Selling Your House

General

The purchase or sale of a home is probably the single largest financial transaction a person will be involved in during his/her lifetime. We hope that this information will provide some information and background to such a transaction from a Seller's point of view but we emphasise that it is no substitute for seeking proper legal advice from your attorney.

The main stages of the sale and transfer of a property are as follows:

• Marketing of your property. This can be done privately but is usually done by an Estate Agent instructed by you.
• The Estate Agent finds a Purchaser and prepares an Offer to Purchase/Deed of Sale for signature by the Purchaser and Seller. Before signing, you should consult your attorney to ensure that the terms of the Offer to Purchase/Deed of Sale meet the your requirements and you are adequately protected.
• Signature of the Deed of Sale by the Purchaser and you.
• Instructions to the your attorneys to register the property in the Purchaser's name.
• Preparation and signature of the conveyancing and bond registration documents by you and the Purchaser.
• Lodgement of the conveyancing and mortgage bond documents at the Deeds Office for registration.
• Registration of the property in the name of the Purchaser, the Purchaser's mortgage bond and payment of the net sale price to you.

The People You Will Deal With

The Estate Agent

In the early stages the Estate Agent is the most important person. Most Estate Agents prefer a "sole mandate" i.e. the right to market your property for a period to the exclusion of other agents but you are entitled to appoint one or more. If you do, be careful to appoint one or more reputable agents registered as members of the Institute of Estate Agents .

It is essential that you choose Estate Agents who:

• know and understand your requirements;
• are familiar with the area;
• are able to properly advise as to the price you can expect for the house;
• will market the property enthusiastically;

The Estate Agent markets the property by:

• placing advertisements in newspapers (a very expensive process which accounts for a substantial portion of the commission);
• showing the house to their existing customers;
• showing it as a show house;
• listing on a website.

The Estate Agent will find a Purchaser and submit a Deed of Sale/Offer to Purchase signed by the Purchaser to you. Although you may be advised that it is not necessary to do so, a prudent Seller will submit the Deed of Sale to his/her attorneys at this stage to ensure that the agreement reflects the Seller's requirements. Once signed by the Seller, the Estate Agent must forward the Deed of Sale to the Conveyancer you have chosen as soon as possible to enable them to commence the conveyancing process.

Estate Agents are subject to a code of ethical conduct and they are bound to look after your interests as Seller at all times. The Estate Agent is remunerated by you for his work and expenses (commonly referred to as a commission or brokerage) which is calculated as a percentage of the sale price. The current Estate Agent's commission recommended by the Institute of Estate Agents in respect of residential property is 7,5% plus V.A.T. where applicable. You are free to negotiate a lower commission percentage if you wish and generally most Estate Agents are flexible in this regard.

A Seller is always at liberty to market and sell his property himself without the use of an Estate Agent's services. In such an event it is imperative that the Deed of Sale be prepared for the Seller and Buyer by a professional person and the prudent Seller will refer the matter to his attorney for the preparation of this document.

The Conveyancer

Conveyancing is the legal process whereby a person becomes the registered and lawful owner of fixed property. Only a conveyancer is entitled to attend to the registration in a Deeds Office of various transactions involving fixed property. A Conveyancer is an attorney who has passed a special examination which entitles him to practice as a conveyancer. It is said that our system of land registration is one of the best in the world and it maintains extremely high standards. Conveyancers are part of this system. As a result property owners and financial institutions can be certain that their rights of ownership in property are unassailable and this security of tenure is an important part of our economy.

The Conveyancer's Responsibilities:

• Check the terms of the Deed of Sale.
• Ensure that the deposit (if any) is paid and dealt with as provided for in the Deed of Sale.
• Arrange for the cancellation of the Seller's Mortgage Bond registered over the property - note you must continue to effect payments on your bond until the property is transferred to the new owner.
• Ensure that the Purchaser's Bond has been granted. He must furnish the Conveyancers registering the Purchaser's Bond with the necessary information to enable them to prepare the Bond documents.
• Check Deeds Office records whether there are any interdicts registered against the property or the Seller such as attachments or insolvency, which would prevent the Transfer from being registered.
• Ensure that any occupational interest provided for in the Deed of Sale is paid or collected.
• Prepare the documents for signature by the Purchaser and Seller and arrange signature after checking their personal particulars - the Conveyancer must ensure these personal particulars are absolutely correct. This requires an investigation into correct names and identity number, marital status, domicile at the time of marriage and other relevant factors.
• Obtain a Rates Clearance Certificate from the Local Authority. The annual rates for the property (July to June) must be paid in full before this clearance can be obtained. Often outstanding water and electricity must also be paid.
• Pay Transfer Duty - a tax based on the value of the property. The Purchaser is normally required to pay the Transfer Duty prior to registration of transfer as a receipt of proof of payment must be submitted to the Deeds Office before registration of transfer can take place.
• Prepare the new Deed of Transfer for registration in due course.
• Lodge the Deeds and supporting documents (e.g. rates clearance certificate, transfer duty receipt) at the Deeds' Office for examination. All the linked transactions must be lodged simultaneously - that is to say, the Transfer, the Cancellation of any Bond, the new Bond and, sometimes, the Transfer of the Purchaser's property.
• Register the Transfer if the Deeds are approved for registration and if the financial aspects are in order:
• The balance owing under the existing Bond must be paid.
• The deposit must be collected from the Estate Agent.
• The money secured by the Purchaser's new Bond must be collected.
• Any shortfall, including the Purchaser's share of rates, occupational interest, etc., must be collected.
• On registration the Seller must be paid the net proceeds of the sale price.
• Keep you, the Purchaser and Estate Agent fully informed of the anticipated date of registration and of any problems which might cause a delay.

