Conveyancing | AED Attorneys

Understanding Your Rights When Transaction Transfer Costs Are Paid but the Deal Falls Through

Written by kevin Cartmell on May 20, 2024. Posted in Conveyancing.

In the world of property transactions in South Africa, unexpected twists can occur. You’ve diligently paid all the necessary transfer costs to the transferring attorney, eagerly anticipating the completion of your property deal, only to face the disheartening news that the transaction will not proceed as planned. What are your rights in such a situation? In this article, we’ll explore your rights and options when your property transaction takes an unexpected turn.

1. Seek Legal Advice

The first and most crucial step when you find yourself in this predicament is to seek legal advice from a reputable attorney, like AED Attorneys. An experienced attorney can assess the specifics of your case, review the documents and agreements involved, and provide tailored guidance on your rights and potential courses of action.

2. Understand the Reason for the Cancellation

To determine your rights accurately, it’s essential to understand the reason behind the cancellation of the property transaction. In South Africa, property deals can collapse for various reasons, such as:

Financing issues
Title deed problems
Boundary disputes
Unforeseen legal complications
Seller’s breach of contract
The Buyer or Seller’s tax matters with SARS not being up to date

Knowing the cause can help your attorney advise you on the most appropriate steps to take.

3. Review the Sale Agreement

Your rights regarding the paid transfer costs may be outlined in the sale agreement. It’s crucial to carefully review this document, as it often contains clauses that address what happens to the costs in case of a deal breakdown. Some agreements stipulate that the costs are refundable to the buyer, while others may specify that they are non-refundable.

4. Negotiation with the Seller

In many cases, a negotiation between the buyer and seller can help determine the fate of the paid transfer costs. If both parties are willing, they may reach an agreement on how to distribute these costs, whether partially or in full, depending on the circumstances and terms of the sale agreement.

5. Pursue Legal Remedies

If negotiations fail or the seller is unwilling to cooperate, you may need to consider pursuing legal remedies. Your attorney can guide you through the process of initiating legal action to recover the transfer costs or seek compensation for your financial losses due to the failed transaction. This may involve taking the matter to court if necessary.

6. Assess the Transferring Attorney’s Role

The transferring attorney plays a crucial role in the property transaction. If it’s determined that the transferring attorney’s actions or negligence contributed to the deal’s collapse, you may have grounds for a professional misconduct complaint or a claim against their professional indemnity insurance.

7. Consider Mediation or Arbitration

In some cases, mediation or arbitration can be an alternative to lengthy court proceedings. These dispute resolution methods can help both parties reach a mutually acceptable solution regarding the transfer costs and any other related issues.

8. Document Everything

Throughout this process, it’s vital to keep thorough records of all communication, agreements, and documents related to the property transaction. These records can serve as evidence if you need to pursue legal action or negotiate with the seller.

In conclusion, when you’ve paid all the transfer costs but your property transaction falls through, it’s crucial to approach the situation methodically and seek legal advice promptly. Your rights and options will depend on various factors, including the terms of the sale agreement and the specific circumstances surrounding the deal’s cancellation. With the guidance of a qualified attorney, you can navigate this challenging situation and work towards a resolution that aligns with your best interests. Remember that AED Attorneys is here to assist you with expert legal advice and support during such challenging times in your property journey.

Understanding Life Rights in Retirement Villages: What You Need to Know When Scaling Down

Written by kevin Cartmell on May 6, 2024. Posted in Conveyancing, Deceased Estates Administration.

As individuals approach retirement age, many consider downsizing and moving to retirement villages for a more relaxed and community-oriented lifestyle. One common arrangement in such communities is life rights. But what exactly does life rights on a property mean, and how does it affect your living situation in a retirement village in South Africa? In this article, we’ll delve into the concept of life rights and explore what it entails when scaling down to live in a retirement village.

What Are Life Rights in a Retirement Village?

Life rights are a unique form of property ownership or, more accurately, the right to occupy a property within a retirement village for the duration of your life. It is essential to understand that life rights do not constitute actual ownership of the property; instead, they grant you the legal right to live in the unit for the rest of your life or until you decide to leave.

