Transferring property in South Africa involves a meticulous process governed by various laws and regulations. Whether you are buying or selling, understanding your rights and obligations is essential to ensure that the transfer of the property takes place smoothly without delays or legal disputes. The sale of property typically begins with a contract between the seller and purchaser. It is vital that both parties carefully read the terms of the agreement as it will govern potential disputes during the transfer process.
Title Deed Disputes: This can occur when the purchaser discovers that there are provisions included in the property’s title deed that they were unaware of such as a servitude or undisclosed lien. Most sale agreements will include a clause that states that the property is sold subject to all the conditions and servitudes in the title deed as it stands. Purchasers need to be aware of this and should request a copy of the title deed before signing the sale agreement.
Occupational Certificate Delays: If a purchaser is obtaining a bond the bank may request an occupational certificate, particularly if there have been recent renovations to the property. Should the seller not have a valid occupational certificate they will need to obtain one from the municipality. This will require an inspection to the property and further work may be required to ensure compliance. This can cause considerable delays to the transfer process.
Financial Disputes: Issues related to financing, such as defaults on mortgage payments or disputes over the allocation of costs (e.g., rates and taxes), can complicate property transfers and lead to legal proceedings. The sale agreement will usually state that the purchaser must obtain a quotation or pre-agreement statement from the bank that is in terms of section 92 of the National Credit Act (34 of 2005). As there are prescribed time limits within which the purchaser needs to obtain approval for the bond it is important to ensure that the document provided by the bank meets the requirements in the National Credit Act. A letter from a bank stating that the purchaser holds the required amount of money in his account would not meet the National Credit Act requirements.
Fraud and Misrepresentation: Should the occupation date and transfer date not align then the purchaser may move into the property before they are the owner of the property-if agreed between the parties. The purchaser may discover certain defects in the property that were not disclosed in the sale agreement. Depending on the nature of the defect and whether it was disclosed in the sale agreement or whether the seller frequently misstated the property conditions could lead to a dispute.
To mitigate potential litigious issues during property transfers, it is crucial to appoint an attorney that can guide you through the transfer process by providing expert guidance and ensure compliance with all the legal requirements.
It may be necessary to appoint an expert to examine the property before finalising the sale agreement to ensure that there are no defects in the property that would deter you from purchasing it. Always ensure that you read the sale agreement in its entirety and ask for a clear explanation should you not fully understand the terms and conditions.
Navigating property transfers in South Africa requires attention to detail and by understanding the potential litigious issues and taking proactive steps to address them, you can safeguard your investments and ensure a seamless transaction.
For any assistance or guidance please contact our Conveyancing department.
Conveyancing Department
Cape Town