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OFFER TO PURCHASE

In and between:

___________________________________
(Hereinafter referred to as "the Purchaser")


And


___________________________________
(Hereinafter referred to as "the Seller")
  

The Purchaser hereby offers to purchase the Property mentioned below, from the Seller on the terms and conditions contained in this agreement.

                                                                                   FULL TITLE

Stand number: _____________________________________________

Suburb: ___________________________________________________

Township: _________________________________________________

Street Address: _____________________________________________


                                                                                            Or

                                                                              SECTIONAL TITLE

Unit number:………Flat/Townhouse number:…Stand number ……In the Scheme:..........
……………………………….in the Township of …………….together with an undivided share in the common Property in the scheme and the exclusive use and enjoyment of the following areas of the common

Property and/or buildings namely: ………………………………………………………..

And carport/garage number: …………….

(Hereinafter referred to as "the Property")




1.   SALE AND PURCHASE

The Seller hereby sells to the Purchaser the Property, together with all permanent improvements, fixtures and fittings, which will include the following:

1.1    Including
Built-in stove (stovetop and oven); built-in units and cupboards; electrical installations and light fittings; curtain fittings and rails; wall-to-wall carpeting; blinds and awnings; swimming pool pumps and engines; swimming pool equipment and automatic swimming pool cleaners in working order on date of occupation, installed alarm system; electronic consoles and existing keys; built-in braai and accessories; all fencing and trees; shrubs and plants; television aerials and satellite dish (including M-Net and DSTV connections); built-in heaters; built-in air-conditioning systems. Tennis court nets; bar stools.
(Delete whichever is not applicable.)

                                                                             
Also including:……………………………………………………………………………........................
…………………………………………………………………………………………………………….
       Which include accessories the Seller warrants to be paid in full and to be the sole beneficial owner of.

1.2    Excluding: ……………………………………………………………….................................................
…………………………………………………………………………………………………………….


2.    PURCHASE PRICE

The purchase price for the Property is the sum of R ……………………… ( …………………………
………………………………………………………….rand)  (value added tax included if applicable),
payable as follows: (read together with clause 19)

2.1   A DEPOSIT for the amount of R ………………………………….. ( …………………………………
        ……………………………………………………………………………………………………...rand);

        The Purchaser shall pay the deposit or the full purchase price to the conveyancer within ……. ( …….
        ……………………………………………………………………………………………………………
        ……………………) days to be kept in trust until registration of the transfer by the conveyancer, in an
        Interest bearing account at a financial institution of his choice. The interest accrued on the amount
        Shall be for the benefit of the Purchaser.

3.    SUSPENSIVE CONDITIONS

    The Purchaser shall apply for a LOAN in the amount of R …………………………………………...
( ……………………………………………………………………………………………………rand);

This agreement is subject to the suspensive condition that the Purchaser received approval of the loan within ……………………( ……………) days after signature of this agreement, from a financial institution, against registration of a first mortgage bond over the Property.

3.1.1    The Purchaser shall apply for such a loan on the first business day after acceptance of this
Offer by the Seller. In this regard the Agency is irrevocably authorized to apply for such loan through Bond Choice Home Loans on behalf of the Purchaser, at Banks and/or other Financial Institutions which may be appropriate under the circumstances.

3.1.2    The Purchaser undertakes to provide all documentation and information that may be
Necessary to fulfil the above mentioned conditions on request from the Agency/Seller/Bank Consultant. The loan obtained by the Purchaser shall be subject to the normal terms and conditions of banks and/or other financial institutions, where the application for the loan was made.

4.    GUARANTEES

        The full purchase price/balance of the purchase price shall be payable to the Seller against registration
        Of  transfer of the Property into in the name of the Purchaser and shall be secured by a bank or
        other acceptable guarantee furnished by the
        Purchaser within ……………………….( ………………………) days after signature of this
        Agreement, and if this offer is subject to any suspensive conditions within 14 ( fourteen) days after
        Fulfillment of the suspensive condition (s).

5.    OCCUPATION

    Undisturbed occupation of the Property shall be given to the Purchaser on …………………..or as
Otherwise agreed between the parties in writing, as soon as all suspensive conditions in terms if this agreement have been fulfilled.

    If the date of occupation does not coincide with the date of registration of transfer, the party
Occupying the Property while it is registered in the name of the other party, shall pay monthly in advance on the first day of the month for the period of occupation, as compensation, occupation rental in the amount of R ………………..( …………………….rand). which amount must be paid to the conveyancer. In the event of registration of transfer during a month, the coneyancer will refund the Purchaser/Seller pro rata for any amount of occupational rent paid in advance. Such refund will be calculated for the period between the date of registration of the transfer until the end of  the month for which occupational rent was paid.

     In the event of the Property being let to a tenant, the Purchaser's right to occupation will be subject
to the tenant's rights in terms of the lease agreement. The rental income will still be due to the Seller until the date of registration of transfer into the name of the Purchaser.

6.    RISK AND BENEFIT

On date of registration of transfer, all risks of damage in connection with the Property and ownership shall be transferred to the Purchaser, together with all the benefits and responsibilities for payment of any rates, Property taxes and/or expenses in connection with the Property. The Purchaser shall also be responsible to insure the Property against any contingency.

7.    LEVIES
SECTIONAL TITLES
  
         The Purchaser confirms that he/she is aware that:

7.1    The Property is subject to the conditions of the Sectional Title Act, nr 95 of 1986;
7.2    The Property is situated within a Sectional Title Scheme which inter alia means that the Purchaser shall receive ownership of the Property and that he/she shall also have the right to sell or lease the Property;
7.3    The Purchaser of a unit automatically becomes a member of the Body Corporate, a non-profit organization in terms of the Sectional Title Act. The Purchaser agrees to confirm to the rules of the Body Corporate.
7.4    The developer has registered a real right of extension in terms of section 25(9) of Act 95 of 1986 and that until such right does not longer exist, the Purchaser's right shall be subject to the real right of extension of the developer.

HOMEOWNERS ASSOCIATIONS

7.5    The Purchaser is aware that a homeowners association exist to which he/she becomes a member with
Transfer of the Property and will therefore be bound by the constitution of the Homeowners Association.
7.6    A monthly Homeowners Association / Body Corporate levy in the amount of R ……………( ……….
……………………rand) per month , is payable to ………………………..at telephone number: ……………………

8.    TRANSFER AND COSTS

The conveyancer shall ensure the registration of the transfer immediately after all the suspensive and all other relevant conditions as set out in this agreement have been fulfilled. Transfer and bond costs must be paid on request, immediately by the Purchaser to the transfer-and bond attorneys. The Purchaser and Seller must immediately and on request, provide all information and sign all documents in order to ensure registration of the Property and/or bond(s) over the Property.
 
9.    VOETSTOOTS

The Property is sold VOETSTOOTS, subject to all conditions of title and servitudes contained in the current and/or previous Title Deeds of the Property, which are available for public inspection at the relevant deeds office, as well as any new conditions of title and servitudes that may exist regarding the current condition and size of the Property.

All parties declare that they are acquainted with the VOETSTOOTS clause and the legal effect thereof. The Property is sold in its current condition, excluding any normal wear and tear from the date of signature of this agreement to the date of registration.

10.    GUARANTEES AND WARRANTIES BY THE SELLER

    The Seller warrants that he has provided all relevant information relating to the Property and the
Condition thereof to the Agency in writing, The Seller hereby indemnifies the Agency against any liability in the event of the Purchaser instituting a claim against the Agency due to any defects in the Property not disclosed by the Seller.

    The Purchaser confirms that neither the Seller, nor anyone on his behalf have provided any
Warranties or given any guarantees in respect of any aspect relating to the quality of the Property which are not contained in this agreement.