Key Features of Life Rights:

Lifetime Occupation: Life rights entitle you to occupy a particular unit within the retirement village for as long as you live, provided you adhere to the terms and conditions of the agreement.
No Transfer of Ownership: With life rights, you do not acquire ownership of the property. Instead, you enter into a contractual agreement with the retirement village operator that specifies your right to live in the unit.
Right to Resell or Bequeath: Depending on the terms of the agreement, you may have the right to resell your life rights to someone else or bequeath them to a family member, friend, or another individual who meets the village’s eligibility criteria.
Financial Arrangements: Life rights agreements typically involve a financial transaction, such as a lump-sum payment, monthly levies, or a combination of both. These payments cover various services and amenities provided by the retirement village, such as maintenance, security, and communal facilities.
Exit Strategy: The agreement should outline the process for exiting the retirement village, whether due to relocation, health reasons, or other circumstances. This can include provisions for the return of your investment or life rights fee.

What Are the Advantages of Life Rights in Retirement Villages?

Financial Predictability: Life rights often involve fixed monthly levies, providing financial predictability and simplifying budgeting for retirees.
Access to Amenities: Retirement villages typically offer a range of amenities and services, such as healthcare facilities, recreational areas, and social activities, enhancing residents’ quality of life.
Community Living: Retirement villages foster a sense of community and social interaction among residents, promoting a fulfilling and active lifestyle.
Exit Options: The ability to resell or bequeath your life rights can be an advantage, allowing you to pass on your chosen lifestyle to a loved one or recover some of your investment.

What Should You Consider When Exploring Life Rights?

Agreement Terms: Carefully review the terms and conditions of the life rights agreement, including financial arrangements, services, and exit provisions.
Legal Advice: Seek legal counsel from an attorney experienced in retirement village contracts to ensure you fully understand the agreement and its implications.
Eligibility Criteria: Retirement villages may have specific eligibility criteria based on age, health, or other factors. Ensure you meet these requirements before proceeding.
Financial Planning: Evaluate your financial situation and consider how life rights fees and ongoing levies fit into your retirement financial planning.
Exit Strategy: Understand the exit strategy and potential costs associated with leaving the retirement village. Some agreements may require you to forfeit a portion of your initial payment.

Conclusion

Life rights on a property in a retirement village offer retirees a unique living arrangement with numerous advantages, including financial predictability and access to amenities and a vibrant community. However, it’s essential to enter into such agreements with a clear understanding of their terms and implications. Seek legal advice, review the agreement carefully, and consider your financial and lifestyle preferences before making the decision to scale down and enjoy your retirement in a retirement village. With the right information and planning, life rights can provide a fulfilling and comfortable retirement experience.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

Understanding Delays in the Property Transfer Process in South Africa

Written by Sandra on February 2, 2024. Posted in Conveyancing.

Buying or selling a property is usually an exciting journey. However, it’s essential to acknowledge that this process is not without its challenges. In this article, we delve deep into the common reasons for delays in property transfers, shedding light on potential hurdles that may dampen the excitement of moving into your new property.

Common Reasons for Delays

Delays Caused by Incomplete or Inaccurate Deeds of Sale

One of the initial steps in any property transaction is the signing of the Deed of Sale. This document sets the tone for the entire process. Delays can ensue if it is incomplete or inaccurately completed, a responsibility that can fall on the buyer, seller, or real estate agent. This document is pivotal for the subsequent bond application process, and any issues must be resolved before moving forward.

Validity of the Deed of Sale

Ensuring that the Deed of Sale is valid and binding between parties is crucial. If not, a new valid contract must be established, further elongating the process.

Delays Due to Failure to Provide Personal Information or FICA Documents

Another stumbling block can be the failure to provide necessary personal information or FICA (Financial Intelligence Centre Act) documents promptly. Failure to do so can hinder the transaction’s progress, making cooperation from both parties vital.

Delays Related to Signing Bond and Transfer Documents

Timely signing of relevant bond and transfer documents is crucial. Any delays in this regard can have a cascading effect on the entire process, causing further setbacks.

Issues with Original Title Deed

The seller’s provision of the original title deed of the property is essential. However, if this document is lost or damaged, obtaining a duplicate from the Deeds Office can be a time-consuming process, sometimes taking up to three weeks.

Cash Shortfall

A smooth property transfer often hinges on cash flow. Delays can be triggered if buyers are unprepared for additional costs beyond the purchase price. Similarly, sellers may face cash flow issues if the selling price doesn’t cover an outstanding bond.

Transfer Duty Receipt and Bond Cancellation

A Transfer Duty receipt is a prerequisite for conveyancers to initiate the registration process. The buyer must pay the transfer costs to obtain this receipt. On the other hand, sellers must provide at least 90 days’ notice to cancel their existing bond, resulting in a potential three-month delay if this notice is not given.

