As a consumer you would have applied for debt review if you were struggling financially.
Debt Review or Debt Counselling is governed under laws of the National Credit Act 34 of 2005 which was promulgated in 2007. It has protected consumers ever since from having their assets repossessed.

Your Debt Counsellor would have made application to court confirming that you were over indebted. The Debt Counsellor would have obtained a Court Order which granted you legal protection during the review process until payment of the final instalment. Once a consumer has settled all debt in full, he/she will be issued with a Clearance Certificate by the Debt Counsellor. Once the certificate is issued, all credit bureaus and credit providers will be notified that you are no longer under debt review and you will be able to purchase on credit again. Remember to be wise, make informed decisions especially when you transact and enter into any credit agreement. Do you really need that item?

It often happens that a consumer is over-indebted and applies for debt review. They later find that their financial circumstances have changed due to a dramatic increase in their salary and they are now able to service their original monthly debt obligations. They would have a prima facie case for cancelling their debt review. A formal consult with the consumer will establish whether there are merits to their case. You should only consider coming out of debt review if you are able to manage payments comfortably again or if you have settled all your debt. Another reason could be where there is only one long term agreement remaining such as a home loan. Once all other debts are settled, the consumer should be able to exit from Debt Counselling and pay the bond directly with the credit provider. Before the withdrawal guidelines were implemented, a consumer could simply be removed from debt review by requesting his debt counsellor to issue a 17.4 Form. This is no longer the case and formal processes must be followed in certain instances in order to be removed from Debt Review. If the Debt Counsellor did not issue a 17.2 Form you will be able to be removed from Debt Review without the need to approach an attorney for assistance.

The Withdrawal Guidelines which are listed below stipulate when Debt Review may be cancelled:

WITHDRAWAL GUIDELINES – 002/2015 – (NCR)
INTRODUCTION
The National Credit Act (“the Act”) introduced debt review as a debt relief measure for over-indebted consumers. This is a statutory process which is only conducted by registered debt counsellors.
The process to withdraw or terminate debt review by the consumer or debt counsellor is not
specified in the Act; however the credit industry has in the past years developed a voluntary
withdrawal process and a Form 17.4 to facilitate the withdrawal process either by a consumer or DC.
The application of this voluntary withdrawal process was overturned by the judgment granted
in the case of Rougier v Nedbank which provided clarity on whether a debt counsellor has the
statutory power to withdraw or terminate debt review. In terms of this judgment any act by
a debt counsellor to terminate or withdraw debt review is beyond the statutory powers of a
debt counsellor as espoused in the Act, therefore the conduct is prohibited.
Following an intensive review process of this judgment and its impact by the Credit Industry
Forum(CIF), the NCR is pleased to announce that the paper developed by the CIF has been
signed off and is issued as guidelines to be applied by all industry participants effective immediately.
These guidelines replace the use of Form 17.4.
Please take note that amendments to the Act, its regulations or case law supersede provisions made
in these guidelines and will when necessary be amended.

COMPLIANCE

Credit Providers, Credit Bureaus and Debt Counsellors are requested to comply by consistently
applying these guidelines. Non-compliance with these guidelines should be reported to the NCR.

GUIDELINES
1. WHEN CAN A CONSUMER EXIT DEBT REVIEW PROCESS?
• Section 71(2)(b)(i) of the Act initially made provision for consumers to only exit debt review
through issuance of a clearance certificate after they have paid all their re-arranged debts
in full. The effect of this provision is that in instances where a home loan formed part of the
debt review application, consumers have to remain under debt review for the duration of the
home loan term even after settling re-arranged short term debts. This provision will however
change upon proclamation of the National Credit Amendment Act (NCAA) under section 71(1)
as follows:

(1) A Consumer whose debts have been re-arranged in terms of Part D of this Chapter must be issued with a Clearance Certificate by a Debt Counsellor within seven days after the Consumer has –
(a) Satisfied all the obligations under every credit agreement that was subject to that debt
re-arrangement order or agreement in accordance with that order or arrangement; or
(b) Demonstrated:
(i) financial ability to satisfy the future obligations in terms of the re-arrangement order or
agreement under-
(aa) a mortgage agreement which secures a credit agreement for the purchase or improvement of
immovable property; or
(bb) any long term agreement as may be prescribed;
(ii) that there are no arrears on the re-arrangement contemplated in subparagraph (i);
and
(iii) that all obligations under every credit agreement included in the re-arrangement order or
agreement other than those contemplated in subparagraph (i), have been settled in full.