    The Seller confirms that:

10.4.1   the purchase price is sufficient to settle all outstanding obligations relevant to the sale of the
      Property, including , but not limited to the existing bonds, agent's commission, outstanding
      Outstanding statutory fees and/or levies, or any other costs normally associated with the
      Transfer of Property.

        10.4.2   In the event of any shortfall as referred to in 10.4.1 above, such shortfall shall be paid by the
                     Seller to the conveyancer on demand.

11.    DELAYS

The Property shall within a reasonable period after signing of the agreement be registered in the name of the Purchaser. Should any party cause an unreasonable delay in the transfer process, the party who is responsible for the delay shall be liable to the other party for interest to be paid at the prime rate plus 2% (two percent) on the purchase price calculated for the period of the delay. The aggrieved party shall in terms of this clause, be entitled to claim penalty interest from the party responsible for the delay. This remedy is in addition to any other remedy the aggrieved party may have in law or in terms of this agreement.

12.    JURISTIC PERSON AND AUTHORITY

    Representation:
        Any natural person signing on behalf of a juristic person, whether registered or still
In the process of registration, personally warrants that the entering into of this agreement by the juristic person concerned is within the scope of its powers, objects and authority and does not contravene any provisions of the Companies Act 61 of 1973, the Close Corporations Act 69 of 1984 or the Trust Property Control Act 57 of 1988, and that all the necessary steps have been taken to give the signatory the power to execute this agreement on behalf of the juristic person and in particular, but without limitation, the directors, members or trustees have approved this agreement in specific terms.


13.    BREACH

    Should either the Seller/Purchaser breach any of the terms of this agreement and fail to remedy such
Breach within 14 (fourteen) days after receipt of either a hand delivered notice, or a fax, or a notice notice dispatched by prepaid registered post to the defaulting party's domicilium calling upon the defaulting party to remedy the breach, then the aggrieved party shall, without prejudice to any other rights that he may have, be entitled to:

    cancel this agreement and institute action for damages sustained; alternatively
    claim specific performance in terms of this agreement, together with damages.

 13.2  In the event of the agreement being cancelled as a result of a breach by the Purchaser, the
          Purchaser obliged to vacate the Property immediately (in the event of the Purchaser already
          Occupying the Property) and the Seller is entitled to retain all amounts paid by the Purchaser
          together with any interest thereon as a pre-estimate of damages, alternatively, to retain such
          Amounts until such time as the Seller's claim have been determined and such amounts are off-set
          against each other.

13.3 The parties choose the following domilcillium address:

13.3.1    The Seller

Physical Address: __________________________________________________________________

Postal Address ___________________________________________________________________
 
Fax Number: _____________________________________________________________________

Contact Person: ______________________________________

Contact Number: _____________________________________







13.3.2 The Purchaser

Physical Address: __________________________________________________________________

Postal Address ___________________________________________________________________
 
Fax Number: _____________________________________________________________________

Contact Person: ______________________________________

Contact Number: _____________________________________


14.    ELECTRICAL COMPLIANCE CERTIFICATE

    The Seller is obliged to deliver to the Conveyancer , at his own expense, a certificate of compliance
Issued by a qualified electrician in terms of the Electrical Installation Regulation of 1992, promulagated under Act 6 of 1983 and amended under Act 85 of 1993 (an "accredited person"), with regard to the writing of the Property, wherein the electrician states that he has examined the wiring from the point of entry of the Property to the utility point and found it reasonably safe, and guarantees that the wiring meets the requirements set in the Code for wiring of premises SABS 0142 M or the substitute thereof.

     Any defect in the wiring discovered during the abovementioned examination must be rectified by the
Seller before transfer of the Property, failing which the Purchaser shall be entitled to rectify it for the account of the Seller, and he will be entitled to deduct such costs from the purchase price.


15.    BEETLE CERTIFICATE (Kwazulu Natal/Cape Province)

The Seller shall at his own expense arrange for the accessible portions of the building/s on the Property to be inspected by a government accredited entomologist and/or qualified, accredited firm for infestation by visible wood bored beetle ("Oxypleuris Nodieri, Hylotrupes Bajulus and Anobium Punctatum") and prior to registration of transfer furnish the Purchaser with a cerfificate by the aforesaid entomologist and/or firm recording that the accessible timbers of the buildings were inspected and found to be free from such infestation or that such infested timbers had been treated/removed and replaced with pre-treated timbers by a qualified reputable contractor.(Delete whichever is not applicable)

16.    AGENTS COMMISSION

16.1 The parties confirm that ______________________________________________was the effective cause of this agreement.

16.2 Agent's commission shall be paid by the Seller in the amount of

        R ……………………….. ( ………………………………………….rand ) plus V.A.T.
        Or ……………………%  ( ………………………………………….percentage) of the purchase price,
        Plus V.A.T. which commission is deemed to be earned on fulfillment of the suspensive condition/s,       
        Which is due and payable on the registration of the transfer of the Property into the name of the
        Purchaser.

17.    COOLING-OFF PERIOD

The parties confirm that they are fully aware of their rights in terms of Section 29(A)(1) of the Alienation of Land Act 68 of 1981 (as amended), in terms of which the Purchaser is entitled to recall his offer by written notice to the Seller, should the purchase price be less or equal to R250 000-009(two hundred and fifty thousand rand) within 5(five) business days after signature of this offer by the Purchaser.


18.    SOLD BOARDS
 
       The Seller and Purchaser herewith give their consent to the display of a for sale/sold board in front of
       The Property for a period f 3 (three) months after all suspensive condition have been fulfilled.

19.    VALUE-ADDED TAX (VAT)

If the Seller is registered as a value added tax vendor and the transaction is subject to payment of value added tax, the value added tax will be included in the purchase price and it is the responsibility of the Seller to pay such value added tax to the South African Revenue Service on registration. In the event that value added tax is payable, no transfer duty shall be payable by the Purchaser. If the Seller confirms that he is not registered for value added tax, transfer duty shall be payable by the Purchaser on the purchase price.

20.    GENERAL

    No failure, omission of waiver or relaxation of any of the provisions of this agreement, nor any failure
By a party to enforce the provisions of this agreement due to any breach, shall operate as an estoppel against any party in respect of its rights, under this agreement, nor shall it preclude such party thereafter from exercising its rights strictly in accordance with this agreement.

    No rights in terms of this agreement may be ceded, delegated and/or transferred without the written
Consent of the other party.

    Signature of this agreement refer to the date on which the Seller accepts this offer.

20.4 Days in this agreement refers to calendar days, Saturdays, Sundays and public holidays included, the
        First day excluded and the last day included. If the agreement is forwarded by registered post, the day
        On which the Post Office's slip is issued shall be included.
     The Purchaser and Seller herewith choose as domicilium citandi et executandi, the addresses as
Stated in the information sheet, for the service and/or delivery of all notices and documents in terms of this agreement.


21.    SPECIAL CONDITIONS

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22.    ACCEPTANCE

This offer is irrevocable until …………………:00 ( …………………….hours )on the ……………….

( ……………………………..) day of ……………………………………..20 …………and is binding on the parties by acceptance hereof without the Purchaser having to be informed of the Seller's acceptance.




23.    WHOLE AGREEMENT

This agreement constitutes the entire agreement between the parties and no conditions, stipulations, warranties or representations of whatsoever nature shall be of any force or effect unless reduced to writing and signed by both parties.

                                                                                  OFFER MADE BY ME/US

at ……………………………. on this …………………….day of …………………..20 ……………..



