The Property Practitioners Act also prescribes that a disclosure be done when the mandate is taken. The property professional must also gather the necessary information and documentation from the buyer. And the more accurate the information obtained at the start of the process, the quicker the transfer process can be completed.
The checklist below is designed to help to keep the dealmaking process on track and should be especially useful during the conveyancing process.
Information/documentation to request when taking the mandate:
Information/documentation to request from the seller and buyer:
Important: The above information and documentation should be requested as early in the process as possible.
Circulating information to the seller and buyer:
It’s crucial that certain information is communicated to the seller at the outset so that they understand the process. It’s also very important to inform them of the services that can be provided in this regard.
Information to pass on to the seller:
Before selling the property, the seller must ensure that all rates and associated services have been paid and that the municipal account is up to date. The Municipal Systems Act compels a seller to pay rates up to five months in advance when applying to the Council for the Rates Clearance Certificate (RCC).
The RCC is available as an abridged certificate which states that all debts for the previous two years have been paid as well as a full clearance certificate which states that all debts associated with the property have been paid. The RCC must be valid for 120 days from issue. Following registration, the account is reconciled and the pro-rata excess is refunded to the seller by the Council.
In the case of a sectional transfer, the seller must obtain a levy clearance certificate from the Body Corporate or managing property professional acting on their behalf certifying that all levies in respect of a sectional title are paid in full. The certificate must be calculated and valid for a period extending beyond the date of transfer. A Body Corporate can request payment of any arrear and future ‘special levies’ as well as any unpaid ‘non-development penalties’ before they will issue a clearance certificate. An appropriate adjustment will be made following transfer.
The seller must also get an Electrical Clearance Certificate (ECC) from a qualified electrician registered with the Electrical Contractors Board – this serves as proof that the electrical installations comply with the rules of SANS. The ECC is valid for two years provided that installations are correctly maintained during this period.
Alterations to installations must be covered by a separate certificate. Alternatively, the entire system may be rechecked and a new certificate issued. Should the property be damaged as a result of an electrical fault, the seller’s insurance will require a valid certificate. Not being able to do so may result in your claim being declared invalid. In addition, if a person is injured as a result of an electrical fault where no valid ECC is in place, the owner could be held liable for medical costs and damages. Gas and electrical fence certificates must also be obtained if applicable.
The same would apply to gas and electric fence certificates as above.
If the property is bonded, the bank will instruct its attorneys to cancel this bond – the seller is responsible for covering the related costs.
Information to pass on to the buyer:
The buyer must be informed of the bond and transfer costs involved – the detail can be left to the conveyancers to explain. The transfer duty is an acquisition tax that must be paid by the buyer of immovable property to enable transfer of the property into their name. Payment is made by the attorneys to the Receiver, who issues them with a receipt. No transfer may be lodged at the Deeds Office without being accompanied by the Transfer Duty Receipt.
The transfer duty should be refunded by the Receiver of Revenue if the transaction is mutually cancelled or no breach or specific performance is enforced/claimed.
The following information is key to speeding up the conveyancing process:
Written by Wessel de Kock