{"id":939,"date":"2021-03-03T09:21:48","date_gmt":"2021-03-03T07:21:48","guid":{"rendered":"https:\/\/www.matthewsenslin.com\/?p=939"},"modified":"2021-07-28T13:15:32","modified_gmt":"2021-07-28T11:15:32","slug":"buying-and-selling-property-nine-important-questions","status":"publish","type":"post","link":"https:\/\/www.matthewsenslin.com\/buying-and-selling-property-nine-important-questions\/","title":{"rendered":"Buying and Selling Property: Nine Important Questions"},"content":{"rendered":"

“Owning a home is a keystone of wealth\u2026 both financial affluence and emotional security\u201d (Personal Finance Expert Suze Orman)<\/em><\/p><\/blockquote>\n

When you buy or sell your \u201cHome Sweet Home\u201d, particularly for the first time, the process can seem complicated, the terminology confusing, and the risks of making a costly mistake intimidating. You are after all dealing with quite possibly your most important asset!<\/p>\n

To help you navigate the process, as either seller or buyer, here are some common questions, with answers.<\/p>\n

1. Where can I get a simple guide to the process?<\/h2>\n

When you come down to the details it certainly is important to get everything right, but a simple, broad overview to start with will go a long way to de-mystifying the process and to setting you safely onto the right path.<\/p>\n

Have a look at the Law Society of South Africa\u2019s \u201cBuying or Selling a House: What You Need to Know\u201d. Download it in any of four languages here<\/a>.<\/p>\n

Simply and clearly written, the guide is full of really important information and advice, both practical and legal \u2013 take the time to read it in depth!<\/p>\n

Turning now to a few of the other more common questions you will no doubt have\u2026<\/p>\n

2. Do I really need legal advice?<\/h2>\n

Our law reports are full of court disputes that could have been avoided with a simple upfront request for legal advice. The danger of not doing so is that many pitfalls await the unwary and you will be held to anything you agree to. Its only sensible therefore to take advice early \u2013 well before you appoint an agent, start looking for a house, or get involved in submitting offers and negotiating sale agreements.<\/p>\n

Not having your \u201coffer to purchase\u201d or \u201cagreement of sale\u201d legally checked is a recipe for disaster. Once you sign on the dotted line you are on the hook for everything in the document. With very limited exceptions our law holds you to your signature and it is no good saying later \u201cBut I didn\u2019t read the document, it all looked the normal standard stuff\u201d or \u201c I had no idea I was agreeing to term x or condition y\u201d \u2013 tough, you are bound.<\/p>\n

Bottom line \u2013 chat to your attorney before you do anything else!<\/p>\n

3. Whose name\/s should I put the property in?<\/h2>\n

Should you buy the house in your name or in your spouse\u2019s name? Should you buy jointly? Does it matter what marital regime applies to your marriage? What if you are in a permanent cohabitation arrangement rather than a formal marriage? Or perhaps you are wondering whether you should put the house into the name of a company of family trust.<\/p>\n

Your choice now will have far-reaching legal, tax and practical consequences; and with some complex areas of law involved, specialist upfront advice is a no-brainer.<\/p>\n

4. What else should I ask my attorney?<\/h2>\n

Common areas of dispute and litigation include \u201cbond clauses\u201d and \u201c72-hour clauses\u201d in sale agreements, confusion over the need to identify or disclose both visible and invisible defects, disagreements over what is a \u201cfixture\u201d that comes with the house and what isn\u2019t, misunderstandings over neighbours\u2019 rights to build and encroach on views and the like, not checking for building plans and municipal Certificates of Occupancy (you will have a problem if a previous owner built or extended without proper plans), not checking the zoning and title deed restrictions (which could put a damper on any plans you have to extend, go up a storey, build a home office, or the like), servitudes or other rights of use over the property, limited \u201chome business\u201d options and so on.<\/p>\n

(Tip: Take lots of \u201cbefore and after\u201d photos of the house and property on your cell phone \u2013 a dated picture is hard to argue with!)<\/p>\n

Other \u201chomework\u201d items to ask about \u2013 what paperwork you will need (do you know where you title deed is?), how long your particular transfer is likely to take (and a linked question \u201cwhat date of occupation should we agree on?\u201d), to whom deposits and any occupational rental must be paid (and who gets paid the interest earned on monies held in trust), what compliance certificates you need, how to find the best bond rates, whether you qualify for a FLISP (Finance Linked Individual Subsidy Program) subsidy, how to cancel and open municipal service accounts, the rights of any occupiers (not just tenants, also \u201cunlawful occupiers\u201d), and so on \u2013 you will have your own list.<\/p>\n

5. What about planning my finances?<\/h2>\n

Ask your lawyer for a breakdown of who will pay what and when. Think deposits, bond and transfer costs, transfer duty, agent\u2019s commission, bond settlement and balances and so on. Cash flow forecasting, and a clear understanding of the timelines involved, are critical here to avoid unpleasant surprises down the line.
\nAs a buyer, factor into your \u201caffordability budget\u201d not only bond repayments and your projected regular monthly costs (rates services, insurance premiums, security costs etc.) but also an emergency fund to cover any unexpected costs that may crop up.<\/p>\n

On the subject of finances, cyber-fraud is a growing issue when it comes to electronic communications and payments so agree with your lawyer on measures to ensure that neither of you falls victim. Fraudulent \u201chere are my new bank account details\u201d emails are flavour of the month, but the scams are constantly evolving.<\/p>\n

6. Should I buy-to-let in the current market?<\/h2>\n

Buying-to-let can be an excellent investment channel, and for a whole host of reasons this time of pandemic and disruption has opened up and abundance of opportunities to prospective landlords. Just don\u2019t rush in blind \u2013 choose the right property in the right area, go into the process with your eyes fully open, and in particular beware the commo pitfall of failing to minimize your risk of having to fight a difficult, destructive, or non-paying tenant. Residential property occupiers enjoy strong protections against eviction even in normal times, and these protections are even stronger for the duration of the National State of Disaster.<\/p>\n

It is essential also to understand the impact of the Rental Housing Act on the landlord\/tenant relationship \u2013 do you know for example the specific requirements around rental deposits and joint property inspections? \u201cIgnorance of the law\u201d is no excuse, and non-compliance could cost you dearly.<\/p>\n

7. Who appoints the conveyance and why do I need one?<\/h2>\n

In a nutshell, you need to appoint a specialist lawyer (a \u201cconveyancer\u201d) to pass transfer of ownership from the seller to the buyer in the Deeds Office. That\u2019s because only on registration of the transfer does the buyer become the legal owner of the property.<\/p>\n

As a seller, insist on choosing the conveyancer \u2013 pick a firm you can trust to act with professionalism, integrity, and speed.<\/p>\n

8. What about buying into a complex?<\/h2>\n

Owning a house and living in a community scheme come with substantial benefits, just understand exactly what you are letting yourself in for both on a practical level and in regard to the various rules and regulations you will be agreeing to.<\/p>\n

Our courts regularly have to sort out bitter (and unnecessary) disputes around owners desperately \u2013 and almost always unsuccessfully \u2013 trying to get out of complying with body corporate and Home Owners Association rules. Common areas of complaint are home businesses, pet ownership and control, vehicle parking, noise, nuisance objections and the like.<\/p>\n

9. What records and paperwork should I keep?<\/h2>\n

One thing is certain \u2013 the document you don\u2019t keep on file is the one you will be desperately searching for in 10 or 20 years\u2019 time! So when in doubt about a particular item keep it, but at the very least have a file (backed up electronically) with \u2013<\/p>\n