……………………………………………                           ……………………………………………
                       WITNESS                                                                           PURCHASER


...................................................................                            ……………………………………………
                       WITNESS                                                                    CO-PURCHASER


                                                                                               ....................................................................
                                                                                                                      SURETY

                                                                                 OFFER ACCEPTED BY ME/US


at …………………………………on this …………………day of …………………………20 ………


and we/l hereby give instruction to attorneys ……………………………….. to register the transfer of the Property.




…………………………………………….                                     ……………………………………..
                      WITNESS                                                                                         SELLER



…………………………………………….                                     ……………………………………..
                      WITNESS                                                                                     CO-SELLER

The Agency herewith accepts the benefits, which they will receive from the agreement.


……………………………………………                                      ……………………………………..              AGENT                                                                                         PRINCIPAL      
 

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No Transfer Duty from Company, CC or Trust

Transfers can take place from a Company, Close Corporation and Trust to its Shareholder / Member or Beneficiary free of Transfer Duties from 11 September2009 until 31 December 2011 subject to terms and conditions.

A Transfer Duty Exemptions is provided by the Receiver of Revenue and for this purpose, the following documents have to be lodged with the Receiver in addition to the standard affidavits (TD1/TD2):

- The Deed of Sale between the Company/Close Corporation/Trust and the Shareholder/Member/Beneficiary in his individual capacity;
- The affidavits and Conveyancer certificate attached hereto; - Copies of the Share register/CK1/CK2/Trust Deed indicating the beneficial interest from 11 September 2009.

For Further information contact :

Louwrens Koen Attorneys & Conveyancers
Tel: 012-343 0267
koen@louwrenskoen.co.za

Property transfer, Bond Registration, Property Law and Conveyancing explained.

OFFER TO PURCHASE PROPERTY

OFFER TO PURCHASE

By:.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

(“the Purchaser�)

To:..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

(“the Seller�)

The Purchaser hereby offers, through the agency of Swan Properties (“the Agency�), to purchase the Property mentioned below, from the Seller on the terms and conditions contained in this agreement:

FULL TITLE

Stand Number:.......................Street Address...........................................................................................................

Suburb: ........................................................ Township:………….…........................................................................

or

SECTIONAL TITLE

Unit Number........... Flat / Townhouse number …...... Stand number................ in the Scheme…....... ……………………..in the Township of ....................................... together with an undivided share in the common Property in the scheme and the exclusive use and enjoyment of the following areas of the common Property and / or buildings namely:……………………………………......................................................................................

and carport/garage number. ................

(“the Property�)

1.            SALE AND PURCHASE

The Seller hereby sells to the Purchaser the Property together with all permanent improvements, fixtures and fittings which will include the following:

1.1          Including:

Built in stove (stovetop and oven); built-in units and cupboards electrical installations and light fittings; curtain fittings and rails; wall –to- wall carpeting; blinds and awnings; swimming pool pumps and engines; swimming pool equipment and automatic swimming pool cleaners in working order on date of occupation, installed alarm system, electronic consoles and existing keys; built-in braai and accessories, all fencing and trees; shrubs and plants; television aerials and satellite dish (including M-net and DSTV connections); built-in heaters, built-in air conditioning systems; tennis court nets, bar stools.

(Delete whichever is not applicable)

1.2          Also including: ………………………………………………………………………………………………………………..

………………………………………………………………………………………………………………………….………which include accessories the Seller warrants to be paid for in full and to be the sole beneficial owner of

1.3 Excluding:…………………………………………………............................................................................................

............................................................................................................................................ ………………………….

2.            PURCHASE PRICE

The purchase price of the Property is the sum of R ..................................... (…………………………………. ........................................................ rand) (value added tax included if applicable), payable as follows: (read together with clause 19)

2.1          A DEPOSIT for the amount of R.............................. (……………………………..…................................................. …………………………………………………….………………………………………………………………..……rand);

The Purchaser shall pay the deposit or the full purchase price to the conveyancer within .................... (................................................) days to be kept in trust until registration of the transfer by the conveyancer, in an interest bearing account at a financial institution of his choice. The interest accrued on the amount shall be for the benefit of the Purchaser.

3.            SUSPENSIVE CONDITIONS

3.1          The Purchaser shall apply for a LOAN in the amount of R….............................................................................

(.......................................................................................................................................................................rand);

This agreement is subject to the suspensive condition that the Purchaser receives approval of the loan within.................. (......................................) days after signature of this agreement, from a financial institution, against registration of a first mortgage bond over the Property.

3.1.1      The Purchaser shall apply for such a loan on the first business day after acceptance of this offer by the Seller. In this regard the Agency is irrevocably authorised to apply for such loan through Bond Choice Home Loans on behalf of the Purchaser, at Banks and/or other Financial Institutions which may be appropriate under the circumstances.

3.1.2      The Purchaser undertakes to provide all documentation and information that may be necessary to fulfil the above mentioned conditions on request from the Agency/Seller/Bank Consultant. The loan obtained by the Purchaser shall be subject to the normal terms and conditions of banks and/or other financial institutions, where the application for the Bond was made.

3.1.3      If the Purchaser’s loan is not approved within the provided time period, the period will automatically be extended with 14 (fourteen) days.

3.2          The SALE of Purchaser’s Property for the amount of R.....................................................................................

(....................................................................................................................................................................... rand)

or for such a lesser amount as the Purchaser may accept. This agreement is subject to the suspensive condition that the Purchaser sells his Property, with Property description...............................................................

………………………………………………………………………………………………………………………………….within …………………..(……………………………………….) days after signature hereof.

3.2.1      The Purchaser must sell his Property described in clause 3.2 (“the Purchaser’s Property�). The Seller is aware that the Purchaser will apply the net proceeds of such sale to meet his obligations in terms of this agreement. The Purchaser’s Property shall be considered sold if:

3.2.1.1   a purchase and sale agreement of the Purchaser’s Property is entered into within the period stipulated in clause 3.2. and

3.2.1.2   all the suspensive conditions in the sale agreement of the Purchaser’s Property are fulfilled.

3.2.2      It is consequently agreed that:

3.2.2.1   The Purchaser shall receive a guarantee for the payment of the purchase price, or a part thereof, of his

Property within …………(………………………………………..) days after the conditions in 3.2.1 have been fulfilled, which guarantees shall be delivered to the Seller or his conveyancer;

3.2.2.2   Registrations of the transfer of the Purchaser’s Property shall take place within a reasonable time;

3.2.2.3   If the Purchaser’s Property has already been sold at the time of signature of this agreement, the time periods as set out above will be applicable to such transaction;

3.2.2.4   if the Seller receives an unconditional offer to purchase the Property before the conditions contained in 3.2.1.1 and 3.2.1.2 are fulfilled, the Seller shall deliver to the Purchaser a copy of such offer, whereupon the Purchaser shall be obliged to fulfil such conditions within 5 (five) days, or to waive the conditions contained in clause 3.2. The Purchaser shall give written notice to the Seller regarding his decision failing which this offer shall expire immediately and any amount already paid by the Purchaser shall be reimbursed together within any interest accrued thereon.

3.3          ANOTHER SOURCE for the amount of R……………………………………………………………………………..

(....................................................................................................................................................................... rand)

Other source/Other: ...........................................................................................................

Written proof of the existence of the other source shall be provided to the conveyancer within ..................... (..................................................) days after the signature date of this agreement..

4.            GUARANTEES

The full purchase price/balance of the purchase price shall be payable to the Seller against registration of transfer of the Property into in the name of the Purchaseer and shall be secured by a bank or other acceptable guarantee furnished by the Purchaser within .................... (...........................................) days after signature of this agreement, and if this offer is subject to any suspensive conditions within 14 (fourteen) days after fulfilment of the suspensive condition(s).