Role of the Transferring Attorney

The transferring attorney plays a central role in coordinating various aspects of the transaction. This includes notifying mortgagees and initiating the bond cancellation process, which can be delayed due to notice periods.

Obtaining Certificates and Consents

Obtaining certificates, receipts, and consents can be time-consuming. These include rates clearance certificates, transfer duty receipts, and homeowners’ association consent, among others.

Delays Due to Property Inspections

Property inspections by professionals, such as plumbers or electricians, may uncover the need for significant repairs or improvements before certificates are issued, causing delays.

Delays in Deceased Estate Transactions

In transactions involving deceased estates, obtaining the consent of the Master of the High Court is a prerequisite. Delays may occur if certain requirements are not met.

Simultaneous Lodgement at the Deeds Office

To expedite the process, all attorneys involved must simultaneously lodge documents at the Deeds Office. This step requires approval from the mortgagee and consents for bond cancellation.

Deeds Office Time Frames

Time frames at the Deeds Office can vary, and they may also change during the course of a transaction. To stay informed, it’s advisable to consult your conveyancer for up-to-date information.

Understanding the intricacies and potential delays in the property transfer process is essential for a smoother experience. While delays are sometimes inevitable, careful planning, cooperation, and seeking professional guidance from a property law attorney can help navigate these hurdles effectively.

What can I do if I am a new owner and there are problems with the electrical compliance certificate?

Written by kevin Cartmell on June 26, 2023. Posted in Conveyancing.

If you have recently bought a property in South Africa, you may have received an electrical compliance certificate (ECoC) from the seller. An ECoC is a legal document that verifies that an electrical installation is compliant with the legal requirements as stipulated in the Electrical Installations Occupational Health and Safety Act of South Africa. The ECoC is only valid for two years after issue or until such time as alterations or additions are made.

An ECoC is compulsory in South Africa for several reasons, such as:

To ensure the safety and protection of people, animals, and property from electrical hazards such as shocks, fires, or explosions.
To prevent or minimise the risk of damage or loss due to faulty or illegal electrical installations.
To comply with the regulations and standards that govern the design, installation, maintenance, and inspection of electrical installations.
To facilitate the transfer of ownership or responsibility of electrical installations between parties such as sellers, buyers, landlords, tenants, or contractors.
To enable the enforcement and monitoring of electrical installations by authorities such as the Department of Labour, SABS, Eskom, or municipalities.

According to the Electrical Installation Regulations of 2009, an ECoC is required for:

Any new electrical installation
Any addition or alteration to an existing electrical installation
Any change of ownership of a property with an existing electrical installation
Any inspection required by an inspector or supplier
An ECoC must be issued by a registered person who is qualified and authorised to perform electrical work and inspections. The registered person must also be in possession of a valid wireman’s licence issued by the Department of Labour.

Don’t risk your safety or liability by neglecting or ignoring your ECoC. AED Attorneys specialises in estate planning and administration, as well as property matters. We can help you to find a registered person who can issue an ECoC for your electrical installation.

However, what if you discover that there are problems with the electrical installation or the ECoC after you have taken ownership of the property? For example, what if you find out that the ECoC is outdated, incomplete, fraudulent, or does not cover all the electrical work on the property? What if you encounter electrical faults, hazards, or defects that pose a risk to your safety or property? What are your rights and responsibilities as a new owner in such situations? According to the law, the seller is responsible for providing a valid ECoC to the buyer before transferring ownership of the property. The seller is also liable for any damages or losses caused by a defective or non-compliant electrical installation. Therefore, if you are a new owner and you encounter problems with the ECoC or the electrical installation, you have several options to pursue:

You can contact the seller and request them to rectify the problems or provide a new ECoC at their own cost.
You can contact the electrician who issued the ECoC and request them to rectify the problems or provide a new ECoC at their own cost or if he fails you can report them to the Electrical Conformance Board (ECB) or their professional body for misconduct or negligence.
You can hire another qualified electrician to inspect and repair the electrical installation and issue a new ECoC at your own cost. This can only be done after you have requested the electrician that attended to the inspection initially to rectify any defects or problems.

To Do or Not to Do: Shall I purchase property in a trust?

Written by kevin Cartmell on December 7, 2022. Posted in Conveyancing.

