Conveyancing Terms

Property Law and Conveyancing Glossary of Terms

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Act

Legislation passed by the government.

Addendum

Attachment to an offer of purchase / deed of sale

Adminastration Fee

The monthly cost that the bank charges to facilitate the adminastration of a bond account (mortgage loan).

Affordability

An analysis of a buyers income, liabilities and available funds, in order to determine their ability to afford the purchase of a property.

Agreement of Sale

Also referred to as the Offer to Purchase. It is a legally binding document signed by the buyer and seller, whereby the buyer agrees to buy a property from the seller, who agrees to sell the property to the buyer for a proposed purchase price and conditions on which the sale will take place.

Alienation

The Alienation of Land Act 68 of 1981 governs the alienation (selling, exchanging or donating) of immovable property.

Amortization

 Loan payment by equal periodic payments calculated to pay off the mortgage at the end of a fixed period.

Amortization Term

The length of time required to repay the mortgage loan, expressed as a number of months.

Antenuptial Contract

An agreement entered into by parties prior to getting married, they will then be married out of community of property.

Appraisal

An estimate of the value of property, made by a qualified professional called an "appraiser" or "valuator".

Arbitration

Procedure whereby parties to a dispute appoint an arbitrator, whose decision is final and binding, to settle the dispute.

Assessment

The bank’s assessed valuation of the property.

Assets

What you own. Movable and immovable property plus investments such as shares; and all other belongings.

Association Agreement

An agreement concluded between the members of a close corporation, which states the contractual capacities and responsibilities of the members.

Attorney Allocation

The specific attorneys on behalf of a specific bank who are allocated to do registrations on behalf of specific bank. As a rule only attorneys on a banks approved panel are allowed to act for tha bank in respect of the registration and cancelation of bonds.

Auction

Method of selling a property to a person who makes the highest bid. Also read our informative article on buying property on auction.

Bank

A financial institution.

Body Corporate

The controlling body of a sectional title scheme, responsible for the costs of upkeep and maintenance of the property.

Bond

Contract of loan between the customer and a bank in the form of a homeloan, whereby the property is used as the security for the loan. It is a legal document that pledges a property to the lender as security for payment of a debt.

Bond Registration Fees

Payable by the borrower to the bond attorneys who are attending to the registration of the bond at the Deeds Office.

Bond Term

The time period, over which you have to repay your home loan.

Borrower

The person who applies for and receives a mortgage loan with the intention of repaying the full loan amount.

Breach Clause

A condition in a contract setting out the rights, responsibilties, procedures and remedies in the event that one of the parties defaults on his/her/it's/their obligations on terms of the deed of sale.

Cancellation Attorney

This attorney attends to the cancellation of the seller’s bond and is appointed by the bank, which holds the current mortgage bond.  Afrikaans - Verband Kanselasie Prokureur

Cancellation Figures

Outstanding amount on the mortgage, interest and any other costs required to settle the mortgage bond. Afrikaans - Kanselasie Syfers

Capital Gains Tax

Tax All taxpayers are taxed by the government on the profit they make from the sale or disposal of an asset , such as property. Afrikaans - kapitaalwinsbelasting

Capital Redemption

Repaying the capital amount in addition to the monthly bond repayments. Afrikaans - Kapitaaldelging

Cash Flow

The amount of cash derived over a certain period of time. Afrikaans - Kontantvloei

Cession

A document signed by the borrower, ceding their life policy to the bank, as surety for a mortgage. Afrikaans - Sessie

Clearance Certificate

Issued by the relevant authority stating that the rates or levies for the property have been paid up to a future date. Afrikaans - Klaringsertifikaat

Close Corporation (CC)

A business entity registered in terms of the Close Corporations Act 69 of 1984. A maximum of ten natural people can be members of a CC. It may conclude agreements of sale or leases in it’s own name. Afrikaans - Beslote Korporasie (BK)

Code of Conduct

A set of ethical rules drawn up by the Estate Agency Affairs Board to regulate estate agents’ ethical conduct. Afrikaans - Gedragskode

Collateral

The amount of security provided to secure a mortgage bond. Afrikaans - Kollaterale

Commercial Property

Property used for business or office use. Afrikaans - Kommersiële Eiendom

Commission

See Professional Fee. Afrikaans - Eiendoms Kommisie

Common Law

The law that automatically applies if the parties have not reached an agreement on a specific legal issue in the Offer to Purchase. The South African common law is the Roman Dutch Law. Afrikaans - Algemene wet