5.            OCCUPATION

5.1          Undisturbed occupation of the Property shall be given to the Purchaser on REGISTRATION or as otherwise agreed between the parties in writing, as soon as all suspensive conditions in terms of this agreement have been fulfilled

5.2          In the event of the Property being let to a tenant, the Purchaser’s right to occupation will be subject to the tenant’s rights in terms of the lease agreement. The rental income will still be due to the Seller until date of registration of transfer into the name of the Purchaser.

6.            RISK AND BENEFIT

On date of registration the transfer, all risks of damage in connection with the Property and ownership shall be transferred to the Purchaser, together with all the benefits and responsiblities for payment of any rates, Property taxes and/or expenses in connection with the Property. The Purchaser shall also be responsible to insure the Property against any contingency

7.            LEVIES

                SECTIONAL TITLES

The Purchaser confirms that he/she is aware that:

7.1          The Property is subject to the conditions of the Sectional Title Act, nr 95 of 1986;

7.2          The Property is situated within a Sectional Title Scheme which inter alia means that the Purchasers shall receive ownership of the Property and that he / she shall also have a right to sell or lease the Property;

7.3          The Purchaser of a unit automatically becomes a member of the Body Corporate, a non-profit organisation in terms of the Sectional Title Act. The Purchaser agrees to conform to the rules of the Body Corperate;

7.4          The developer has registered a real right of extension in terms of the section 25(9) of Act 95 of 1986 and that until such right does no longer exist, the Purchaser’s right shall be subject to the real right of extension of the developer.

HOMEOWNERS ASSOCIATIONS

7.5          The Purchaser is aware that a homeowners association exist to which he/she becomes a member with transfer of the Property and will therefore be bound by the constitution of the Homeowners Association.

7.6          A monthly Homeowners Association / Body Corporate levy in the amount of R……….............(…………...............

...................................................rand) per month, is payable to ................................................................... at Telephone Number. .........................................................................

8.            TRANSFER AND COSTS

The conveyancer shall ensure the registration of the transfer immediately after all the suspensive and all other relevant conditions as set out in this agreement have been fulfilled. Transfer and bond costs must be paid on request, immediately by the Purchaser to the transfer- and bond attorneys. The Purchaser and Seller must immediately and on request, provide all information and sign all documents in order to ensure registration of the Property and/or bond(s) over the Property.

9.            VOETSTOOTS

The property is sold VOETSTOOTS, subject to all conditions of title and servitudes contained in the current and/or previous Title Deeds of the Property, which are available for public inspection at the relevant deeds office, as well as any new conditions of title and servitudes that may exist regarding the current condition and size of the Property. The Agent shall not be liable for any patent or latent defect in the Property, nor for any damages suffered by the Purchaser as a result of such defect. All parties declare that they are acquainted with the VOETSTOOTS clause and the legal effect thereof. The Property is sold in its current condition, excluding any normal wear and tear from the date of signature of this agreement to date of registration.

10.          GUARANTEES AND WARRANTIES BY THE SELLER

10.1        The Seller warrants that he has provided all relevant information relating to the Property and the condition thereof to the Agency in writing. The Seller hereby indemnifies the Agency against any liability in the event of the Purchaser instituting a claim against the Agency due to any defects in the Property not disclosed by the Seller.

10.2        The Seller is not responsible to point out the surveyor’s beacons demarcating the boundaries of the Stand to the Purchaser, and is also not liable to pay the cost to determine such boundaries.

10.3        The Purchaser confirms that neither the Seller, nor anyone on his behalf have provided any warranties or given any guarantees in respect of any aspect relating to the quality of the Property which are not contained in this agreement.

10.4        The Seller confirms that:

10.4.1    The purchase price is sufficient to settle all outstanding obligations relevant to the sale of the Property, including but not limited to the existing bonds, agent’s commission, outstanding statutory fees and/or levies, or any other costs normally associated with the transfer of Property.

10.4.2    In the event of any shortfall as referred to in 10.4.1 above, such shortfall shall be paid by the Seller to the conveyancer on demand.

 10.5       In lieu of the fact that the South African Revenue Service (SARS) conducts a risk analyses on both the Purchaser and Seller with the issue of transfer duty receipts in Property transactions, both the Purchaser and Seller warrant to each other and the agent that all taxation issues (personal and/or other), including, but not limited to tax returns and payments, have been submitted and paid timeously.

11.          DELAYS

The Property shall within a reasonable period after signing of the agreement be registered in the name of the Purchaser. Should any party cause an unreasonable delay in the transfer process, the party who is responsible for the delay shall be liable to the other party for interest to be paid at the prime rate plus 2% (two percent) on the purchase price calculated for the period of the delay.The aggrieved party shall in terms of this clause, be entitled to claim penalty interest from the party responsible for the delay. This remedy is in addition to any other remedy the aggrieved party may have in law or in terms of this agreement.

12.          JURISTIC PERSON AND AUTHORITY        

12.1        Juristic person: If the person signing this agreement, signs as Trustee, on behalf of a legal entity (Company or Close Corporation) to be registered, then it is specifically recorded that unless the legal entity is registered and ratifies this agreement within 30 (thirty) calendar days after signature of this agreement, such person by his signature hereto shall be deemed to have signed the agreement in his personal capacity. If the legal entity is however registered timeously, the signatory binds himself as surety for and co-principal debtor in solidium with the said legal entity for the due performance of its obligations in terms of this agreement.

12.2        Representation: Any natural person signing on behalf of a juristic person, whether registered or still in the process of registration, personally warrants that the entering into of this agreement by the juristic person concerned is within the scope of its powers, objects and authority and does not contravene any provisions of the Companies Act 61 of 1973, the Close Corporations Act 69 of 1984 or the Trust Property Control Act 57 of 1988, and that all the necessary steps have been taken to give the signatory the power to execute this agreement on behalf of the juristic person and in particular, but without limitation, the directors, members or trustees have approved this agreement in specific terms

12.3        Surety: If the Purchaser signs this agreement in his capacity as representative of a Trust, Company or other legal entity, the signatory binds himself as surety for and co-principal debtor in solidium with the said legal entity for the due performance of its obligations in terms of this agreement. Such a representative hereby waives all legal exceptions, including but not limited to the following: no cause of indebtedness, revision of accounts, the benefit of excussion, and the benefit of division – the nature and content of which he is aware of and undertstands.

13.          BREACH

13.1        Should either the Seller / Purchaser breach any of the terms of this agreement and fail to remedy such breach within 14 (fourteen) days after receipt of either a hand delivered notice, or a notice dispatched by prepaid registered post to the defaulting party’s domicilium calling upon the defaulting party to remedy the breach, then the aggrieved party shall, without prejudice to any other rights that he may have, be entitled to:

13.1.1    cancel this agreement and institute action for damages sustained; alternatively;

13.1.2    claim specific performance in terms of this agreement, together with damages.

13.2        In the event of the agreement being cancelled as a result of a breach by the Purchaser, the Purchaser is obliged to vacate the Property immediately (in the event of the Purchaser already occupying the Property) and the Seller is entitled to retain all amounts paid by the Purchaser together with any interest thereon as a pre-estimate of damages, alternatively, to retain such amounts until such time as the Seller’s claim have been determined and such amounts are off-set against each other.

14.          ELECTRICAL COMPLIANCE CERTIFICATE

14.1 The Seller is obliged to deliver to the Conveyancer, at his own expense, a certificate of compliance issued by a qualified electrician in terms of the Electrical Installations Regulations of 1992, promulgated under Act 6 of  1983 and amended under Act 85 of 1993 (an “accredited person�), with regard to the wiring of the Property, wherein the electrician states that he has examined the wiring from the point of entry of the Property to the utitlity point and found it reasonably safe, and guarantees that the wiring meets the requirements set in the Code for wiring the premises SABS 0142 M or the substitute thereof.

