring attorney (conveyancer/conveyancing attorney) deals with the transfer of ownership, of the property, into the name of the Purchaser;
  2. The bond registration attorneys dealing with the registration of the bond in favour of the bank that granted the Purchasers a bond. Should the property be bought through a cash transaction, a bond attorney won’t be involved in the process;
  3. The bond cancellation attorneys deal with the cancellation of the seller’s bond over the property (if applicable).

2.1        TRANSFERRING ATTORNEYS

The Transfering Attorneys’ responsibilities include:

  • Liaising with both the Bond Cancellation Attorneys and the Bond Registration Attorneys by requesting and delivering guarantees;
  • Providing regular progress reports to all relevant parties;
  • Drafting of relevant transfer documents to be signed by the Seller(s) and Purchaser(s);
  • Requesting all the necessary clearance figures, e.g. rates clearance figures, levy clearance figures from the Body Corporate, levy clearance figures from the Homeowners Association (if applicable);
  • 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; and
  • Providing accurate statements of account at registration to both the Seller(s) and the Purchaser(s)

2.2        BOND CANCELLATION ATTORNEYS / BOND CANCELLATION SETTLEMENT FIGURES:

The owner of a property purchased via a bond must provide 3 months’ notice (90 days) of his/her intention to cancel the bond. To avoid penalty interest, notice must be given as soon as the decision is made to place the property on the market.

The bank will issue instructions to cancel the bond to an attorney registered on their panel.  The transferring attorney liaises with the bond cancellation attorney on behalf of the seller.

The transferring attorneys will deliver guarantees to the bond cancellation attorneys for them to prepare their consent to cancellation.

 

  1. COSTS PAYABLE BY THE SELLER:

3.1   The transferring attorneys will, on behalf of the seller:

  • Settle the outstanding bond amount at registration by way of a guarantee;
  • Pay the bond cancellation attorneys’ costs by way of a guarantee;
  • Pay the agent’s commission at registration (if applicable);
  • Pay the rates clearance (before registration);
  • Pay the levy and/or HOA clearance figures (before registration);
  • Pay any other expenses or disbursements on instructions of the Seller

i. Municipal Account (Rates and Taxes with the council):

On bond approval (or in the case of a cash transaction, full payment was received), the transferring attorneys will request the rates’ clearance figures from the relevant council/municipality.

These rates clearance figures will reflect outstanding amounts, as well as 3 months estimated charges in advance.

The rates clearance figures received are paid by the Seller, whereafter the council issues a Rates Clearance Certificate.  The rates clearance certificate is part of the transfer documents lodged in the Deeds Office.

The Purchaser is liable for the costs and disbursements incidental to the issue of a rates clearance certificate.

ii.  Levy Accounts (Body Corporate and/or Homeowner’s Association):

The property cannot be transferred without a Levy Clearance Certificate and/or a Homeowners Association’s Consent form confirming that the levies have been paid up to date and no amount is due at the date of registration of transfer of ownership.

The Body Corporate and/or Homeowners Association also requires payment for a certain period in advance to ensure the Levy Clearance Certificate and/or Consent to Transfer is valid as at the date of registration of transfer of ownership.

Although the Seller is liable to ensure that the account is up to date and no amount is due on the date of registration of transfer of ownership, it is the responsibility of the Purchaser to pay for the issue of a Levy Clearance Certificate (from the Body Corporate) or for the issue of a Consent to Transfer (from the Homeowners Association) as “costs incidental to transfer”.

iii. Miscellaneous Costs:

Several miscellaneous applications may be required from the Deeds Office to ensure that the transfer is successfully affected. The most common of these applications are:

Section 4(1)(b) – Corrections of errors in the existing title deed:

This application is used to rectify errors in the identification of the: registered owner of the property; marital status of the registered owner; error in the description of the property; error in the extending clause of the Deed; etc. This application is mostly signed by the registered owner in terms of Section 4(1)(b) of the Deeds Registries Act, however, in some instances, the Conveyancer can also sign the application on behalf of the registered owner.