Common Property

It is all the land in a sectional title complex, as well as those parts of the buildings which are not included in a particular section or unit. Common property can include stairwells, lifts or elevators, carports, swimming pools, gardens, etc. Afrikaans - Gemeenskaplike Eiendom

Company

A trading entity that is commonly used for commercial activity and may enter into agreements of sale or lease in its own name. Afrikaans - Maatskappy

Condition

A clause that renders the operation and consequences of the contract as a whole dependent on an uncertain future event. A suspensive condition suspends the operation of the contract for a period of time, subject to the occurrence of a future event, and only if and when the condition has been fulfilled will an enforceable contract exist. In the case where a resolutive condition is stipulated, the contract is immediately binding and will remain binding unless the condition is not fulfilled. Afrikaans - Toestand

Conditions of Title

Restrictive conditions limiting an owner's rights over their property, which are recorded on the property’s title deed. They cover matters such as building limitations, mineral right reservations and servitudes. Afrikaan - Titelvoorwaardes

Consolidation of Debt

Applies when a customer is paying off two products bought on credit and he chooses to combine both products and pay them off as one debt, possibly taking advantage of a lower rate. Afrikaans - Konsolidasie van skuld

Contract

A legally enforceable agreement, for example a lease or sale. Afrikaans - Kontrak

Conveyancer

An attorney who is appointed by the seller and is qualified to attend to the registration and transfer of immovable property from a seller to a purchaser and the registration of any bonds. Afrikaans - Aktebesorger

Conveyancing Cost

Costs payable to the conveyancer. Afrikaans - Aktebesorging Koste

Cooling-off Right

A statutory right, recorded in Section 29A of the Alienation of Land Act, giving the buyer of a residential property costing R250,000 or less, the right to withdraw from the sale within five working days of signing the offer to purchase. It does not apply if the buyer is a company, close corporation or trust. Afrikaans - Afkoel Klousule

Cost Clause

Makes provision in a mortgage loan document, securing an additional amount lent, to cover potential costs, such as transfer and bond costs. Afrikaans - koste klousule

Credit Record

The credit history and current status of a borrower's credit standing. Afrikaans - Kredietrekord

Creditor

Someone to whom you owe money. Afrikaans - Skuldeiser

Debit Order

Debit Order An instruction to the bank to debit your account monthly with your monthly expenses, i.e. your homeloan installment. Afrikaans - Debietorder

Debtor

Someone who owes you money. Afrikaans - Skuldenaar

Deed of Sale

Also referred to as the Agreement of Sale or Offer to Purchase. Afrikaans - Koopkontrak

Deed office Registration Fees

Charged by the Deeds Office for registering the mortgage bond and title deed. Afrikaans - Aktekantoor Registrasiefooie

Deeds office

A government department responsible for the registration of transfer of immovable property. Afrikaans - Aktekantoor

Default

Failure to meet legal obligations in a contract. Afrikaans - Standaard

Defect

A patent defect is a clearly visible defect. A latent defect is a fault or flaw that is not immediately detectable, or is hidden from view on inspection of the property. Afrikaans - Defek

Deposit

Money you have readily available that you use as part of the payment on your new property. When renting property, a deposit is an amount that you pay upfront and is used as security in the event that you cause any damage to the property while renting it. Afrikaans - Deposito

Domicilia Citandi et Executandi

Also referred to as Domicilium. It is the physical address a person gives for any legal documents and notices that might have to be served, it is the place where a person is deemed to be a permanent resident and may not be be a PO Box or Private Bag Address. . If you have been sent a document or notice to this address, you will be deemed to have received it, even if you did not in fact receive it. Afrikaans - Betekeninings Adres

Domicilium

See Domicilia Citandi et Executandi. Afrikaans - Domisilie

Down Payment

Money paid to make up the difference between the purchase price and the mortgage amount. Afrikaans - Af Betaling

Duet House

One of two separate free-standing or attached units that have been built on one stand. Afrikaans - Duet Behuising

Duplex

A sectional title unit on two levels with stairs. Afrikaans - Duplex

 

 

Dwelling

Any house, flat, apartment, room, hostel room, hut, shack, outbuilding, garage or demarcated parking space. Afrikaans - Woning

Electrical Compliance Certificate

A certificate, which is issued by a qualified electrician stating that the electricity installation for a property, from its supply point, is safe according to the Occupational Health and Safety Act. The cost of this and any electrical repairs that need to be made are for the seller’s account. It is legally required in order for the property to be transferred into the purchaser’s name. Afrikaans - Elektriese Compliance Sertifikaat

Endorsement

A note made on the title deed of a property by the Registrar of Deeds. Afrikaans - Endossement

Entomologist's Certificate

Legally required in some coastal provinces before transfer of a property can take place, confirming that its structure is free of wood borer or termite infestation. Afrikaans - Entomoloog Sertifikaat

Equity

The value of a property an owner has over and above the mortgage against the property.