The word “trust” in a legal sense, originated from the Latin word fiducia, meaning “confidence, courage, security”, and also translates to “pledge” or “guarantee” which indicates a concrete sign of commitment. The Latin word fides, means “faith, conviction, belief” which is more of a reliance without guarantees. This makes us wonder if it could be safer for you to hold property in a trust than in your own name, in which case it forms part of your estate.

Interestingly, the verb that most commonly indicates the beginning of a relationship is “I give you my trust” and the verb that marks the end is “I have lost my trust in you”. So what do you have to give and what is there to lose? Personal circumstances would have an influence e.g. whether you are prone to risks of insolvency, whether your personal income tax rate is already high and if there is a history of mental illness in your family. Let us look at the options that you have when investing in property, and how buying it in a trust could benefit you.

WHAT IT MEANS

“Perpetual succession” means that a trust does not “die” and is therefore not liable for estate duty, transfer duty, executor’s or conveyancer’s fees, or capital gains tax (CGT) that might otherwise happen on the death of an owner.
A trust is a legal entity that holds assets for the benefit of beneficiaries, on behalf of its founder(s).
A trust is not liable for estate duty, transfer duty, executor’s, or conveyancer’s fees.
There are administration costs involved in setting up a trust, and it is taxed at the top marginal rate.
The founder tasks a trustee or trustees with the management of the trust’s assets for the benefit of one or more beneficiaries.

TO DO (THE PROS)

Property registered in a trust does not form part of your personal estate and is thus protected from creditors. Upon your death, the property would not be wound up in your estate subject to various costs such as estate duty, capital gains tax, executor’s fees, transfer duty (subject to the relevant exemptions), and transfer fees.

Your trust and the property registered therein will not be affected by your death. If your heirs are beneficiaries of the trust, it should not be necessary to transfer the property into the name of the heirs. If old age or an illness prevents you from managing your affairs, the trustees would be able to sell the property if need be without your family having to undergo a High Court application to apply for a curator to manage your affairs to sell the property.

Income from the trust’s property is for the trust, and expenses such as repairs, maintenance, water, and rates bills are also for the trust’s account. In the situation where you struggle with an age-related illness to the extent that you are no longer capable of managing your affairs, the property owned by the trust would ensure that your illness does not affect the management of the property.

Having property registered in a trust rather than your own name means the value of your personal estate is reduced, which lessens your estate duty exposure.

If a property is tenanted, the trust will produce an income that would be taxed at a 45% rate. The trustees have the authority to distribute the profits to the beneficiaries to minimise the tax implication. The beneficiaries would then pay tax on such distributed profit according to their own personal tax rate (which would be lower than 45%, depending on your annual income).

NOT TO DO (THE CONS)

There are setup and administration costs involved.

Problems may occur if the trust is not properly established or managed. The trust will be a separate taxpayer, meaning the cost of another tax return.

If you lend money to the trust, you will have to charge interest at the SARS rate.

If the property is tenanted, the rental would be considered an income earned by the trust which would be taxed at a rate of 45% (whether the rent income is substantial or not). If the property is sold, the capital gains tax percentage is far higher than if the property was owned in your personal capacity. If you utilise the property as your primary residence but it is owned by the trust, there are provisions available but the relevant costs involved could prove the exercise impractical.

If the trust requires finance to purchase property, financial institutions are reluctant to give 100% mortgages. Procedures are far more complex if there is a default in payment, so banks require one or more of the trustees to stand surety for the loan. If the person who signed surety dies, the banks could submit a claim and subsequently sell the house to settle the outstanding bond if the estate does not have sufficient equity. The balance would be paid to the estate. There is no quick yes or no answer to the question “to do or not to do” when it comes to trusts, so it is best to make use of expert tax consultants or property practitioners to help you make the right decision taking into account your circumstances and goals. Whether purchasing a property for a trust or in your name, AED Attorneys can advise you about choosing the right option, and assist you in getting the paperwork right.

SARS penalties for delayed Transfer Duty payments

Written by Design on June 21, 2022. Posted in Conveyancing.

Buying a property is a massive investment into your future and can, for some, be a form of financial security. Purchasers should be aware of all the fees and costs that go into buying a property, though, as it is not just the purchase price that needs to be paid. Transfer Duty is an additional cost that has to be paid by a certain time. If it is not paid on or before the appropriate date, you could be facing some hefty penalties.