The Deed of Sale may specify a date of Transfer, otherwise 6 weeks will normally be required from the date the Conveyancer is instructed to attend to the registration of transfer.

Seller's responsibilities:

• Appoint Estate Agent.
• Advise Estate Agent of the name of the Seller's attorneys who are to attend to the transfer.
• Sign Deed of Sale after discussion with Attorney.
• Furnish the Conveyancers with the information they need, on request.
• Furnish the Conveyancer with the Title Deed if you hold it yourself.
• Sign Transfer documents when requested to do so.
• Maintain Bond and Rates payments either until Transfer or until the Conveyancer advises you to stop.
• Give occupation of the house to the Purchaser on the date agreed. The house must be clean and tidy and in the condition it was when sold.
• Keep the insurance on the property in force until Transfer. If you have a Bond with a financial institution this will be done automatically until the Bond is cancelled when the insurance cover will also lapse.
• Ensure that the necessary beetle and electrical inspections have been done if so required by the Deed of Sale and any problems found are attended to - the Estate Agent or the Attorney will assist in ensuring that this is done but it remains your responsibility.

Value Added Tax
If your property forms part of a business enterprise or you conduct a business enterprise from part of your property and his enterprise is registered as a Vendor under the Value Added Tax Act, then the sale of the property will be regarded as a Vatable Transaction and you will be obliged to account to the Revenue Authorities for VAT on the selling price or part thereof. This could have serious financial consequences for you and it is vital that you seek professional advice from an Accountant or you Attorney in this regard in order to structure the sale and purchase price to avoid what might turn out to be a considerable financial loss.

Some terms and conditions of a Deed of Sale:
Beetle Free Certificate
There are a number of woodborer beetles which damage the woodwork of houses. Two types are so called "notifiable" beetles - Oxypleuris Nodieri and Hylotrupes Bajulus. In addition, there is a so called "furniture beetle" - Anobium Punctatum. Deeds of Sale do not usually include a reference to "furniture beetle", but financial institutions sometimes require a certificate in this regard. Beetle free clauses sometimes include reference to dry rot. It is usually the Seller's responsibility to attend to any beetle infestation in accordance with the Deed of Sale.

You could be put to considerable expense to replace infested timbers, but a Purchaser is entitled to know that he is getting a house without hidden problems. For practical reasons only the accessible portions of the house are inspected and floors under fitted carpets or eaves will not normally be inspected.

Ideally you should have his house inspected for beetle infestation prior to entering into a Deed of Sale. The firm inspecting your property will give a quotation for any beetle treatment or replacement of infested timbers and you would then be aware of the costs involved in this regard.

Electrical Compliance Certificate:
Any homeowner or home/flat occupier is obliged to be in possession of a current Electrical Compliance Certificate. It is normally the Seller's responsibility to furnish this. The certificate can only be issued if the installation is reasonably safe and free from defects. Again for the reasons stated above it would be prudent to have the electrical installations inspected prior to binding yourself under a Deed of Sale.

Voetstoots:
The Purchaser buys the house as he/she sees it. If there are obvious problems or patent defects the Seller need not point them out. The position with hidden or latent defects is different. If the Seller deliberately conceals a latent defect he/she may have acted fraudulently if he/she fails to point it out, otherwise the Seller is also not obliged to point out latent defects he might be aware of.

Address Domicilium Citandi et executandi:
This is the street address elected by a party as the address at which all legal notices in the event of a dispute may be served. Be careful when choosing this address as service of any legal documents at the address, even if you may no longer be residing there, will be regarded as good in law and it will be deemed that you have received the process served.

Transfer and Bond costs:
Normally paid by the Purchaser and tariff guidelines are laid down from time to time by the Law Societies. You will have to pay for the cost of canceling the existing Bonds and for any additional services you may have requested the Conveyancers to provide on your behalf.

Occupational Interest:
This is the equivalent of rent, payable as specified in the Deed of Sale, by the Purchaser from the date of occupation of the property to the date of transfer in his name. If no occupational interest is specified and the occupation date is different from the date of transfer, a rate of occupational interest will have to be agreed upon.

Fixtures and fittings:
The sale will include, unless specified, all objects which are actually attached to the structure, such as light fittings, pool filters, mirrors screwed to walls, twirl dryers, fitted carpets, etc. To avoid disputes it is important for you and Purchaser to identify in the Deed of Sale what fixtures and fittings do or do not form part of the Sale .

Risk and Insurance:
Unless the agreement provides for a specific date, for example the Date of Possession, risk passes to the Purchaser on signature of the Deed of Sale. A prudent sell would maintain his insurance cover until registration of transfer.

Possession:
When the Purchaser takes control of the property including the responsibility for any tenant and the rights to any rental.

Vacant Occupation:
The Purchaser must get an empty house, i.e. free of any occupiers.

Liability for rates:
The annual rates have to be paid in full before clearance can be obtained for transfer. Normally the Seller pays a pro rata share up to date of possession. Thereafter the Purchaser is liable.

Should you at any stage require assistance herein, please call our helpline or schedule an appointment with one of our attorneys. Please note that this information is not a substitution for proper legal advice and whilst every effort has been made to ensure the accuracy of the contents hereof, no liability shall follow from a reliance hereon.