I do a fair amount of inspections in sectional title schemes. Often, owners ask me if body corporates will pay for repairs inside their units. Obviously, their concern is about damage caused by external factors such as rainstorms, burst geysers, and so on.
Each case is usually based on its merits. Usually, the body corporate’s trustees use their discretion when deciding to whom they allocate the cost of repairs and replacement. However, there are many grey areas and differences between the owner’s and body corporate’s liability and responsibility.
The Body Corporate’s obligations
Body corporates are responsible for the repairs and maintenance and upkeep of the common properties.
Furthermore, the body corporate maintains all pipes, ducts, wiring, etc., for the common property and services to more than one unit.
Your obligations as an owner of a section
You must maintain and keep your section in a good state. Moreover, you must also keep any part of the common property to which you have the right neat and tidy. These are exclusive use areas such as gardens, patios, balconies, parking areas, garages, etc.
Check that the agents and agencies are registered with the EAAB (Estate Agency Affairs Board).
Agents can assist in realistically pricing the property by providing information based on comparative market analysis.
Agents should also have a support structure, and the means, to market and advertise your property.
Estate agents should be able to offer you professionalism, good timekeeping, be presentable, be prepared and competent.
They should offer you the best service, which entails an accurate property evaluation, marketing plan and excellent communication. Furthermore, they should keep you informed during every step of the process. Also, agents should also be honest with you and give you their professional opinion.
Ask the following questions:
Do you have a marketing plan for my property?
What is the time period that you think you can sell our house in?
Have you sold homes on our street?
What prices did you get for these homes?
Who do you think is going to buy our home?
What is your commission percentage/amount?
How long a mandate do you suggest?
Your buyer receives ownership with the registration of the property into the buyer’s name from the Deeds Registry Office.
Conveyancing is the legal process that takes place when lawful ownership is obtained of immovable property. A new deed of transfer is drawn up and registered each time a property is sold. As a result, this ensures the security and certainty of an owner’s title to the property.
Three attorneys are involved in buying/selling the property:
Conveyancers (Transferring Attorneys)
They transfer the property from you to the buyer.
You appoint them and they represent you.
Registering (or Bond) Attorneys
They register the bond of the property for the bank financing the purchase of the property.
They represent the buyer and the bank granting the buyer’s home loan.
Appointed by the lending bank.
They cancel the seller’s existing home loan on the property.
They represent the bank cancelling the seller’s home loan.
Appointed by the bank cancelling the seller’s bond.
What can you expect from your Conveyancer?
The Conveyancer should:
protect your interest at all times and these interests should outweigh all other considerations;
inform you of the conveyance procedure and keep the seller informed of the progress of the transaction;
advise you on the content of the Offer to Purchase, especially regarding suspensive conditions;
advise you on the cancellation of the bond, any penalties, notice periods and other administrative charges;
obtain your instruction before issuing any guarantees in respect of the transaction;
do everything in his power to register the transaction as close to the date in the offer to purchase;
ensure no delay of the transfer advising you on your obligations in the offer to purchase;
meet with you to explain, as well as sign the necessary documentation in order to conclude the transaction;
take care of the preparation of the deeds for lodgement;
inform you of the transfer on the day of registration;
account to you for finances relating to the transaction within two days after registration.
Your current bond on the property
Many home sellers fail to give the banks the obligatory 90-day notice, resulting in penalties.
The usual penalty charge is 1% of the outstanding amount of the bond, for the full 90 day period.
Giving notice of an intention to sell does not mean the sale has to take place within a specified period.
The bank’s attorneys will freeze your bond account, and all money in it when instructed to cancel the bond. This can become problematic if you need cash, e.g. for the deposit on your next home. Draw sufficient funds prior to your attorney requesting the bond cancellation.
Be aware that your cancelled bond will pay out after, on average, ten weeks.
Pay all rates up to date
In order to obtain a Rates Clearance, you will need to pay all outstanding rates and services. In addition, you will also pay an additional advance (up to four months) on rates and services.
Without a valid rates clearance certificate your property cannot be transferred.
Financials of sectional title property schemes
A copy of the financial statements is required if the property is part of a sectional title complex. Furthermore, ensure that you have a copy of the management and conduct rules of the body corporate.
The buyer’s bank requires these documents before the loan is granted. The buyer may also want these documents before making an offer. There have been cases where sales fell through if the financial statements of the body corporate were not up to date.
Therefore, do your homework before you sell!
Resolve HOA or body corporate property disputes
If your property is a sectional title unit, it is important to sort out any issues with the body corporate, e.g. levies or certain living and design guidelines, before you sign an Offer to Purchase.
The homeowners association (HOA), or body corporate, will provide you with a clearance certificate to transfer the property. In addition, you will have to pay 3 months of levies in advance.
Often a title deed requirement is that such an association must consent to the sale. However, the association may withhold consent if there is a dispute.
Therefore, before you sell, resolve disputes with the association.
FICA requires that the attorney verifies the identity and obtains the requisite documentation in respect of every seller. Furthermore, this is applicable to every purchaser of property on whose behalf funds are invested.
You need to provide the following:
Copies of ID’s
SARS income tax numbers
Proof of residence.
Additional documentation required for transfer
You need to provide the following documents for your property:
Approved building plans that are up to date including all alterations including occupation certificates.
The latest municipal accounts with respect to rates and taxes, electricity, water and other consumption charges.
The latest levy and/or Homeowners Association accounts.
The duration of the registration of the sale depends on the complexity and individual requirements of the sale. However, a rule of thumb is that it will take approximately three months.
Occupation of the property prior to registration
Do not allow a buyer to start renovations or makes changes to the property before the transfer is complete! However, you may give the occupation of a property once all the suspensive conditions have been met.
Where applicable, the Conveyancer may hold the balance between the bond and the purchase price in trust.
You can protect yourself from the buyer making any changes to the property before the transfer has taken place. Therefore, you will need to include a clause in the Offer to Purchase prohibiting this. This is often a standard clause.
If the buyer starts making changes, without any form of security, you must immediately inform the Conveyancer and the agent. Thereafter, the buyer either has to halt making changes or provide collateral funds. You can then return the house can to its original state if the sale fails.
Finally, your agent will be able to advise you on procedures regarding occupation, handing over of keys, etc.