2. CAN A DEBT COUNSELLOR TERMINATE OR WITHDRAW THE DEBT REVIEW PROCESS?
• NO. A debt counsellor does not have statutory powers to terminate or withdraw the debt review
process. This means that a debt counsellor can no longer issue Form 17.4 and update DHS with
status G (Voluntary withdrawal by consumer) or H (Withdrawal by a debt counsellor). There is
however varied ways in which a consumer can be withdrawn from debt review which will be
set out below.

3. CAN A CONSUMER WITHDRAW FROM DEBT REVIEW PROCESS ONCE A DEBT REVIEW
COURT ORDER HAS BEEN OBTAINED?
• Once a debt review court order has been obtained a consumer cannot terminate or withdraw
the debt review process, they can however approach the court to rescind the order or apply for
an order which declares that the consumer is no longer over-indebted.
• Upon receipt of the order, a debt counsellor will notify the credit providers of the withdrawal by
means of Form 17.W and update DHS with status G.

4. CAN A CONSUMER WITHDRAW OR TERMINATE DEBT REVIEW PROCESS PRIOR TO
OBTAINING DEBT REVIEW COURT ORDER?
• Consumers can only withdraw or terminate the debt review process prior to declaration of overindebtedness as per section 86(7) of the Act and issuance of Form 17.2 subject to payment of
debt counselling fees as per NCR Debt Counselling Fee Guidelines.
• If a determination is made and no court order is in place, the consumer will remain under debt
review.
• A debt counsellor will notify the credit providers of the withdrawal by means of Form 17.W and
update DHS with status G.

5. CAN A DEBT COUNSELLOR SUSPEND HIS/HER SERVICE FROM A CONSUMER UNDER
DEBT REVIEW PROCESS?
5.1 Where section 86(7) determination is made and the consumer is not co-operating
• Where a consumer is not co-operating with the debt counsellor (e.g. not providing relevant
information or proof, non payment of debt counselling fees, etc) and a determination in terms
of section 86(7) of the Act is made, a debt counsellor can suspend provision of his/her service
to the consumer.
• Prior to suspension of the service, a debt counsellor will notify the consumer of the intended
suspension of service, the consequences and allow the consumer 10 business days to remedy
the situation.
• Debt counsellor to remain the debt counsellor on record for the consumer.
The following information should be included in the notice of intended suspension to the
consumer:
i. Notice of pending service suspension and the reasons thereof;
ii. Consequences of non co-operation(e.g. risk of termination by credit providers, inability to
apply for further credit , consumer is still under debt review, no withdrawal request to be
processed, etc) ;
iii. Option to remedy the situation within 10 working days;
iv. If no response is received and the situation has not changed, consumers and credit
providers should be notified of the suspension of service by means of Form 17.W.
5.2 Where a consumer has elected to make direct payments to credit providers
• In terms of the NCAA, a consumer has a right to make direct payments to credit providers and
not make use of the services of a Payment Distribution Agent (PDA).
• Election by consumers to make direct payments to credit providers cannot be construed as non
co-operation and should not be used as a reason for suspension of debt counselling services.
The following information relating to election to make direct payments should be included in
the Form 16 signed by the consumer when they apply for debt review:
i. Consumer remains responsible to make all payments as re-arranged, in full and on time.
ii. Proof of payments must be sent to the debt counsellor on a monthly basis for record
keeping and to enable provision of after care service as a consumer cannot be under debt
review without a debt counsellor.
Guidelines for the Withdrawal from Debt Review
iii. Consequences of making short or late payments(e.g. risk of termination by credit providers)
iv. Debt counselling fees are payable to a debt counsellor for services rendered and this
includes payment of aftercare fees.
v. For a debt counsellor to issue a clearance certificate, all after care fees must be up to date.
Where the debt counsellor has suspended provision of service, a consumer must provide
proof of settlement letters from credit providers for a debt counsellor to issue a clearance
certificate.