What are transfer duties

Whenever you buy a property, it has to be transferred to your name. The Transfer Duty is a tax levied on the value of the property when it is acquired (bought) by someone. The current rate at which the tax is levied is valid until 28 February 2023 and is detailed in the table below:

Value of the property (R)	Rate
1 – 1 000 000	0%
1 000 001 – 1 375 000	3% of the value above R1 000 000
1 375 001 – 1 925 000	R11 250 + 6% of the value above R1 375 000
1 925 001 – 2 475 000	R44 250 + 8% of the value above R1 925 000
2 475 001 – 11 000 000	R88 250 + 11% of the value above R2 475 000
11 000 001 and above	R1 026 000 + 13% of the value exceeding R11 000 000

This amount is payable within 6 months from the date of acquisition. The conveyancer responsible for transferring the property to the new owner is usually responsible for ensuring that this tax is paid in time and all conveyancers are required to be registered with SARS.

Transfer Duty should not be confused with the Transfer of Property costs which is the fee owed to the conveyancing attorney responsible for the transfer of ownership.

When is Transfer Duty applicable to be paid?

As per SARS and for the purpose of Transfer Duty the “property” on which Transfer Duty is levied includes”

Land and fixtures;
Real rights in land, excluding right under mortgage bonds or leases;
Rights to minerals or rights to mine including leases or sub-leases to mine for minerals;
A share or interest in a “residential property company”;
A contingent right to residential property or a share or member’s interest in a “residential property company” held by a discretionary trust (not a special trust), where the acquisition of the right is consequence of an agreement for consideration in relation to property held by that trust; or accompanied by a change in the debt or security structure of the trust; or accompanied by a change in the trust’s trustee; and
A share in a share block company.

When a property sale has conditions that need to be met, it is important to remember that the 6 months in which the amount should be paid is calculated from the date the agreement was signed and not the date that the conditions are fulfilled.

It is also important to note that a property sale is not subject to both VAT and Transfer Duty. If the seller is a registered VAT vendor and the property forms part of the seller’s enterprise, VAT will take preference and will need to be paid rather than a Transfer Duty. If the property is not part of the seller’s enterprise, Transfer Duty will have to be paid.

So, what if the Transfer Duty is paid later than 6 months?

SARS is clear that any late payment of a Transfer Duty will be subject to interest that is calculated at 10% per annum for each completed month. A complete month is calculated as the first day from the expiry of the interest-free 6 months to the date of payment.

Can I be exempt from having to pay Transfer Duty?

Yes, you can. Transfer Duty is not levied against properties that are being transferred (or not transferred as the case may be) for the following reasons:

Marriage in community of property;
Divorce;
Inheritance;
Cancelled transactions.

When you need conveyancing attorneys that will see to the timely and efficient transfer of your property, let us know.

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Documents executed inside or outside of South Africa

Written by Design on February 2, 2022. Posted in Conveyancing.

Documents that are signed in South Africa but need to be used internationally, and vice versa, need to be signed and executed correctly, and you have to make sure they are legalised. These documents could include certified copies, academic certificates, birth certificates, marriage certificates, police clearance certificates, power of attorney, etc.

Signing/executing documents in South Africa for use outside of South Africa

In situations where countries are a part of The Hague Convention[i]

These documents first need to be notarized, i.e., signed and/or executed in the presence of a Notary Public. The Notary Public will attach a Certificate of Authentication with his signature, stamp and seal.
The Notary Public will then send these documents to the High Court in the area where he/she practices. There, the Registrar will add an Apostille Certificate which authenticates the Notary Public’s signature

Your documents are now legal in all the countries that are part of The Hague Convention

In situations where countries are not a part of The Hague Convention

When a country is not part of The Hague Convention, two more steps are required.

The documents are submitted to DIRCO’s Legalisation Section to be legalised. The Department of International Relations and Co-operation is based in Pretoria.
The documents are sent to the Embassy/Consulate where they are to be used and authenticated.

Your documents can now be used in countries that are not part of The Hague Convention

Signing/executing documents outside of South Africa for use in South Africa

In South Africa, Rule 63 of the Uniform Rules of the High Court stipulates how documents signed outside of South Africa can be authenticated. These documents need a Certificate of Authentication from:

The head of the South African diplomatic/consular mission.
Consul-general, Consul, Vice-consul, or consular agent for the United Kingdom in that country.
Any government authority of a foreign place permitted to authenticate documents under the law of that country.
Any Notary Public in the United Kingdom of Great Britain and Northern Ireland, Zimbabwe, Lesotho, Botswana, or Swaziland.
In the case of a document being executed by a person on active service, a commissioned officer of the South African Defence Force.