14.2 Should the Seller fail to deliver the certificate before the date of registration, the Purchaser shall be entitled to appoint a  qualified electrician to issue the abovementioned certificate for the account fo the Seller, and he will be entitled to deduct such costs form the purchase price.

14.3 Any defect in the wiring discovered during the abovementioned examination must be rectified by the Seller before transfer of the Property, failing which the Purchaser shall be entitled to rectify it for the account of the Seller, and he will be entitiled to deduct such costs from the purchase price.

14.4 The Seller undertakes not to make any changes in respect of the electrical installations in the Property after delivery of such certificate.

15.          BEETLE CERTIFICATE (Kwazulu Natal / Cape Province)

The Seller shall at his own expense arrange for the accessible portions of the building/s on the Property to be inspected by a government accredited entomologist and/or qualified, accredited firm for insfestation by visible wood borer beetle (“Oxypleuris Nodierie, Hylotrupes Bajulus and Anobium Punctatum�) and prior to registration of transfer furnish the Purchaser with a certificate by the aforesaid entomologist and / or firm recording that the accessible timbers of the buildings were inspected and found to be free from such infestation or that such infested timbers had been treated / removed and replaced with pre-treated timbers by a qualified reputable contractor. (*Delete whichever is not applicable)

16.          AGENTS COMMISSION 

16.1        The parties confirm that............................................. of _______________________________ was the effective cause of this agreement.

16.2        Agent’s commission shall be paid by the Seller in the amount of

is deemed to be earned on fulfilment of the suspensive condition/s, which is due and payable on the registration of  the transfer of the Property into the name of the Purchaser.

16.3        The Agency shall be entitled to and the Seller shall remain responsible for payment of the agent commission and/or damages should the agreement not continue or be cancelled as a result of any failure by the Seller to fulfil his obligations in terms of this agreement.

 16.4       The Agency shall be entitiled to and the Purchaser responsible for the payment of the agent commission and/or damages, should a binding agreement not be signed or if the agreement cannot continue, or if the agreement is cancelled as a result of the Purchaser’s failure to comply with his obligations in terms of this agreement.

16.5        The Agency shall be entitled to payment of the agents commission should the Seller and Purchaser agree not to proceed with this agreement. The Seller and Purchaser will in such event jointly and/or severally be liable for payment of the agent’s commission, regardless whether the suspensive condition(s) have been fulfilled or not.

16.6        Should any dispute arise between the party(ies) and the Agency in respect of the agents commission, the party(ies) and the Agency hereby agree to refer the dispute for arbitration to the Arbitration Tribunal of the Estate Agency Affairs Board. The constitution and procedural rules of the Tribunal are herewith fully incorporated into this agreement and as such it forms an integral part thereof. The referral to arbitration shall be solely at the Agency’s discretion and the Agency shall be entitled to proceed with litigation instead.

17.          COOLING-OFF PERIOD

The parties confirm that they are fully aware of their rights in terms of Section 29(A)(1)of the Alienation of Land Act 68 of 1981 (as amended), in terms of which the Purchaser is entitled to recall his offer by written notice to the Seller, should the purchase price be less or equal to R250 000.00 (two hundred and fifty thousand rand) within 5 (five) business days after signature of this offer by the Purchaser.

18.          SOLD BOARDS

The Seller and Purchaser herewith give their consent to the display of a for sale/sold board in front of the Property for a period of 3 (three)months after all suspensive conditions have been fulfilled.

19.          VALUE-ADDED TAX (VAT)

If the Seller is registered as a value added tax vendor and the transaction is subject to payment of value added tax, the value added tax will be included in the purchase price and it is the responsibility of the Seller to pay such value added tax to the South African Revenue Service on registration. In the event that value added tax in payable, no transfer duty shall be payable by the Purchaser. If the Seller confirms that he is not registered for value added tax, transfer duty shall be payable by the Purchaser on the purchase price.

20.          GENERAL

20.1        No failure, omission of waiver or relaxation of any of the provisions of this agreement, nor any failure by a party to enforce the provisions of this agreement due to any breach, shall operate as an estoppel against any party in respect of its rights, under this agreement, nor shall it preclude such party thereafter from exercising its rights strictly in accordance with this agreement.

20.2        No rights in terms of this agreement may be ceded, delegated and/or transferred without the written consent of the other party.

20.3        Signature of this agreement refer to the date on which the Seller accepts the offer.

20.4        Days in this agreement refers to calendar days, Saturdays, Sundays and public holidays included, the first day excluded and the last day included. If the agreement is forwarded by registered post, the day on which the Post Office’s slip is issued shall be included.

20.5        The Purchaser and Seller herewith choose as domicilium citandi et executandi, the addresses as stated in the information sheet, for the service and/or delivery of all notices and documents in terms of this agreement.

21.          SPECIAL CONDITIONS

............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

22.          ACCEPTANCE

This offer is irrevocable until ......................:00 (…………..............hours) on the …………………………….. (………………………………) day of ……………………………………..20……….. and is binding on the parties by acceptance hereof without the Purchaser having to be informed of the Seller’s acceptance.

23.          WHOLE AGREEMENT

This agreement constitutes the entire agreement between the parties and no conditions, stipulations, warranties or representations of whatsoever nature shall be of any force or effect unless reduced to writing and signed by both parties.

OFFER MADE BY ME/US

At __________________________________                  on this        day of                             .20

.......................................................                       ………………………………………………......

     WITNESS                                                                                                                                         PURCHASER

.........................................................                    …………………………………………….…….

WITNESS                                                          CO - PURCHASER

OFFER ACCEPTED BY ME / US

at ...................................... on this ................ day of………......................................20…………. and we/I hereby give instruction to attorneys ................................................................................... to register the transfer of the Property.

.............................................................                                                               ………..…………………………………………

WITNESS                                                                                                                              SELLER

..............................................................                                                                             ………………………..…………………………

WITNESS                                                                                                                              CO - SELLER

The Agency herewith accepts the benefits, which they will receive from the agreement.

.............................. ..............................                                                               …………..………………………………………

AGENT                                                                                                                  PRINCIPAL

INFORMATION FOR TRANSFERRING ATTORNEY

PURCHASER(S): PURCHASER A/ PURCHASER B ___________________________________________

Full name & surname (if married woman, give maiden name) ________________________________

Name & number of Company / CC / Trust. _______________________________________________

(Full names & surnames of Directors / Members)___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

ID Number / Passport Number / Registration Number    ______________________________________          

Current Physical address ____________________________________________________________________________________________________________________________________________________________________

Postal address ____________________________________________________________________________________________________________________________________________________________________

Date of birth and place of birth                  ____________________________________

Marriage Regime ( in community / out of community of Property) _________________________

Antenuptial no and where registered / country of contract marriage, if no South Africa __________________________________________________

Contact numbers : Home                             ____________________________

                              Work                                      ___________________________

                              Fax                                           ___________________________

                              Cell                                           _________________________

                              E-mail                                      ___________________________

Income Tax Number                                       __________________________

Value added tax Registration Number    __________________________          

I/we certify the above information to be correct.

………………………                     ……………………………..               ………..……………….

          DATE                                         PURCHASER A                             PURCHASER B

 INFORMATION FOR TRANFERRING ATTORNEY

SELLER(S) :          SELLER A

____________________________________________________________________________________________________________________________________________________________________Full name & surname (if married woman, give maiden name)Name & number of Company / CC / Trust.

