GUIDELINES FOR SELLERS WHEN SELLING IMMOVABLE PROPERTY
Selling your property is not just about accepting the highest offer — there are legal and financial responsibilities to carefully consider. Herewith some guidelines when you decide to sell your property:-
- Mandate with the Estate Agent:
Ensure that the terms and conditions of any mandate granted to an Estate Agent are explained, and that you understand what you agree to. Estate agents should also explain the legal and practical implications of the mandate to the seller before he signs it.
The Property Practitioners Act (PPA) (Section 67) requires property practitioners to ensure that sellers complete and sign a disclosure form with them. This form must be attached to any agreement for the sale or lease of a property. If such a Disclosure Form was not completed, signed or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.
Before completing and signing this form, ensure that you are aware of what you are declaring, and the legal consequences thereof.
- Giving Notice that your Bond will be Cancelled:
If you have a mortgage bond registered over your property, with most financial institutions, a 90-Day Notice period is required, failing which banks may charge an early cancellation penalty.
- Municipal Plans: South African law doesn’t mandate that sellers provide approved building plans during a property transfer. While the “voetstoots” clause (selling as is) protects sellers from minor defects, it doesn’t cover undisclosed latent defects, such as unauthorized structures. If a seller knowingly hides the lack of approved plans, they could be held liable. Sellers should be transparent about the status of building plans during the sale process to avoid future complications.
- Compliance Certificates – Seller’s Responsibility:
- Electrical Certificates: Must be issued by a certified electrician and is valid for 2 years from date of issue, and are transferrable provided that no new installations, upgrades or modifications have been done after date of issue. This certificate also verifies that if there is a solar panel system, that same is installed correctly and safely, adhering to South African regulations and electrical codes.
- Water Certificate: In terms of Section 14 of the Water By-Law the Seller must, before transfer of a property, submit a certificate of compliance from an accredited plumber.
- Beetle Certificate: This compliance certificate is not a requirement by law but has become a practice in the sale of property, particularly in coastal provinces, where the wood borer beetle is commonly found like in coastal areas. It is valid for up to three months from the date of issue.
- Gas & Electric Fence (if applicable): This is legally required upon transfer of property ownership. The certificate must be issued by a registered gas installer and must conform to the SANS 10087-1 standard for LPG installations.
- Electric Fence Certificate: This certificate is generally required when a property with an electric fence is sold, ensuring the new owner has a safe and compliant installation and comply with Occupational Health and Safety Act of 1993 and the SANS 10222-3 standard. It is valid for a specified period, whereafter a new one is required.
- Capital Gains Tax (CGT):
- Ensure that your taxes are up to date and that you are aware of any tax liabilities that might be triggered with the disposal of immovable property.
- Primary Residence Exclusion applies when a gain from R2 million and up has been made upon the disposal of immovable property.
- Before accepting an Offer to Purchase:
- Careful consider all terms and conditions of the Offer
- Clarify transfer and occupation dates, deposit arrangements, and timelines.
- Understand who pays what: conveyancer fees, bond cancellation, rates, etc.
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