Welcome to Miltons Matsemela - The Conveyancers
21 May 2020

YET ANOTHER DROP IN INTEREST RATES!

The repo rate (rate at which the Reserve bank lends money to the retail banks) has been reduced by yet a further 0.5%! As such the repo rate will now be 3.75% (down from 4.25%) and the prime lending rate, will be 7.25% (down from 7.75%)

How will this affect your pocket? On a home loan of R2 000 000, repayable at a prime interest rate of 7.25% over 20 years, your payment will now be R15 807.52, whilst at 7.75% it would have been R16 418.97. This signifies a reduction of R611,45pm.

Stay safe and hope to see you all soon again!

20 May 2020
19 May 2020

Deeds Office Update – Lodgements suspended until further notice

We have just learnt from Cape Town Attorneys’ Association, that ALL FURTHER LODGEMENTS of deeds are to be suspended as from 20 May 2020 (tomorrow) until further notice due to issues with the Unions. Registrations etc can still take place but we cannot lodge.

We will keep you updated.

14 May 2020

MY BOND HAS BEEN WITHDRAWN BY THE BANK! IS THE DEED OF SALE STILL BINDING?

We have now had a few transfers where the banks have withdrawn bonds that were approved prior to lockdown because of a change in the buyer’s financial position. Flowing from this, the questions on everyone’s lips are:

  1. If the deed of sale was conditional on a bond being granted, is the sale still binding after the bond has been withdrawn; and, if so,
  2. If the purchaser cannot then pay the purchase price, and the contract is cancelled as a result of this, will the purchaser be liable to pay damages, for example, the agent’s commission?

The short and sad answer to both of these questions is yes.

A large percentage of deeds of sale are subject to the grant of bonds and these bonds must usually be granted on the bank’s standard terms and conditions. In their standard T’s & C’s, all the banks we deal with reserve the right to withdraw the bond, right up to the date of registration.

A bond that is granted which includes this right of withdrawal is therefore granted on standard T’s & C’s and will be sufficient to meet the requirements of the bond clause in the deed of sale. Furthermore, once the bond has been granted and the condition in the deed of sale has been met, the later withdrawal of the bond will not turn back the clock. The sale will remain binding and it is the purchaser who bears the risk of the consequences of such a withdrawal.

After a purchaser has accepted a bond on these terms, the position is even clearer, as the purchaser has then accepted the bond on the T’s & C’s set out in the letter of grant. The purchaser has therefore given up the right to allege that the bond was not approved on standard T’s & C’s, and the purchaser again bears the risk that the bond might be withdrawn.

In closing then, it is our view that if a purchaser cannot afford to go ahead with the sale as a result of the withdrawal of a bond that was properly granted, the seller can use this default to cancel the agreement, and the purchaser will be liable for damages. These damages might include the estate agents commission, wasted attorney’s costs and the difference in the purchase price if the property is then sold for a lower purchase price. If there is a deposit, this will be used towards covering these losses.

The bottom line is that this is a risk every buyer must assume if he wants to buy property and finance it with a bond.

Miltons Matsemela Inc
Deon Welz & Robert Krautkramer
May 2020

12 May 2020

DEEDS OFFICE OPERATIONS – UPDATE

Good News from the Deeds Office!

We have just received correspondence from the Deputy Register of Deeds confirming that the Deeds Office will be open to Conveyancers from tomorrow, Wednesday 13 May. A copy of the letter can be read here.

This is certainly good news and we will be there tomorrow to do as much as we can.

We will keep you posted on developments

Warmest regards
Miltons Matsemela

11 May 2020

DEEDS OFFICE OPERATIONS

The Deeds Offices around the country should start work again on Wednesday, 13 May 2020.

In their circular sent out late on Friday, 8 May, the Acting Director-General sets out the steps that have been taken to implement a gradual return to work. Unfortunately however, only one third of employees will be returning to the office and, as for the deeds office in Cape Town, the picture looks worse. If we are interpreting the circular correctly, only 18 staff members will be in the Deeds Office, with one staff member working remotely and 166 on standby. This is in stark contrast to the Deeds Office in Pretoria, where 90 staff members will return to the office with 126 on standby.

The circular can be viewed here.

We will continue to monitor the situation and keep you updated.

Warm regards
Miltons Matsemela Inc

05 May 2020

POSITIVE NEWS REGARDING BOND APPROVALS DURING LOCKDOWN

Since we posted our Newsflash recently, introducing the “Photo Sale Agreement” method, we had a number of estate agents enquiring whether the Banks will accept sale agreements in this manner. Having made enquiries, we were alerted to the fact that the Banks are now all (since last week Thursday) willing to accept UNSIGNED offers to purchase! It also appears that some banks have in the past insisted on witness signatures on all OTPs (regardless of whether sellers were married in COP or not). This is also being relaxed during lockdown.

Although this is certainly positive news to enable loan approvals, we wish to urge agents to still use our Photo Sale Agreement method, (when all else fails), and, where sellers are married in COP, to try and get witnesses to also sign, to ensure that you all have valid and binding sale agreements. No point in getting a bond if the formalities of the sale were not met because in reality, you still have a VOID sale agreement! Where the sellers are married in COP, the one would be for such sellers to do a Zoom or Whatsapp video call to the agent, sign the OTP on video so that the agent can see it is them signing, and then the agent can simply witness the signatures. Although two witnesses should sign for each signatory, if only one (or none) is available, so be it. When the sellers eventually appear in front of a conveyancer, they have to sign a Power of Attorney to authorise the transfer and then those signatures will also require two witnesses. When that happens, then the “defect” will be remedied. Until then, one will have to rely on good faith. It is the best one can do! The law was not designed to deal with this situation in mind, so we have to improvise where we can.

Warmest regards
Miltons Matsemela Inc

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