(Full names & surnames of Directors / Members) _________________________________   

ID Number / Passport Number / Registration Number _____________________________

Current Physical address ____________________________________________________________________________________________________________________________________________________________________

Postal address

____________________________________________________________________________________________________________________________________________________________________

Date of birth and place of birth ________________________________________________               

Marriage Regime ( in community / out of community of Property)_____________________   

Antenuptial contract no and where registered / country of marriage, if no South Africa                 

Contact numbers : Home                             ____________________________________

                              Work                                       ____________________________________

                              Fax                                           ____________________________________

                              Cell                                           ____________________________________

                              E-mail                                      ____________________________________

Income Tax Number                       __________________________________________________

Value added tax Registration Number                    ____________________________________

1st  Bond holder :Bank   Branch: Acc No:                 ____________________________________

2nd Bond holder : Bank                 Branch: Acc No:                 ______________________________________

3rd  Bond holder : Bank                 Branch: Acc No:                 _______________________________________

I/we certify the above information to be correct.

………………………                     ……………………………..               ………..……………….

          DATE                                               SELLER A              …                   SELLER B

TRANFERING ATTORNEYS           

Firm :     Firm : ___________________________________________________________

Contact Person : ___________________________________________________________

E-mail :                 E-mail _____________________________________________________________

BOND ATTORNEYS _________________________________________________________

 Contact Person : __________________________________________________________

E-mail :                 E-mail _____________________________________________________________

AGENT:                Contact number:  _____________________________________________________

When the home loan is granted the normal period that the client will take to repay the bond is 20 years and the prevailing bond rate at that time will apply. The Usury Act permits a bond holder to make payments in addition to the stipulated monthly installment at any time.

However, should the bond holder wish to pay the full outstanding balance of the loan in one amount prior to the due date (the bond has to be in the books of the bank for 3 years), the following provisions will apply:

The bond holder is required to give the bank 90 days notice in writing of the date the payment will be made.

The notice may not be given before the expiry of a period of 90 days from the date when the loan was registered.

The act clearly stipulates that the bank has the right to have an account on their books for a minimum period of 180 days from inception i.e. 90 days have to lapse after registration of the bond and then 90 days notice, which should be furnished to cancel the bond within the 3 year period.

This allows the bank to recoup some of their origination costs as a result of the potential interest income that will be lost. It takes anything up to 3 years before a loan becomes profitable to the bank.

The early termination fee is not a penalty imposed by the bank, but a recovery of interest income, which is specifically provided for in legislation.

Accounts to which early termination would apply:

When a bond is cancelled within the first 3 years after registration with effect from 1 October 2001.

All home loans with a fixed or capped interest rate agreement.

Accounts to which early termination would NOT apply:

Bonds registered prior to 1 October 2001 with a variable interest rate.

Accounts where the client has given 90 days notice.

Notice is deemed given when either an attorney requests cancellation figures or if a client writes to the bank and gives notice that they wish to cancel the bond.

Process to determine finance charges debited to your home loan account:

90 Days interest is calculated on the outstanding balance at day of notice.

The provisional figure is added to the outstanding balance together with other allowances such as insurance/assurance and admin fees, etc.

On final cancellation, the unexpired portion of 90 days interest will be charged and debited to the bond account, and will be due by the bond holder.

Refund of early termination interest charged:

Should the customer take out a new bond with the bank within 6 months of settling the previous home loan account, the client needs to advise the cancellation department of the new account number.

The refund will not be considered until the new bond is registered.

To avoid early termination - give 90 days notice!

This information may be valuable to investors as they often buy off-plan and sell on once the project is completed, which means they have not paid a single bond repayment and penalty interest will apply. So, take heed of the above information to avoid these costs, or make sure you factor the cost into your new sale price.

Please note: This information may vary from bank to bank and it is recommended that you check the rules with your bond consultant.

When you buy something, there is an implied warrantee that the thing sold is free from any defects. A seller can contract out of that implied warrantee by stating that the thing sold is bought ‘as is’. Most agreements of sale of immovable property contain a voetstoots clause freeing the Seller from any liability for patent and/or latent defects, which the Buyer may later find when taking occupation of the property.

The Meaning of "Voetstoots"

The above article states that the word voetstoots is an Afrikaans term generally used to effectively describe, in just one word, the action of buying something as is, that is just as it stands in whatever condition it is, warts and all. It is essential to all sales of property purchased second hand which may well have deteriorated through normal wear and tear or which may be defective to some extent as a result of its constant use or through natural decay over a period of time. Its basic purpose is to shield the Seller from any action by the Buyer, on discovering any defects he was not aware of when purchasing the property, from doing anything to jeopardize the actual sale contract.

This is a typical voetstoots clause contained in a sale of immovable property:

The property is sold voetstoots and the Seller shall not be liable for any defects, patent, latent or otherwise in the property nor for any damage occasioned to or suffered by the Purchaser by reason of such defect. The Purchaser admits having inspected the property to his satisfaction and that no guarantees or warranties of any nature were made by the Seller or his agent regarding the condition or quality of the property or any of the improvements thereon or accessories thereof.

This illustrates a clause for the sale of a movable asset:

The (describe article sold) is sold voetstoots. The Seller shall not be responsible for any defects latent or patent or any damage resulting therefrom and the Purchaser hereby agrees to accept the (goods) as they stand with all faults.

These types of voetstoots clauses normally free the Seller from his implied warranty against all patent and latent defects. However, there are two exceptions that would entitle the purchaser either to cancel the contract or sue for a reduction in the selling price:

· The seller knew of the defects and did not disclose them to the purchaser;

· The purchaser can also cancel the contract on the basis of a fraudulent or innocent material misrepresentation, even if the sale is voetstoots (but only if the latent defect is so serious that if the purchaser had known of it he would not have bought).

Our case law provides that '...a seller who was aware of a defect will not be excused by the fact that at the time of sale he declared that he was selling the thing such as it is, and that he did not wish to be held liable for its defects ...and ‘…that the operation of the voetstoots clause was thus confined to cover those latent defects which the seller did not deliberately conceal in order to induce the contract... '

Before looking at how far this protection goes it is important to explain the distinction between these two different types of defects.

Patent defect: a defect that is, or should reasonably be, easily identifiable upon inspection of the goods or property.

Patent defects are defects which the normal person should be able to see upon an inspection of the thing sold. If the purchaser has not inspected the thing sold prior to the contract he is entitled upon receipt of the thing to examine and test the goods before legally accepting delivery. The above article describes patent defects as flaws that will be clearly visible on a normal inspection of a property. They include wall cracks, sagging gutters, broken windows, missing tiles and the like. It is a Buyer’s duty to acquaint himself with the general condition of a property on purchasing it and he cannot later claim he did not see such defects. The test is an objective one, namely what could have been seen on the original inspection of the property.

Latent defect: a defect in an article sold that is not apparent after ordinary inspection by a 'reasonable man'.

Latent defects are defects which only an expert could discover or defects which cannot be discovered by an ordinary person during a reasonably thorough inspection, for example, rising damp in a house or a motor car having been in a major car accident. The article gives more examples of latent defects: faults that are not immediately obvious and are hidden from view. These include faulty pool pumps and geysers, rusted internal pipes, leaking roofs (except where strain marks make the leak obvious) and defects that have been concealed such as dampness behind a cabinet. The test is what could not normally be seen on inspection

The Act prescribes certain information to appear in a deed of sale:

parties to the agreement;price as agreed upon and property description.

Supplementary information includes:

method of payment of purchase price;
details of financial arrangements to be made;
date of occupation and occupational interest payable; date of passing of risk concerning the property; liability for payment of transfer fees;
details of agent’s commission and liability for payment thereof and other terms as agreed upon by the parties on conclusion of the agreement of sale.