6. CAN A CONSUMER BE TRANSFERRED TO ANOTHER DEBT COUNSELLOR?
• A consumer under debt review may be transferred to another debt counsellor subject to
payment of all debt counselling fees where it has been established that the previous debt
counsellor followed the correct process.
• Form 17.7 should be used to facilitate this process.
CONCLUSION
All debt counsellors are requested to disclose this information upfront and in writing to consumers
to ensure that they are fully aware of the implications of being under debt review.

If you are unsure about whether you can cancel your Debt Review, you may call one of our attorneys for who will be able to assist you .

A “cooling off” period gives a Purchaser the right to unilaterally cancel a sale agreement.

This stems from Section 29A of the Alienation of Land Act 68 of 1981, as well as the Consumer Protection Act 68 of 2008. Under the Alienation of Land Act, the purchase price dictates whether the period applies, and under the Consumer Protection Act, any direct marketing dictates whether the period applies.

The cooling off period under the Alienation of Land Act, currently applies to properties which are sold for a value of R250 000-00 or less.

This cooling off period was legislated in order to protect Purchasers who require statutory protection. This protection only applies to residential property sales where the purchase price is R250 000-00 or less, and the purchaser is a natural person.

Commercial, industrial and agricultural properties are excluded from the application of the cooling off period. In addition, a company, close corporation and a trust is excluded from the protection afforded by the cooling off period. These categories relate to persons who can reasonably be expected to understand the nature of the transaction and if not, to obtain legal advice before entering into the transaction.

A further exclusion applies when the same Purchaser and the same Seller enter into a new sale agreement, in respect of the same land and on the same terms as previously contracted into between the parties. Therefore any Purchaser who signs a sale agreement for a piece of land, is protected by the cooling off period once only, and will not be afforded the benefit the second time around. In practice this would apply to all sales, where the cooling off was applied and the sale cancelled, or when a sale falls for any reason, and the Purchaser enters into a new sale agreement for the same property on the same terms.

Lesser known exclusions apply as well. If a Purchaser reserves the right to nominate or appoint another person to take over his/her responsibilities and rights under a contract, then no cooling off period will apply. The cooling off period will further not apply in the event that an option was exercised, which option was open for exercise for a period of at least 5 days.

Under the Alienation of Land Act, a Purchaser may not waiver or relinquish the right afforded by the cooling off period, and any deposits or fees paid must be refunded within 10 days of termination of the contract. No damages are payable, and all penalties and fees are void from operation regardless of agreements to the contrary.

The cooling off period, if relied upon requires that the Purchaser give written notice to the Seller or his/her agent within 5 days of entering into the agreement. The days are calculated by excluding the day the contract was entered into, as well as excluding weekends and public holidays. Important note must be made to “offers to purchase” which do not constitute a binding sale agreement until accepted by the Seller. In all cases of offers to purchase, the 5 day period runs after the contract becomes valid and binding i.e. date of signature by the Seller.

In the event of a Purchaser entering into a further sale agreement or signs an offer for another property, the first offer or sale agreement will be automatically revoked and cancelled. Written notice must be given to the Seller of the first agreement in such an event. Failure to do so is an offence under S29A, and may result upon conviction to a fine or to imprisonment or to both a fine and imprisonment. The notice need not be delivered if the purchaser intends to purchase both properties.

A further cooling off period applies under the Consumer Protection Act, and it is important to note that this cooling off applies only when a transaction is the result of direct marketing. Marketing directly by person to person, by mail, email or sms will result in the cooling off period being applied. Under these circumstances the purchaser may rescind/ cancel the agreement within 5 days after the agreement was concluded, regardless of the purchase price.