If the prescribed certificate is attached, you can use the document in South Africa.

[i] The Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents is a multilateral treaty developed by the Hague Conference on Private International Law (HCCH). It replaced the cumbersome legislation that was required for cross-border mobility with a single formality – the issuance of an Apostille. Currently 120 are a part.

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Why rates and levy clearances are issued 4 months in advance.

Written by Design on November 16, 2021. Posted in Conveyancing.

It’s not for naught that we need knowledgeable attorneys when we embark on the journey selling or buying a home. There is a plethora of laws that we need to keep track of and hoops we need to jump through to ensure that the transactions and conveyancing goes smoothly. Being able to entrust the conveyancing to an expert just makes things easier, but that does not mean that we don’t want to know what is happening and why – it is, after all, our home ad future that is on the line.

One document without which a property transference cannot be completed is a rates clearance certificate. If you are purchasing or selling a sectional title, you also need a levy clearance certificate. If you don’t have them, the transfer is dead in the water, but what are they and why are they issued four months in advance?

What are these documents?

The rates and levy clearance certificates are, essentially, documents proving that the current owner of the property does not owe any outstanding money on the property, either to the municipality or the Body Corporate.

The Rates Clerance Certificate

This certificate is specifically awarded by the municipality in which the property is located. Both a freehold and a sectional title property requires a rates clearance certificate. The conveyancer responsible for the transfer will request the Rates Clearance figures from the relevant local authority. These figures include outstanding debts from the previous two years on municipal taxes, electricity, water, sewerage, refuse, etc. Once these are issues, the conveyancer will request the outstanding amount be paid by the current owner and upon a proof of payment being made available, the Rates Clearance certificate should be issued. The figures should normally be available in 10-14 days and the certificate within 2-3 days once payment has been made. By law, this certificate is valid for the 60 days from the date of issue.

The Levy Clerance Certificate

A Levy Clearance is only required if the property being transferred is a sectional title. In this case, the conveyancing attorney requests the Levy Clerance figures from the Body Corporate. It indicates the amount that the current owner still needs to pay to the Body Corporate to settle the last debts. When this amount has been paid or payment arrangements made and the Body Corporate is satisfied, they can provide the Levy Clerance certificate that the conveyancer requires to submit the next documents to the Deeds Office.

Why are they issued 4 months in advance?

When the Rates Clerance figures are being calculated, the municipality usually works it out as the full amount from the last two years that are owed and then the monthly average extrapolated over the next 4 to 6 months.

This is done because property transfers can take some time to complete, and the municipalities need to ensure that they are paid what is due to them by the seller in the months that the transfer is being completed. The Levy Clerance certificate also falls into this time frame as both documents are required for the successful transfer of a Sectional Title. These figures are also calculated to the estimated date of the registration of the transfer – 4 to 6 months.

If you need an expert conveyancer to help you jump through all the legal hoops of transferring a property, don’t hesitate to get in touch with AED Attorneys. Our friendly staff makes it their mission to ensure your property transfer is handles with care and as quickly as possible.

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Is Eskom clearances necessary for transfer of property?

Written by Design on November 16, 2021. Posted in Conveyancing.

The process of selling and transferring a property requires various legal documents to be signed, accounts to be settled and changed, certificates to be requested and more. Your conveyancing attorney will oversee this entire process for you, but in a world where knowledge is power, it is still important for you to know exactly what is happening, what documents you actually require and why.

When you look at the certificates you require, there are various categories – your Clearance Certificates, Compliance Certificates, and a Homeowners Certificate.

What do these certificates entail?

Your Clearance Certificates are certificates of proof from (a) your municipality and (b) the Body Corporate if you are selling a Sectional Title that any outstanding debt you had has been paid in full or that an arrangement (with the Body Corporate) has been made to pay the outstanding debt. Without these certificates it is impossible for the transfer of a property to continue.

The Compliance Certificates are required for electrical, electric fence (where applicable), gas, and beetle (in coastal regions) certificates. These need to be obtained prior to registration. The offer to purchase will usually specify the certificates that are required, and the bond attorney could also need these certificates to obtain consent to lodge the matter in the Deeds Office.