NOTE: Ownership does not pass on the date of the agreement, but only much later on date of registration. Prior to registration the purchaser
merely has a personal right to claim transfer of the property.

APPOINTMENT OF THE CONVEYANCER

According to the Common Law, it is the seller’s prerogative to appoint a conveyancer of his choice to attend to the registration of the transfer of his immovable property. Keep in mind however that several attorneys may be involved as one such transaction usually entails the following simultaneous actions:

Transfer of property from seller to purchaser;
Cancellation of seller’s existing bond and
Registration of purchaser’s new bond.

Different conveyancers therefore attend to the various transactions in this process. They are referred to as the transferring attorney (who handles the transfer), the cancellation attorney (who represents the financial institution of the seller’s existing bond) and the bond attorney (who effects the registration of the new bond in the name of the purchaser). For each of these different transactions there are different fees and expenses payable, respectively linked to the purchase price and to the amount of the bond to be registered.

The estate agent or seller provides the conveyancer with the deed of sale. The conveyancer then proceeds to gather the necessary information and documentation to proceed with the registration process. This includes:

full names, identity numbers and marital status of all parties;
- the existing title deed of the property;
- details of the cancellation figure regarding the bond (being the outstanding balance owed on the seller’s bond, including capital and interest);
- the outstanding rates and taxes/levies, which are payable monthly;
- the means by which the purchaser intends to finance the transaction, through which financial institution and the amount of the loan and
- information obtained from the Deeds Office regarding restrictions noted against the property or against any party that may influence the transaction.

DRAFTING AND SIGNING OF DOCUMENTS

After fulfillment of all suspensive conditions e.g. granting of a loan and the obtaining of all relevant information, documents are prepared for signature by all the parties.

Transfer documentation

- Power of Attorney by which the seller empowers a conveyancer to appear before the Registrar of Deeds on his behalf to register the deed of transfer;
- Insolvency and Marital Status Declarations by both parties to the transaction and
- Transfer Duty Declarations by both parties in terms of which details regarding the purchase price are declared to the Receiver of Revenue together with the payment of transfer duty.

Bond documentation

Where a part of the purchase price is being financed by means of a loan, the purchaser will sign documentation at a conveyancer acting on behalf of a financial institution, for the registration of the bond over the property as security for the loan. The required documentation is usually the following:

- Power of Attorney to pass the bond whereby the purchaser empowers a conveyancer to register the bond in favour of the financial institution who granted the loan;
- Insolvency and Marital Status Declarations and
- Standard documentation of the financial institution. Each financial institution has its own set of required documentation to be signed before registration.

STATEMENT OF ACCOUNT

The statement of account regarding the transfer usually consists of the following:

- Transfer duty: This is a form of tax payable to the Government, calculated at a specified rate on the value of the property. If however, VAT has been included in the purchase price, no transfer duty is payable;
- Rates and taxes/levies: Payable in advance to the Local Authority or in the case of a sectional title unit, payable to the Body Corporate;
- Transfer fees: Prescribed by the Regulations and calculated according to the value of the property;
- Provisions for postages and disbursements;
- VAT: On services rendered and
- Deeds Office Registration fees: Payable per registration.

The statement of account regarding the bond registration usually consists of the following:

- Fees of the financial institution: This can include inspection fees, initiation costs, administration costs and other costs;
- Bond fees: Prescribed by the Regulations, payable to the conveyancer and calculated on the amount of the bond to be registered;
- VAT: On services rendered;
- Provisions for postages and disbursements and
- Deeds Office Registration fee: Payable per registration.

FINANCIAL ARRANGEMENTS

The conveyancer is responsible to attend to a variety of financial arrangements during the registration process for example:

- Collection of all costs as payable per statement of account;
- Payment of transfer duty to the Receiver of Revenue and the obtaining of a transfer duty receipt;
- Payment of rates and taxes/levies and obtaining a clearance certificate from the Local Authority or a levy certificate from the Body Corporate. (It is prescribed by law that no account for rates and taxes/levies payable by the existing owner shall be in arrears on the date of transfer);
- Guarantees are requested from the purchaser’s financial institution for the available amount of the loan, for the payment of the outstanding amount of the purchase price. (A guarantee is an undertaking by a financial institution to pay the amount as set out therein on date of registration);
- Arranging for the cancellation of the existing bond of the seller through the issuing of guarantees for the amount outstanding on the bond and
- Arranging payment of the balance purchase price.
The full amount of the purchase price must be available, (except where the deed of sale states otherwise) either by means of a guarantee or a cash deposit before registration.

In accordance with the deed of sale, you may request that all cash
deposits made by yourself to VAN DER MERWE DU TOIT
INCORPORATED be invested in an interest bearing savings account in
your favour, for payment on date of registration.

THE DEEDS OFFICE

Conveyancers attending to the various aspects of the transaction liaise with each other on a continuous basis to arrange simultaneous lodgement and registration of all the documents at the Deeds Office. The Deeds Office is a Government Registration Office and keeps record of all real estate transactions and rights regarding such properties.

There are offices in Pretoria, Johannesburg, Bloemfontein, Cape Town, Kimberley, Pietermaritzburg, Nelspruit and Vryburg.

Each set of lodged documents is examined by Deeds Office officials to ensure that it complies with all relevant acts and regulations. Afterwards it is made available to the various conveyancers for registration in the presence of the Registrar of Deeds. The linked set of
documentation is registered simultaneously.

REGISTRATION

Registration renders the purchaser the registered owner of the property and his real rights are thus protected against third parties. All financial arrangements are usually finalized within 24 hours after registration. This entails the payment of guarantees by the purchaser’s financial institution, payment of the amount of the cancellation figure to the existing bondholder, payment of the balance purchase price to the seller and the setting of accounts with all parties.

HOW LONG DOES THIS PROCESS TAKE?

It is difficult to predict the exact duration of a transaction, the reasons being:

a. The deed of sale may be subject to suspensive conditions eg:
- the sale and conclusion of registration of the purchaser’s property within a certain time period and
- the obtaining of a loan within a specified time period, before which the transaction does not proceed.

b. Government Offices and other institutions require certain time periods to deliver documentation or issue certificates necessary in the process e.g.:
- clearance certificates from the Local Authority or the Body Corporate (6-10 days);
- transfer duty receipts from the Receiver of Revenue (2-5 days);
- guarantees from the Financial Institutions (7-21 days);
- consents to cancellation from the existing bondholders (7- 14 days) and
- Deeds Office for registration (8-15 days).

Unforeseeable problems: the fact that so many institutions are involved in the registration process adds to unexpected delays (for example postal delays or unusual conditions of title which may prevent timeous finalization of the transaction).

All the above time periods may vary, but as a rule the usual duration of the registration process is 24 to 35 days after the confirmation of all financial arrangements.

To this end, we have put together a selection of questions frequently asked by non-residents that we trust will assist in clarifying these issues. In order to obtain a comprehensive idea of the processes involved in buying and selling property in South Africa, this brochure should be read in conjunction with our brochures Buying Property in South Africa and The Complete Guide to Buying and Selling Property in South Africa.

? Are there any restrictions on non-residents buying property in South Africa?

The answer to this is a resounding NO, save for a prohibition on illegal aliens owning immovable prop¬erty in South Africa. Non-residents will of course be subject to the same laws and regulations as South Africans and it is compliance with these that ensure the efficiency of the S.A. land registration system and security of tenure.

Should the non-resident not wish to purchase the property in his or her own name but rather in the name of an entity, such an entity must be locally registered and meet the requirements inherent in

registration of the chosen entity, such as those con-tained in the Companies Act. For example, the non-resident may decide to own the property through share ownership in a company, membership in a close corporation (unique to South Africa) or as a beneficiary in a trust. In the event of a non-resident acquiring property in the name of an entity, funds brought into the country will represent a loan to the local entity and will require Exchange Control approval.

