With the lower interest rate and more active buyers, it is a great time for sellers to take advantage of the selling opportunities in the market, but the Seeff Property Group says sellers must ensure their properties are compliant so as not to delay any offers, or the sale.
When there is plenty of stock to choose from, sellers will not want anything which may cause a delay, says Gerhard van der Linde, MD of Seeff Pretoria East. Non-compliance can cause delays while full compliance can considerably speed up the sale and transfer process.
He recommends that sellers chat to the agent and possibly make use of a service provider for compliance vetting, and ensuring key aspects such as building plans, zoning conflicts, title restrictions, and servitudes are resolved.
The most important compliance issues generally include:
#1 – Installations. Various installations require Certificates of Compliance before the property can be transferred. While the various municipalities differ in terms of specific requirements, these usually include electrical and water installations, electric fences, and possibly also solar and gas installations. Certificates must be valid to cover the transfer period.
#2 – Building plans. While not necessarily a precondition, it is generally recommended that the seller obtains a copy of the building plans and ensures that all building works are approved and compliant. Anything which is not approved must be corrected, and signed off. Sellers must also ensure that all zoning requirements are met, and that there are no encroachments insofar as boundaries are concerned.
#3 – Disclosure of defects (Condition of Property Report). In terms of the Property Practitioners Act, sellers must disclose all known material defects, both patent (obvious) and latent (hidden) to prospective buyers before they make an offer. The Act mandates sellers to complete and sign a mandatory “Condition of Property Report” which must be annexed to the selling agent’s mandate, as well as the agreement of sale.
#4 – Rates Clearance Certificate. This certificate is required before the property can be transferred, and is usually obtained by the attorneys. It requires that all outstanding monies owed to the local municipality in terms of rates as well as utilities are settled in full, and most municipalities also require the lodging of funds to cover a period of time that it will take before the property is transferred. The surplus is refundable after transfer.
#5 – Other compliances. Some areas may also require additional compliance certificates which could relate to the safety of swimming pools or a lightning conductor on thatched roof properties in certain areas. Again, these are needed before the transfer can be effected and must be valid for an adequate period of time.
Tiaan Pretorius, manager for Seeff Centurion says that other issues which can delay the sale and transfer of a property include:
#6 – Buyer finance. If the buyer is unable to secure a mortgage loan, it is delayed, a lower amount is offered, or the buyer is unable to secure the required deposit, it can delay the sale, or it may even fall through. This is why sellers should ensure the property is in top shape so that the banks can find value while the buyer must ensure their financial position is such that they can secure the required mortgage loan, and deposit.
#7 – Disputes about fixtures. Disputes about what is included in the sale can also cause delays, or even sink the deal. If there are for example specific fixtures on display when the buyer views it, but these are actually excluded, it is recommended that any exclusions are clearly stipulated when buyers view the property. Better yet rather remove any special items before the property is viewed to avoid potential disputes.
Issued by: Gina Meintjes
