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11 Dec 2020

Before You Buy or Sell Property this Festive Season…

  1. Local, specialised knowledge: Lawyers have their fingers on the pulse of what is happening locally – what is happening in the property market, who is selling and who is buying, and so on. All invaluable information for both sellers and buyers.
  2. Choosing a conveyancer: A seller has the right to choose the conveyancing attorney who will attend to the transfer in the Deeds Office. Pick a lawyer you trust to act quickly and efficiently, protecting your interests at every step.
  3. The Offer to Purchase/Deed of Sale: Both buyer and seller should sign nothing until they fully understand and accept all the terms and conditions in the document. The law will (with very few exceptions) hold you to your agreements – and if you sign in haste you are likely to regret at leisure!
  4. Agent’s commission: Don’t risk any misunderstanding or dispute if you decide to market your property through an agent or agents – in a worst-case scenario when dealing with multiple agents, you could risk double commission. Have your lawyer check the agent’s mandate before you sign it, and as a buyer look for any undertakings you may be giving in the sale agreement regarding commission disputes.
  5. Other costs: Both parties need to fully consider their total costs, and not all of them are immediately apparent. As a seller for example you need to consider things like bond cancellation costs, compliance certificate costs, tax risks (capital gains tax for example) etc. Buyers of course need to plan for transfer duty, transfer costs, bond registration costs, etc. Ask a conveyancer to give you an estimate before you make an offer.
  6. Bond clauses: Our courts are regularly called upon to resolve “bond clause” disputes. A properly worded clause, correctly recording what you have both agreed to, is essential. As a seller ask about the “72-hour clause” concept if you are selling subject to the buyer getting a bond and you think you may get another and better offer in the interim.
  7. Other suspensive and resolutive clauses: A “suspensive” clause is one that says the agreement “hangs in the air” until the happening of something – for example the granting of a bond to the buyer. A “resolutive” clause on the other hand provides that the agreement is binding on signature but falls away on something happening. Both can cause all sorts of confusion and their interpretation is best left to the experts.
  8. Views, alterations, home businesses, title deed restrictions etc: As a buyer, if you have fallen in love with a house because of its spectacular sea views for example, or because it is perfect for adding on that second story or granny flat, or because you plan to move your pandemic-hit business into the garage, have a conveyancer check the title deeds and local town planning regulations for what is allowed and what is not. There is no such thing as a “right to a view”! Many neighbour disputes have their roots in building extensions that block views or exceed local zoning restrictions, or in objections to business activities on residential property. Do your homework and assume nothing!
  9. Investment Properties: Property can be an excellent investment, but good upfront advice is essential, particularly if you plan to undertake any development or alterations. Understand the costs, the tax implications, and the risks of property “flipping” if you plan to resell, or of managing tenants if you plan to be a landlord.
  10. Who will the buyer be? Trusts, joint ownership, life partners and other considerations: Should you buy in your personal name or hold your house in a trust or company? Should you buy jointly with your spouse or life partner? These are critical decisions, involving questions of estate and tax planning, marital regime if married, cohabitation agreements if not married (or even if!), financial status, risk profile in the commercial sense, and a host of other factors. Not getting this 100% right upfront is a recipe for disaster.
  11. Defects and the old “voetstoots” chestnut: Avoid any risk of dispute over defects, be they “patent” (easily identified on inspection) or “latent” (hidden or non-obvious) with a properly structured voetstoets (“as is” or “without any warranty”) clause. Buyers – bear in mind that if you offer to buy a property voetstoots, you assume the risk to conduct a thorough inspection. Take your time. You are not buying a pair of shoes! Sellers – manage your potential liability for undisclosed defects by being honest about hidden defects you know of.
  12. Community Schemes: Buying into a community scheme comes with many advantages – provided that you understand fully what you are letting yourself in for. But it also comes with pitfalls. Living in a community means you must live by their conduct rules. No pets; no parties after certain hours; restrictions on the colour of your outside walls; how many people may live in a certain size flat, and so forth. In a sectional title development understand exactly what you are buying and how the concepts of “exclusive use” and “common property” areas affect you.

Every situation will be different so tell your attorney everything that could possibly be relevant.

This article was published recently by LawDotNews. We credit the original author.

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