The time periods involved in any property transfer is of utmost importance and interest to all parties concerned. Interest payments, rates, levies, municipal accounts and maintenance costs continue to be incurred until those obligations are transferred to a new owner.

It’s a question that is posed by every client, and the answer is dependent on a number of factors.

To understand how long any transfer should take, one has to firstly look at the type of transaction that is being dealt with and secondly, the number of parties to the transaction. We break up transactions into 4 categories:

1. Cash sale of a freehold property
2. Sale of a freehold property using bank finance
3. Cash sale of a property which is encumbered by a mortgage bond
4. Sale of a property which is encumbered by a mortgage bond using bank finance

The cash sale of a freehold property:

This transfer requires no other attorney firm to be involved in the transaction, with the transferring attorney solely attending to the transfer, from beginning to end. Rates clearances figures are obtained on average within 5 to 10 working days, and once paid, a further 5 days to issue a rates clearance certificate. These time periods fluctuate depending on the workload of the municipality, the speed of the handler who is attending to the matter on behalf of the municipality, as well as the status of the municipal server.

The cash sale transaction can therefore be lodged upon receipt of the rates clearance certificate, which is between 3 to 4 weeks of receiving the instruction. All other aspects of the transfer can be completed within this time period.

Sale of a freehold property using bank finance:

When a home loan is used to finance the purchase price or balance of the purchase price, a further attorney is involved in the transaction, who will attend to the registration of a first mortgage bond over the property. The transfer speed in this case is dependent on when the bond registration attorney delivers the required guarantees to the transferring attorney. Only once guarantees are received can the purchase price be deemed to be secured.

When a bond is to be registered, the non-payment of the bond registration attorney’s fee could see delays in the delivery of the guarantee. It is thus very important to ensure that Purchasers are aware of their fee obligation, as well as attendance to signature of their documents.

Cash sale of a property which is encumbered by a mortgage bond

When a bond exists on the property that is being transferred, a further attorney is involved in the process, who will attend to the cancellation of the bond. Normally this will not affect transfer speeds, unless there is a delay in obtaining the original Title Deed.

It is important to note that only once the client complies with FICA, signs their refund form, and attends to the payment of the bond cancellation attorneys fee, will a “proceed” be obtained from the bank. The “proceed” is an instruction from the bank to literally proceed with the lodgement and cancellation of the existing bond.

A further important aspect is that the purchase price must be paid in full to enable the registration attorney to issue a “guarantee” to the cancellation attorney.

Sale of a property which is encumbered by a mortgage bond using bank finance

This type of transfer requires 3 attorneys to simultaneously deal with the transfer, namely a transferring attorney, a bond registration attorney, and a bond cancellation attorney.

Transfer speeds are entirely dependent on all parties ensuring that their files are ready for lodgement, and the aspects covered above relate.

For every new party involved in the transaction, the time period to get to lodgement is increased. These parties need to get their files in order and various original documents need to be exchanged. Failures by any party to attend to their responsibilities do hamper transfer speed, purely because each additional party to the transaction needs to deliver certain documents and attend to the lodgement of their documents. Only once all parties are ready, can the transfer be lodged.

Once lodged, the deeds office may take 5 to 7 working days to inspect the transfer documents, and a further 2 days to register the transfer.

Other factors that delay transfers:

Outstanding fees

The most common reason for delays is the failure of Purchasers to pay their required transfer fees and bond registration fees, as well as Sellers failing to pay their bond cancellation fee on time. Only when fees are paid in full or arrangements made for payment thereof, can the transfer be lodged.

Rates payments

A rates clearance certificate is mandatory. This certificate may only be issued upon receipt of the municipality of full payment of its clearance figures. Any delay by the Seller to make payment of these amounts, have a resultant effect of delaying the acquisition of the rates clearance certificate which results in a delay of transfer.

Transfer duty

Should any party to the transaction fail to furnish their tax numbers, or any other required information, then a transfer duty receipt cannot be obtained. This is amplified when the parties have not met their tax obligations. SARS has strict requirements that need to be followed. In addition to the above, failure of the Purchaser to make payment of transfer duty (in property transfers over R750 000-00) will cause delays.