Should any error, as mentioned above, be present, the Deeds Office requires the Conveyancer to rectify the said error simultaneously with the transfer of ownership of the property registration.

The cost of this application and the Deeds Office fee is the responsibility of the registered owner.

Regulation 68(1) – Replacement of the lost original title deed:

The cost of this application and the Deeds Office fee is the responsibility of the registered owner. This application is brought by the registered owner of the property when the existing title deed has been lost/destroyed.

A transfer cannot register without the existing title deed or the application for a lost copy of the title deed in terms of Regulation 68(1) of the Deeds Registries Act.

Please note that should there be a bond registered over the property being transferred, it is standard practice that the registered owner applies for the issue of a lost copy of the title deed, however, the bank is usually responsible for payment of the costs of such application, as the bank lost the title deed.

Section 68(1) – Removal of conditions in the title deed:

The cost of this application and the Deeds Office fee is the responsibility of the registered owner. A Section 68(1) application in terms of the Deeds Registries Act is an application to remove certain conditions in the title deed which are no longer relevant. For registration of transfer to occur, the Deeds Office will request for such condition to be removed.

3.2   COMPLIANCE CERTIFICATES:

There are various compliance certificates which the Seller can be held liable to obtain (and pay for), e.g.:

i. Electrical Certificate of Compliance: 

In terms of the Occupational Health and Safety Act (OHS Act), it is a legal requirement for the Seller to provide an Electrical Certificate of Compliance to the Purchaser timeously and before registration of transfer, to ensure that the electrical installation is safe and in compliance with SABS standards. It is the Seller’s responsibility to pay for this certificate of compliance to be issued.

An Electrical Certificate of Compliance may not be older than 6 months.  Once a certificate has been issued and any alterations or amendments are done to the electrical wiring, a new certificate needs to be issued, alternatively, the same electrician may inspect the wiring and issue a Supplementary Certificate / Annexure to the already issued Electrical Certificate of Compliance.

iv. Electric Fence Compliance Certificate:

When a property has an electric fence, the OHS Act requires that a qualified person inspects the installation and verifies that it meets the relevant SABS standards. This certificate is not the same as an Electrical Certificate of Compliance and, in most instances, the electrician that issues an Electrical Certificate of Compliance cannot necessarily issue an Electric Fence Certificate.

The Seller is also liable to provide the Purchaser with a valid Electric Fence Certificate, before registration, and for the payment of such certificate to be issued.

When the property is situated within a sectional title, such a certificate can be obtained from the body corporate/managing agent.

v. Gas Compliance Certificate:

If the property has a Gas Installation, the Occupational Health and Safety Act requires the Seller to provide to the Purchaser timeously before registration of transfer or date of occupation (whichever is earlier) with a valid certificate certifying that the Gas Installation meet SABS standards.

A Gas Certificate is required whenever the owner or user of the installation changes.

The Seller is also liable for payment of the account to have this certificate issued.

There is no regulation regarding the length of the period of validity of a Gas Compliance Certificate.  Regulation 17(3) of the Pressure Equipment Regulations promulgated in terms of the Occupational Health and Safety Act 85 of 1993 became effective on 1 October 2009 and makes it compulsory for a Gas Compliance Certificate to be obtained when a property is sold.

vi. Plumbing / Water Compliance Certificate:

This Certificate is required when transferring property in the municipal jurisdiction of Cape Town, according to the Cape Town Water By-Laws of 2010 (Section 14).

The Seller is responsible to obtain a plumbing certificate from a certified plumber and bear the costs for the issue of such a certificate.

Although it is not a legal requirement in other areas, the parties can include a condition for the issue of such a certificate within the Offer to Purchase.

vii. Beetle / Entomologist Compliance Certificate:

It is standard practice for the Offer to Purchase to include a condition calling for a beetle/entomologist compliance certificate for coastal areas which guarantees that there are no beetles in or on the property.

It is the Seller’s responsibility to obtain such a certificate and bears the cost for extermination (if necessary) and the issuing of the certificate.

It is also possible for the parties to agree to this certificate being provided utilizing a condition in the Offer to Purchase although the property is not situated in a coastal area.