Escape Clause

A condition in a contract, when a buyer is given time to sell his property first, giving the seller the right to cancel the agreement if he gets a higher offer from another buyer.

Estate

When a person dies, all their assets and liabilities will be placed in their deceased estate, which is wound up by an executor. Afrikaans - Boedel

Evaluation

A realtor gives an informed opinion on the market value of a property, commonly known as a comparative market analysis (CMA). Afrikaans - Evaluering

Exclusive Use Area

The owner of a sectional title unit can never become the owner of any portion of common property, but they can acquire the right of the exclusive use of a certain portion, such as gardens and parking bays. Afrikaans - Eksklusiewe Gebruiks Area

Expropriation

Procedure where a property is taken over, usually by local authorities, for specific purposes in the public interest. Afrikaans - Onteiening

Finance

Money. Afrikaans - Finansies

Finance Charges

The interest charged on a loan. Afrikaans - Finansieringskoste 

First Mortgage

The primary lien against a property. Afrikaans - Eerste Verband

Fixed Installment

The fixed monthly payment (including interest) due on a mortgage loan. It remains constant for a certain period, and goes hand-in-hand with Fixed Interest Rates. Afrikaans - Vastepaaiement

Fixed Interest Rate

The mortgage interest rate will remain the same for a specified term of the mortgage for the original borrower. Afrikaans - Vaste Rentekoers

Fixtures and Fittings

Attachments to a home, which are deemed to permanently belong to it. If it is permanently attached, nailed or screwed into the floor, wall or ceiling, it is a fixture. Afrikaans - Toebehore

Foreclosure

A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property. Afrikaans - Eksekusie

Freehold

A free-standing house on a plot of ground with its own Erf number. Afrikaans - Eiendomsreg

Full Title

Describes the transfer of full ownership rights to the buyer. Afrikaans - Volledige Titel

Guarantee

Guarantee A formal letter issued by a financial institution to the transferring attorney, undertaking to pay the purchase price (or outstanding amount) on registration of transfer of the property into the name of the buyer. Afrikaans - Waarborg

Home Owners Assurance

Insurance taken out to cover your property from damage caused by fire, rain, a broken geyser, etc. Afrikaans - Huiseienaar Versekering

Homeloan

An agreement between the customer and a bank whereby the bank lends the customer money in return for a security (mortgage bond) being registered over the property in the bank’s favour Afrikaans - Huislening

House

A dwelling, usually in the form of a freehold property, with a structure built on it for the use of living in it. Afrikaans - Huis

House Rules

These are the rules governing the control and management of the property in a sectional title development. Afrikaans - Huis Reëls

Householder's Insurance

Insurance against the loss of or damage to the contents or belongings of a residence. Afrikaans - Huise Eienaars Versekering

Huur Gaat Voor Koop

Lease goes before sale’ – where leased properties are sold before the lease expires, the tenant may remain in occupation of the premises until the lease expires.

Immovable Property

Land and everything that is permanently attached to it. Afrikaans - Onroerende Eiendom

Initiation Fee

A once-off fee charged by the bank to offset the cost of opening the mortgage account. Afrikaans - Aanvangsgelde

Insolvent

A person who is unable to meet his debts or discharge liabilities.

Installment

The regular monthly amount that a borrower agrees to pay on an outstanding debt to a lender. Afrikaans - Paaiement

Interest

The fee charged for borrowing money. Afrikaans - Belangstelling

Interest Bearing Account

When attorneys and/or realtors hold money for clients, it is deposited into separate Interest Bearing Accounts, until these monies and interest accrued during this time have to be paid out to whom they are owed. Afrikaans - Rentedraende Rekening

Interest Rates

The percentage of a loan that a financial institution charges, which is payable monthly. Afrikaans - Rentekoerse

Investor

A money source for a lender. Afrikaans - Beleggers

Joint Income

The total gross income of the mortgage applicants. Afrikaans - Gesamentlike Inkomste

Joint Venture

An investment entity formed by one or more entities in order to acquire or develop and manage assets.

Judgement

A legal recording of a person’s inability to honour a debt. Afrikaans - Vonnis

Landlord

The person who lets out a property to someone else. Afrikaans - Verhuurder

latent defect

A latent defect, on the other hand, is one that cannot be seen or ascertained during the course of a normal property inspection.