Electrical compliance and entomology reports

These are basic reports that need to be in place for any transfer. Failures to attend to these reports timeously affects transfer times. It must be noted that these are legal requirements, as well as requirements of the financial institutions. Once obtained a certified copy of the reports needs to be delivered to the bond registration attorney. Delivery depends on the province in which the attorney is based, with a minimum 2 day delivery time period for local deliveries, and a 5 day delivery time period inter-province.

Signature of documents

Another factor which may cause delays is the failure of the Purchaser and Seller to attend to the signature of their transfer documents.

This also applies to the signature of bond registration documents and refund forms for bond cancellation.

Delivery of guarantees

Guarantees secure the purchase price and/or cancellation figures in situations where bonds are being registered or cancelled. Any delay in the delivery of these guarantees severely impact the transfer time. It is important to note that most bond registration attorneys will not deliver any guarantees until such time as their fee is settled in full by the Purchaser.

Title conditions

Title conditions are also a factor to be considered. Whenever a restriction is contained in the Title Deed, this restriction has to be dealt with. In most cases a consent to the transfer is required by the party in whose favour the restriction is registered in favour of. Examples of these are consents by the local municipality, especially for low cost developments or pre-emptive rights contained in the conditions of title. Transfer speeds are in these matters dependent on the time it takes the holder thereof to furnish the consent.

These factors are some of the issues experienced with transfers, and transfer speeds are dependent on these individual matters being attended to timeously. Each individual factor serves an important part of the registration of the transfer.

To ensure that the transfer times are reduced, it is important to ensure that you attend to your your financial and legal obligations.

At Sibran & Sibran, we provide constant updates and feedback, allowing all parties to track and follow the status of the transfer, and each party is made aware of any delays, and who is responsible for that delay.

The signing of an offer to purchase is usually the end of the estate agent’s responsibilities, and the beginning of the conveyancer’s responsibility.

There are however a few aspects that estate agents should cover, which will dramatically increase transfer times, which not only benefits clients, but also benefits the agency.

Being a part of your FICA compliance, copies of the identity documents, proof of residence, the latest municipal bill for the property, the tax numbers of the parties (or annual income if not tax registered), the marital status of the parties, and the contact details for each party are documents which can be acquired upon signature of the sale agreement.

The collection of these documents will ensure that preliminary drafting can begin immediately, and transfer speeds are increased. The resultant effect is that the rates clearance applications and transfer duty applications can be completed in advance.

With the current municipal delays, it is imperative that pro-active steps be taken when dealing with transfers. Cash flows of estate agencies, interest payments, client service and reputation all rely on the speed that the transfer is done.

A further aspect that must be dealt with is informing buyers and sellers of the costs involved in the property transaction, and saving for these costs. This would go beyond the conveyancing fees for transfers and bond registration. The aspects that should be covered are the rates clearance amounts, levy clearance amounts, budgeting for electrical compliance and entomology reports, notary fees for exclusive use areas, transfer duty, and service initiation fees for bonds.

Adding more information to your services will adequately prepare clients for their future obligations, and will ensure that the magic time period of transfers being registered within 2 months becomes a norm.

With sectional title developments being the future of residential living, it has become very important to familiarize oneself with the Developers Real Right of Extension in terms of Section 25 of the Sectional Titles Act 95 of 1986.

The real right of extension gives the developer a right to extend the scheme by adding further buildings and conferring exclusive use rights to prospective buyers. The right has to be registered and is operational for a specified period of time.

This has a direct impact on current or future owners, an example being that a unit with an un-obscured view may find its view blocked due to a new phase being built directly in front of it, thereby diminishing the property value by terminating the view. Apart from values of the property being affected, living conditions may be affected as well.

Further impacts are the potential to increase the number of residents in the development, the reduction of common property and the increase in traffic in or around the development.

In terms of Section 25(14) of Sectional Titles Act, one must ensure that if a real right of extension exists it must be declared in the sale agreement.