The Homeowners Certificate is only necessary if the property is part of an estate with a Homeowners Association. Similar to the Clearance Certificates, the Homeowners Association must confirm that there are no outstanding debts on the property and that all conditions have been met, for example the purchaser agreeing to become art of the Homeowners Association.

By now you would have noticed that Eskom is not mentioned in any of these certificates that you require. So, what do they have to do with anything?

Where does clearance from Eskom fit in?

You do not need a certificate from Eskom for the transfer of a property to be completed. The Rates Clearance Certificate that you do require from the municipality in which the outstanding debt from the past two years as well as a monthly average for the next 4 to 6 months is calculated on your municipal bills will include your electricity.

It is, however, always wise to ensure that your Eskom bill is fully paid and that all these accounts for the property are transferred to the new owner, lest you are held liable for the purchaser’s consumption.

If you require attorneys, you can trust and that has your best interests at heart, don’t hesitate to contact AED Attorneys. Our extensive experience in conveyancing means that we know how to transfer your property quickly and carefully.

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What can you do when a co-owner of a property dies or wants out of the property.

Written by Design on September 23, 2021. Posted in Conveyancing.

Buying a property in a co-ownership agreement with a loved one, spouse, or business partner is a means for many to get into the property market. That property can be used as a primary residence, a business location or as a rental property and both owners can enjoy the benefits of it. Things change, however, and there are many reasons that one owner can no longer own the property. They could have passed away, they might want to emigrate, the relationship could have turned sour, or they might simply want to downsize their portfolio. Regardless of the reason, property ownership is a legal commitment and various laws dictate what happens to a co-owned property. These laws can differ greatly depending on the reason as to why one owner exits the agreement. Let’s have a look at some of the most prevalent situations.

The relationship between co-owners

The relationship between co-owners can often influence how the co-ownership came about and what needs to happen to the property when one owner passes away or wants out. In any co-ownership situation, the best practice is to always have a detailed contract set up when the property is purchased and to have this contract include what is to happen when:

An owner passes away (and he/she is not a spouse)
A spouse married in community of property passes away
An owner wishes to sell
The owners wish to part ways (whether it be a business relationship that breaks down, a divorce, etc)

When an owner passes away

When an owner, who was not a spouse, passes away, one would wish that the contract and the co-owner’s will stipulated what is to happen with the property. Half of the property will be placed in the deceased estate and the condition of the deceased estate, for example, the individual’s debt, can influence what happens. When a business partner passes away and you had a business succession plan and legal agreements, chances are that they would stipulate whether or not the surviving partner receives the share upon payment to the estate. The agreement and the deceased partner’s will could stipulate whether a family member inherits half of the property. Regardless of who receives the deceased individual’s shares, you will need to transfer the property.

A spouse married in community of property

In this instance, you also own the property half-half. The entire property would go into the deceased estate and the estate needs the be processed, debts paid, and all other matters relating to it dealt with. If the deceased estate’s debt, for which the surviving spouse can also be held accountable, is of such a nature that assets need to be sold to settle it, the property could be in danger of being sold. If this is not the case, the deceased individual could have his/her surviving spouse inherit half of the property in which case the entire property will need to be transferred to the surviving spouse as sole owner, and you might need to re-qualify for the bond on the property. If the beneficiary is another family member, half the property will go to him/her.

The one owner wishes to sell

If the one owner wishes to sell and the other does not, it could be stipulated what is to happen in the contract. Usually, the other owner would have the first option the buy the 50% of the shares that do not currently belong to him/her. If both are satisfied with the selling price, it could be a simple transfer of the property ownership. It could happen that an agreement cannot be reached in which case the property could be sold as a whole and both owners receive their share. The now previous owner could decide to buy the property again as a sole owner or find a new partner.

If the owners wish to part ways

This can be very similar to the situation above and it often happens the property as a whole is sold with each owner receiving his/her share, or the one owner buys out the other.

Co-owning a property is a bit more complicated than sole ownership. Our best advice would be to have a clear and nuanced contract that cover all reasonable eventualities concerning the death or departure of one owner. It avoids any unnecessary complications and confusion. If you need any assistance with the conveyancing of a co-owned property or the legal matters concerning the deceased estate of a co-owner, don’t hesitate to get in touch with the AED Attorneys. We understand that the loss of a loved one, the administration of a deceased estate, and the transfer of property can often all be part of the same traumatic event. Our single team of dedicated experts will take away the worry and stress when they handle it all.

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