FAQ

Property terminology

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   Commercial property

   A property used for business or office purpose, not for residential purpose.

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   Conveyancer

   An attorney who is qualified to attend to deeds office transactions. Deeds office transactions involve the transfer of a property from a seller to a purchaser, or the registration of mortgage bonds and servitudes.

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   Domicile

   The place where a person is permanenty resident.

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   Huur Gaat Voor Koop

   Huur Gaat Voor Koop means ‘Lease goes before sale’. Where leased premises are sold before the lease has expired, the tenant may in terms of the 'huur gaat voor koop' rule remain in occupation of the premises until the lease expires. In the case of a long lease (ie a lease for a period of 10 years or longer), this applies only if the lease is in writing and registered against the title deed of the leased premises, or if the purchaser at the time of conclusion of the sale knew that the lease was a long lease.

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   Industrial property

   Property used for industrial purposes, for instance factory premises.

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   Mandate

   A mandate is an instruction or authority given to an estate agent to offer a particular property agency service, sell a property..

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   Null and void

   Without any legal effect. An agreement of sale or lease which is null and void is not valid in any respect and cannot be enforced by either party.

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   Resolutive condition

   A clause in an agreement of sale or lease which states that the agreement will terminate on the occurrence of an event specified in the agreement. An example of a resolutive condition is a condition in an agreement of sale of a proposed sectional title unit. Often those agreements state that the agreement will terminate if the sectional title plan is not registered before or on a certain date.

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   Right of pre-emption

   'Right of pre-emption' or the 'right of first refusal' is the contractual right entitling a person to make the first offer to buy a specific property.
   This right is often added to lease agreements. Should the lessor wish to sell the property, the lessee has a right of pre-emption to purchase it.

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    Title deed

    A document filed which in a deeds office. A title deed includes details of a property and its owner. This official document serves as legal proof that a person is the owner of a defined property. If other persons have rights over the property (e.g. where a financial institution holds a mortgage bond over the land), details thereof are also recorded on the title deed.

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    Voetstoot

    This little Afrikaans word mean ‘as is’. If a voetstoot clause is included in an agreement of sale of immovable property, the seller cannot be held liable for latent defects in the property, ie. defects which are not visible upon a reasonable inspection of the property, such as a leaking roof. A voetstoots clause does not, however, protect a seller if he knows about a latent defect but fails to disclose it in order to defraud the purchaser.

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    Zoning

    Zoning limits the purpose for which a property may be used, eg. residential, commercial, industrial, educational, etc.

Property search

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   How does one search for property in South Africa?

   There are several ways to search for suitable property. Those include print and online marketing material. Cape Town's weekend newspapers like the Cape Argus contain a big pile of property pages. Properties are listed according to the estate agency in charge of selling the property, so searching for a property in a certain area can be time consuming. Big estate agencies like Pam Golding, Rawson Properties, Engel & Voelkers etc. offer regularly updated websites. An additional option is to phone an estate agency and ask for assistance. However, buyers have reported to only having been taken to some properties and not to others. This is not surprising seeing that estate agents work for regional franchises and will try to sell the properties they can earn a commission on.

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   Where do I find privately sold property?

   Despite transfer duties being far lower, due to high crime rates property is not widely available through private sale. However websites like Gumtree, BidorBuy and PrivateProperty have properties that are listed privately. Private Property became the busiest property site in South Africa by focussing on the private seller.

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   Is there a way to figure out which areas we should take into consideration when buying property in Cape Town? We are scared to buy in an area with high crime stats and other hidden problems.

   You could rent a car and drive through Cape Town's suburbs. This will give you a good first impression on which suburb you want to have a closer look at. Keep in mind that this will only give you an impression and not inside knowledge of the area, such as Woodbridge Island will be one of the first suburbs affected by rising ocean or Nordhoek beach is notorious for muggings.

   Your considerations should include the following:
   - Where would you do your local shopping
   - What would be your local beach
   - How far are creches and schools
   - How far is the next township
   - How far is it to gyms and other leisure activities

   If you are not familiar with Cape Town we urgently recommend to use the advice of a local or property expert.

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   Should I be checking out re-possessed property as well?

   Buying a repossession could land you a bargain or a shocking money pit. Property selling on auction at discounts of up to 40 per cent may be tempting, but you must tread carefully.

   Properties auctioned off aren't necessarily hidden gems. If a property comes up at auction, it means the owner was having financial trouble, so the property might have been neglected for a while. There are cases where the property has been completely trashed. Possible dangers include also claims against the properties such as tax liens, contractor liens, or a second mortgage. Potential buyers can avoid this risk by working with an auction house to ensure that the property has all the paperwork in order.

   Buying a property at auction often requires the buyer to have cash flow available. Check the requirements first - each auction house and county has its own payment requirements. Down payment amounts and methods of purchasing often depend on the property and the auction house. However, cash is needed to secure your bid. E.g. you may need a cash check for the minimum bid amount of the property that you want to buy.

   Don't become to excited if you bid for a property and you actually got the winning bid. In some cases, you will not be allowed to purchase the property. The winning bid is subject to lender confirmation. Sometimes, auctions have a hidden reserve price that sets a lower limit on the minimum acceptable price. It is paramount that you familiarize yourself with auction terms ahead of time to avoid any unwelcome surprises.

   This might come as a surprise to you but is common practice in South Africa. Properties on auction sometimes do not allow for a home inspection or even provide a view of the inside prior to the auction. This means you might buy something that you have seen on pictures or from the outside. Without first hand information or having even looked at the property, it can be hard to know what you are getting yourself into, what the property's repair costs will be or the true value of property.

   In South Africa in addition to dealing with the above a real danger are squatters. Your new dream home can either be occupied by the former owner himself or any arbitrary squatter. If your new property is occupied you will have to evict them - a process that can be unpleasant at best, and lengthy and expensive at worst.

Property law

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   What is the cooling off period and does it apply in South Africa?

   In South Africa the Alienatin of Land Act 68 of 1981 applies. This act states that certain purchasers of immovable property have
   the right to revoke an offer to purchase or terminate a sale agreement within 5 days after the offer or sale agreement was signed by the purchaser. This is generally referred to as a ‘cooling off right’ or 'cooling off period'. However, the right to cool off applies only in respect of properties which are used (or intended to be used) mainly for residential purpose an only if the purchase price is R250 000 or less (a higher amount may be
   prescribed by the Minister of Trade and Industry from time to time). Other exceptions are when the buyer is a company, close corporation or a trust.

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   Is the offer of purchase agreement legally binding?

   An offer to purchase is a legally binding contract. Once accepted by the seller and any suspensive conditions are met, the buyer is committed to the purchase.

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   What is 'conduct deserving of sanction'?

   'Conduct deserving of sanction' is unethical or improper conduct on the part of an estate agent. The grounds constituting for this law is set out in the Estate Agency Affairs Act 112 of 1976. Disciplinary steps can be taken by the Estate Agency Affairs Board against an estate agent found guilty of conduct deserving of sanction.