Should the right exist, but not be disclosed in the sale agreement, the agreement can be declared voidable at the option of the purchaser by simply delivering notice to the seller. The Section 15B (3)(a) conveyancers certificate also covers this right, and should the right exist but not be disclosed, then the purchaser has to give written notice in terms of Section 25(15) that he/she does not intend to annul the agreement because of the defect.

The Rental Housing Act 50 of 1999 has been around for a while and governs landlord and tenant transactions. It places duties on the parties to a lease agreement, and penalties for breach. The Rental Housing Tribunal is recognised in law and any ruling by the Tribunal is deemed to be an order of the Magistrate’s Court in terms of the Magistrate’s Court Act 32 of 1944. The tribunal can award fines and/or imprisonment up to 2(two) years for violations.

The frequently encountered requirement is Section 5(3) (e). This section deals with defects. Repairs which need to be done at the expiration of the lease stem from the differences in the condition of the property prior to the tenant taking occupation and the condition of the property at the expiration of the tenacy. The Act permits the landlord to deduct the reasonable costs of repairs from any deposit (or interest accrued), and it is important to look at the initial requirements for the noting of defects.

Attention must be drawn to the wording of the section, and the implementation thereof. The act requires that an inspection be conducted by the landlord and tenant prior to the tenant taking occupation of the premises. Defects or the non-existence of defects must be noted (Section (5)(7)), and this list must be annexed to the lease agreement. The landlord may be represented by his/her duly authorized agent.

Whilst this may seem logical, agents are often guilty of completing the list after occupation, or placing the onus on the tenant to notify them of any defects that exist. This could result in a tenant taking action against the landlord at expiration of the lease when disputes arise. The question that must be asked is not whether defects exist, but whether the inspection was done prior to the tenant taking occupation. If the inspection was not done as required, then this is a contravention of the Act.

A further point of note is Section 5(3) (f), which requires that the outgoing inspection must be conducted within 3 days prior to the expiration of the lease.

To avoid problems, ensure strict compliance. Have the inspections done prior to occupation and make arrangements to have the outgoing inspection done at least 3 days before expiry of the lease.

The Subdivision of Agricultural Land Act 70 of 1970 came into operation on the 2 January 1971, and as the name indicates, it deals with the subdivision of land deemed to be agricultural. The Act has changed how agricultural land is dealt with. A Repeal Act was gazetted in 1998, to repeal the entire Act, but the date for the Repeal Act to come into operation has not been set. Given a period of almost 20 years since the publishing of the Repeal Act in the Government Gazette, it is uncertain whether the Act will ever be repealed.

It is important to note at the outset that although restrictions are in place, one can apply to the office of the Minister of Agriculture for consent in writing in order to proceed against the restrictions. Time frames for obtaining consent vary.

The following restrictions are of importance when dealing with agricultural land:

1. Agricultural land may not be subdivided;

2. Agricultural land may not be sold in undivided shares unless those undivided shares already exist;

3. A portion of an undivided share in agricultural land may not be sold to anyone who does not already own a share in such land;

4. Agricultural land may not be leased for a period over 10 years, or for the natural life of the lessee, or for periods which can be renewed by the lessee which amount to a period of over 10 years;

5. A portion of agricultural land agricultural land cannot be sold or advertised to be sold;

The act stops the practise of dividing agricultural land into smaller units.

To understand how these restrictions apply, we look at the following examples:

A farmer owns a farm (agricultural land) and wishes to sell it. He may sell it to one buyer only. If he sells it to two buyers, then they would have to acquire ownership in undivided shares, which is not allowed. This would also apply to inheritances.

The solution would be to apply for consent to sell the farm in undivided shares, which could take a long period of time, and consent may not be granted. The alternative and faster solution is for the buyers to form a company, and purchase the farm through the company. Because the company acquires the farm in its entirety, there will be no contravention of the restrictions. The buyers will own the farm according to their shares in the company.

For inheritances, the options are the same, or if the beneficiaries do not wish to do so, a redistribution agreement can be entered into, or the asset realized (sold) and the proceeds distributed to the beneficiaries.

