While some delays cannot be foreseen, it’s possible to reduce the risk by having all your ducks in a row from the onset…
All too often Conveyancers, the Deeds Office or the City Council are blamed for the delays. In many cases this criticism is justified, however, often delays can be prevented if Sellers take certain steps before they sell their property.
In order to avoid unnecessary frustration it is vital that parties to the transaction understand the processes involved and that delays are sometimes inevitable. Besides possible delays there are a number of processes that need to be followed before a house can be registered in a purchaser’s name. Conveyancers handling the transfer of property find that many are ignorant of the steps to be taken to complete a property transaction, which often causes unnecessary delays. Checking that these steps have been taken a seller can prepare themselves before they become an issue – in most cases, going ahead without observing these essential issues may delay and quite possibly jeopardize the sale agreement.
Here are some steps you can follow to prevent delays:
Rates are Paid up
- The City Council, in the area where the property in question is located, will not issue a rates clearance certificate until all outstanding rates and services have been paid, together with the payment of advance rates and services. A property cannot be transferred without a valid rates clearance certificate.
- If the seller is in arrears with their rates or cannot afford payment of the required advance amount; then they will either have to obtain bridging finance or a short-term loan.
- If the home is bonded, ensure that all the payments on the bond are met and paid up and,
- give the bank sufficient notice that you intend to sell and to cancel the bond. If this is not done, the bank is entitled to charge a penalty for early termination of the bond.
- The notice period is normally up to 90 days. If the bond is cancelled before then, there could be penalties payable. The transfer may therefore be delayed as a result of the notice period.
- You are not committing to selling but, merely notifying the bank of the possibility, and you can keep on renewing the cancellation if you don’t sell timeously, or revoke the notification if you change their minds.
- If the seller has no bond, he or she must ensure that they have the property’s original title deeds. If there is a bond, the original will be lodged with the bank.
Sectional Title Units
- Have a copy of the latest financial statements and the management and conduct rules of the body corporate before you sell your unit
- The bank that the buyer has applied to for a bond would require these before they grant the loan.
- In some cases the body corporate’s financials are not up-to-date and this may lead to the deal not going through.
- For sectional title unit, gated community, estate or a similar development, it is important to sort out any issues with the homeowners association or body corporate regarding levies or certain living and design guidelines, before signing a sale document.
- There is often a title deed requirement that such an association must consent to the sale. If there is a dispute between the association and the seller, they may be entitled to withhold such consent, until the dispute is resolved to their satisfaction.
- Therefore, sellers must make sure that disputes are resolved with such an association before the property is sold. It will be unfair to the purchaser if the transfer is delayed because of an existing dispute between the seller and the body corporate or homeowners association.
- Move out of the sold home on the agreed date and do not try to delay this, especially at the last minute.
- The problems late handovers can cause to the buyer, who has probably vacated his previous premises on time, can be serious.
- Date of transfer is an estimated date and cannot be guaranteed in advance
Other causes for delays include, but are not limited to:
- Insufficient information and documents for FICA of the buyer or seller.
- The buyer or seller not signing required documents at the stipulated and arranged times.
- Failure by the buyer to obtain a loan within the original allowable period.
- Failure by the buyer to pay required costs, such as bond registration and transfer costs in a timely manner.
- Delays in issuing clearance certificates by the municipality or the body corporate.
- Delays in the provision of the required and valid electrical compliance certificate, gas compliance certificate, or plumbing certificate.
- Delay by the seller of a non-bonded property in providing the title deed of the property.
As the transferring attorney and agent work closely together behind the scenes to ensure a smooth transfer, it is always an advantage if they already have an established working relationship. A seasoned agent will recommend appointing an accomplished conveyancing attorney who is really on the ball.
There should not be too many problems to prevent if clients are upfront with their realtors, an experienced estate agents will guide their clients every step of the way.
These steps are also not applicable to all sellers in every situation, the list of possible delays in a transaction varies from one transaction to the other and the possibilities are endless. The underlying principle is that a prepared seller is an essential ingredient to a smooth and successful transfer process.