Why you need the services of a Property Law Expert and Conveyancer
Selling or buying property is probably one of the bigger investments if not the biggest investment that a business or individual will make. There is a range of legal matters that arise in property transactions from family law, corporate law, tax law and trust and deceased estate law. You cannot do without the advice of persons with expertise in these areas that would be able to steer you through the intricate process with its many pitfalls.
Conveyancers are specialist attorneys and by law they are the only professionals that may attend to property transactions that must be registered in the deeds office. They are responsible for the correctness of the documents lodged with the deeds office, to ensure that the seller owns the property, that the buyer and seller have the necessary authority to enter into the sale agreement, that the parties are acting within the terms of the deed of sale and that guarantees for the payment of the purchase price is in place. The conveyancer will ensure contractual and financial compliance for which a high level of expertise and responsibility is required. A conveyancer is therefore best placed to steer you through the process. As the seller of property you would want to hand this process to a conveyancer that you can trust and by law you have the right to appoint a conveyancer of your choice. Do not let anyone take away your right to choose your conveyancer!
Some of the pitfalls to consider and to obtain advice on before entering into any property transaction include the implications of the following:
Cost implications of transactions
Purchasers and sellers should acquaint themselves with all the cost implications of a transaction before entering into a binding agreement and preferably obtain quotations of the costs and procure advice where necessary.
Purchasers are, unless otherwise agreed on, liable for the following costs:
- If they are applying for a bond to purchase the property, the costs of the attorneys appointed by the bank to register the bond
- An initiation fee by the bank in respect of the bond
- The transfer costs in respect of the registration of the property in their names
- The transfer duty or VAT on the purchase price
- A pro rata share of the rates, taxes, and service charges that must be paid in advance to the municipality
- A pro rata share of the sectional title and homeowners association levies, if applicable
- The costs of obtaining levy clearance certificates from the sectional title managing agent and homeowners association, if applicable, and the costs of clearance certificates from the municipality
- The occupational rental, if occupation is taken of a property before registration thereof into the new owner’s name
Sellers are liable for the following costs:
- The costs of the attorneys that attend to the cancellation of an existing bond on the property
- The costs associated with obtaining electrical and gas compliance certificates and repair work that is required
- The costs for a borer beetle inspection, certificate and treatment costs, if applicable
- The agent’s commission, if the property was sold through an agent
- The amount that is outstanding on an existing bond
- A pro rata share of the rates, taxes, and service charges that must be paid in advance to the municipality and any arrears in this regard
- A pro rata share of the sectional title and homeowners association levies, if applicable, and any arrears in this regard
Transfer duty or Value Added Tax
The sale of immovable property will either be subject to transfer duty or Value Added Tax (VAT). If the seller is a VAT vendor for the purposes of the transaction, then VAT will be payable on the purchase price. If VAT is not specified in the deed of sale it will be deemed to be included in the price. The Seller is liable to pay VAT of 15% on the purchase price to SARS. It is therefore important to ensure that the deed of sale makes provision for the VAT implications of the transaction. The sale can be a zero-rated VAT transaction if a seller and purchaser are both VAT vendors, the property is sold as a going concern and certain other requirements are met.
If the seller is not a VAT vendor for the purposes of the transfer, then the purchaser will be liable for transfer duty.
Currently the first R 1 100 000.00 of the purchase price is exempt from transfer duty. Transfer duty must be paid to SARS prior to transfer of the property and within six months of the date of the transaction to avoid penalties. Make sure that you understand the VAT or transfer duty implications of your transaction and that the deed of sale addresses all aspects. Clarity is everything!
The above are but a few examples of areas wherein you will require advice. There are many more areas. The Property Law Department of Goldberg & de Villiers is known for consistently offering our corporate and private clients incisive and practical legal expertise. We are proud to have acted for various Financial Institutions, National and Regional Corporate Clients, Property Developers, Parastatals, Provincial Government and Local Authorities, Voluntary and Community Associations and Private Individuals.
Contact Bardine Hall at Goldberg & de Villiers Inc. on 041 501-9800 for your property law, wills and estate administration requirements.