If the same farmer, decided to subdivide his land and sell off a portion, he cannot do so, and he further cannot advertise that portion to be sold, without consent first being obtained.

If farmer A and farmer B are the owners of the farm in undivided shares, and wish to sell the farm, they may sell it in undivided shares, because those undivided shares exist. The restrictions apply to the creation of further undivided shares.

If farmer A and farmer B are the owners of the farm in undivided shares, and Farmer A wishes to sell a portion of his share, he may only sell that portion to farmer B, because farmer B already owns a share in the farm. He may not sell a portion of his share to anyone else unless consent is obtained to do so.

Following the budget speech 2016, transfer duty amendments have come into effect from 1 March 2016 until the next revision. Calculations for properties under R10 000 000-00 stay the same as the previous year’s calculation, but for values that are higher, the calculation will change.

The exemption value of R750 000-00 still applies (zero transfer duty payable), and the noticeable change is in the upper property value segment.

Prior to the effected change in tariff, the scale of duty imposed on property above the value of R2 250 000-00 was fixed at the rate of R85 000-00 plus 11% of the value above R2 250 000-00.

The new change in tariff now sees an imposition of a higher rate of 13% (a 2% increase) for property values over R10 000 000-00, which equates to an increase of R20 000-00 per million.

Practically this would mean that the calculation of duty above
R2 250 000-00 but under R10 000 001-00 will be R85 000-00 plus 11% of the value above R2 250 000-00.

For property values above R10 000 000-00, the calculation will be R937 500-00 plus 13% of the value exceeding R10 000 000-00.

The table below can be used to easily calculate duty payable:

10 000 001 and above                  937 500-00 + 13% of the amount above 10 000 000-00.

The most important aspect in property transactions is the profit margin that exists upon finalization of the transfer. Expecting market related sales prices for your property without due diligence and upkeep will render your profit margin slim and may render your property on the market for prolonged periods of time.

With today’s economy and the exchange rate increasing prices and services, the intelligent Seller has to look at upkeep of his/her property which is cost effective and adds value. What must be borne in mind is that a Purchaser will constantly look at what needs to be done and thereafter decide whether or not to purchase.

With the Purchaser in mind, the following will not only add value to your property, but also add value for the purchaser as well as the bank’s valuator.

1. Paint

The most important factor in any property is paint. It’s not rocket science and is a cost effective DIY solution. Dull, faded, cracking or bright colours will decrease your property value. Ensure that your property is painted in a neutral colour that will give the Purchaser a platform to work from. Ensure that all walls and ceilings and skirtings are painted. When in doubt, use a white paint. This will radiate light and act as base coat for any other colour which the future owner may want.

2. Curtains and blinds

Ensure that all curtains are washed and ironed, and that all blinds are dusted and cleaned.

3. Garden and driveway

Ensure that your garden and driveway are neat. Trim and cut all bushes, hedges, and grass. Clean your driveway and ensure that oil spills or stains are removed.

4. Electricals

Ensure that all electrical fixtures are in order. Clean light switches and plugs which become dirty over time due to constant usage. Replace broken or damaged fixtures and ensure that all light holders have light bulbs.

5. Photos and picture frames

Remove all photos and pictures frames if possible. You want the prospective buyer to envision himself/herself living in your home.

6. Doors

Ensure that all doors are in good condition. Ensure that wooden doors are varnished and painted doors are clean.

7. Smell

Ensure that no food is cooked before or during viewing times. Buy a neutral air freshener and spray it conservatively around your home. If you have pets, ensure that they are clean and any messes are cleaned up.

8. Tidiness

Ensure that your home is neat. The kitchen, lounge, toilets and bedrooms should be spotless.

9. Broken windows and kitchen cupboards

Replace all broken windows, and replace damaged kitchen cupboard doors. The kitchen is the highlight of any home and should be perfect. Replacing doors or surfaces are relatively cheap and can be done by you. All building suppliers will be able to match your doors and surfaces, and all you have to do is attach them.

10. Water damage or leaks

Ensure that all water damage or water leaks are repaired before any viewings.

Remember to keep the prospective buyer in mind at all times. These simple tips will not only increase your property value, but will also ensure a quick sale. Remember that property sales are a competition between every home on the market and the best value for money wins everytime.

All property come with associated costs. This is the natural outcome of ownership or sale. In this article we will explore the costs associated to all parties.

We will start with the Sellers costs. All sellers will incur costs in the sale of their property. A seller will see himself or herself face the following:
-Bond cancellation fees (if applicable):
This is a fee payable to your banks attorney for cancelling an existing bond on your property.

-Compliance reports:
This is mandatory and will include electrical compliance, entomology, and gas. There is a legal debate surrounding the issue of electrical fencing but that will be covered in a separate article.

-Rates clearance figures:
This is the amount that the municipality requires in order to render the property cleared of rates, electricity and water. Amounts are paid in advance and all amounts from date of transfer will fall to the purchaser who will refund the seller his pro-rata portion.

-Levy clearance figures (if sectional title):
As with rates clearances, the same principles apply to all sectional title properties. The managing agent or body corporate will provide us with amounts that the seller has to pay in order to render the levies cleared. This is mandatory. Amounts are paid in advance and all amounts from date of transfer will fall to the purchaser who will refund the seller his pro-rata portion.

These liability amounts can be changed by agreement, but remember that transfer duty will be calculated differently if the purchaser pays any amounts over and above the sale price. Transfer duty is paid on the total value of the consideration paid in acquiring the property but excludes the legal fees paid.

The Purchasers liability will include the following:
– Transfer Duty (payable to SARS):
All transactions attract transfer duty besides a few exceptions. Application must be made for a transfer duty receipt (above R750 000) or exemption (if below R750 000), regardless of whether transfer duty is payable or not.

– Transfer fee:
This is the tariffed conveyancing fee. This is the fee payable for the registration of the transfer.

– Lodging agent’s fee/vat/postages and petties:
The lodging agents are our correspondent attorneys based at different deeds registries. Their fee is for attendance to the registration at the deeds office and returning of the original title deed to us, and is paid to them.

– Deeds office fee:
The Deeds office is regulated and all conventional and sectional title lodgements attract a prescribed tariffed fee for registration of the transfer.

– Deeds office search:
This fee is the fee that our service providers charge us for a compulsory deeds office search. This is inclusive of obtaining a copy of the deed in order to begin immediate drafting. The search enables conveyancers to note caveats, endorsements, restrictions, servitudes, bonds etc. registered against the property.

-Postages and petties:
This is our fee inclusive of all costs incurred in travelling, telephone calls, postages, bank charges etc. in handling the matter.

– Electronic document generation fee:
This is charged by our service provider for the transfer and use of the system.

– Rates clearance application / certificate:
This is paid over to our electronic service providers for use of the electronic rates service. All municipalities are moving towards electronic requests for rates. This not only speeds up the process but alleviates municipalities handling and misplacing physical documents. Preference is given to all electronic requests.

– Transfer duty application:
This is paid over to our electronic service providers. The application entails all the details of the transaction in order for SARS to verify the transaction and establish the amount of duty payable. Once paid, a transfer duty receipt or exception certificate is issued which must accompany the registration as proof of fulfilment of obligations in terms of tax.

– FICA:
This is a fee for compliance with the financial intelligence centre regarding all property transactions.

– Levy clearance certificates:
For all sectional title transfers, a levy clearance certificate must be issued by the managing agent or body corporate reflecting that the levies due have been paid in full. The fee for the certificate is payable directly to the managing agents and varies. This cost will be added onto the bill once we are notified of the fee. This is paid over to the agency concerned.

-Bond registration fee:
If the purchaser is being financed by a bank then a bond will be registered over the property in favour of the bank. The bank will appoint a conveyancer to register the bond and the purchaser will be liable for the bond registration fee, and in certain circumstances, an initiation fee.

For expert advice drop us an email and one of our staff members will get back to you. Understanding the financial side of property will enable you to better prepare yourself and ensure that the purchase or sale of your property goes smoothly.