For the most part however, property is registered in the name of the purchaser as an individual. There may be specific reasons for taking transfer in the name of an entity and for a brief overview of these, kindly consult our Purchaser’s Guide to Alternate Entities for Acquiring Ownership Of Immovable Property.

Note that purchasers, will have to finalise their choice of vehicle for purchasing the property prior to signing any Offer to Purchase or Agreement of Sale, as no changes can be made at a later date without the possibility of penalties being imposed and result¬ant delays in the transaction.

Finally, a non-resident can purchase South African property over the internet without entering the coun-try. However, should the prospective purchaser intend residing in the property for any length of time, he or she will need to comply with the requirements of the Immigration Act and either have a valid permit to temporarily remain in the country or be in posses-sion of a permanent residency permit.

? How can foreign funds be brought into SA for a property acquisition?

Foreign funds can be paid into any nominated bank account in South Africa. This account will usually be the trust account of the estate agent or transferring attorneys into which the deposit for the property and the balance of the purchase price is paid. These funds will be invested for the non-resident’s benefit and the non-resident can rest assured that such a transfer is secure and guaranteed, as the operation of these trust accounts is regulated by the profes-sional boards overseeing the operations of both attorneys and estate agents.

When a non-resident transfers funds from a foreign source into a South African bank account, a record known as a “deal receipt� is kept of the foreign funds received by the South African bank. This is an impor¬tant document which must be retained for purposes of repatriation of the funds.

? Can money be borrowed in SA to purchase property?

? Can a non-resident open a bank account at a South African banking institution?

In order for a non-resident to service repayments on a mortgage bond, he or she will need to open a non-resident banking account which can either be done from abroad or from within the country. Again, certain documentation relating to the applicant’s identity will be required, ie. application form detailing name, passport number and address, certified copies of the relevant pages of the passport, and proof of source of income, such as a salary slip or pension state¬ment. All copies will have to be originally certified. Once the bank account has been opened, foreign funds will have to be deposited immediately.

In certain circumstances, local currency can be deposited into the account, for example, rental

income acquired from property belonging to the non¬resident. This is dependent on the bank being in pos¬session of a certified copy of the rental agreement. Obviously the rand value received on the sale of immovable property in South Africa can also be receipted into the non-resident account provided the necessary documentation is lodged prior to the deposit being made.

? Who chooses which attorneys will attend to the transfer and whose interests are the attorneys protecting?

It is customary in South Africa for the seller of immov¬able property to nominate the attorneys who will attend to the transfer. Such attorneys then act for the seller and on his or her instructions. Consequently, in the event of a dispute between the seller and pur¬chaser, the purchaser would have to seek independ¬ent legal advice. Note that whilst the seller selects the attorneys, the purchaser pays the transfer costs.

? Can transfer and bond documents be signed overseas and if so, what is the procedure?

Yes. However, there are certain formalities that must be complied with. Documents can either be signed before a Notary Public or at the South African Embassy in that country, but this can be costly and time consuming. If a seller or purchaser is in South Africa at the time of the transaction but returning overseas shortly thereafter, it is advisable if at all possible to sign a special or general power of attor-ney in favour of a local friend or family member who will then be able to act on their behalf.

? Other than the purchase price, are there any other costs for which the purchaser will be liable?

Yes. The purchaser is usually liable for the following costs:

? transfer duty, which is a tax levied on property and based on the purchase price, (this is not payable if the seller is VAT registered);

? transfer fees;

? Deeds Office levies, pro-rata rates and taxes/ sectional title levies;

? the cost of obtaining a rates/levy clearance certificate.

Most of these costs are determined according to the purchase price of the property.

Further costs, including the attorney’s fees and bank charges such as the initiation and valuation fee, will be incurred if the purchaser registers a mortgage bond.

Once the purchaser takes transfer of the property or assumes the risk therein, he or she will be liable for all costs and associated risks. If the property is not bonded, it is in the purchaser’s best interests to obtain insurance. This is compulsory if the property is bonded and is normally arranged by the bank concerned.

? On sale of the property, can the money be taken out the country?

Understandably, this is without doubt the number one concern of non-residents considering investing in South Africa. The answer to this question is simply, yes. Money from a foreign source together with any profit, proportionate to that non-residents share holding in the property, may be repatriated in due course in terms of S.A. Exchange Control Regulations. If the non-resident owns property together with a S.A. resident, only his portion may be repatriated.

On transfer of the property to the non-resident purchaser, the title deed will be endorsed “non-resident� and /or a deal receipt retained by the banking institution when the foreign funds were originally introduced into the country. This facilitates the repatriation of the funds and profit on sale of the property, provided the bankers are satisfied that such profit is reasonable and market related. Obviously if the purchase was partially financed by funds borrowed in South Africa, that portion of the purchase price cannot be repatriated unless the bond has been settled in full.

Furthermore, if a foreigner takes up permanent residency in South Africa and signs a Declaration and Undertaking at a South African bank (namely declaring whether they are in possession of foreign funds and undertaking not to place same at the disposal of anyone resident in the Republic), they will be considered a resident for Exchange Control purposes and accordingly will only able to repatriate funds within five years of their immigration. Thereafter they will be considered to be a South African citizen and subject to the same regulations and limitations.

Finally, the repatriation of funds will be subject to capital gains tax and this will be discussed more fully in due course.

? Is a non-resident, liable for payment of any South African income tax?

While South Africans are taxed on their worldwide income, non-residents are liable for income tax only on income accruing from a South African source. For example, if the property is rented, the rental income will be subject to South African income tax.

On disposal of the property, the non-resident will be liable for payment of capital gains tax. For property registered in the name of an individual, 25% of the profit will be taxed at the individual’s marginal income tax rate. The maximum marginal rate is currently 40%, which translates to a maximum flat rate payable of 10% of the capital gain.

Until recently, non-resident sellers were obliged to register as taxpayers in the year of disposal of their immovable property in South Africa. However, this was not being done and the SARS were not able to collect tax that was due and payable. Accordingly, measures have been introduced which will tighten the tax collection net considerably. In terms of new proposals to the capital gains tax legislation, an obligation will be imposed on any purchaser of property from a non-resident for a price exceeding R2 million

to retain a percentage of the purchase price and to pay it over to SARS within 10 days of the date of transfer of the property. The amounts that will have to be retained are:

? 5% if the seller is a non-resident individual

? 7.5% if the seller is a non-resident company

? 10% if the seller is a non-resident trust.

This payment will form an advance collection against the non-resident’s income tax liability for the year of assessment in which the property is sold.

Finally, it is important to note that a non-resident who has not permanently immigrated to South Africa will be considered a resident for income tax purposes if he or she spends more than a certain length of time within the country. This is known as the “physical presence test� and is calculated in terms of days spent in the country over a three year period.

No tax is levied on foreign pensions.

What about estate duty in the

?

event of death?

Estate duty is presently calculated at 20% of the dutiable amount of an estate. However any inheri-tance bequeathed to a surviving spouse is not sub-ject to estate duty. Non-residents, like South Africans, are entitled to a rebate of R2.5 million on their dutiable assets; however, unlike South Africans, this rebate is limited to assets situated in South Africa.

We trust that the aforegoing has addressed at least some of the questions and concerns that non-resi-dents interested in purchasing property in South Africa might have. However, should you wish to dis¬cuss any of these or other issues further, we urge you to contact one of our conveyancing attorneys on our 24 hour hotline service.

Disclaimer: The material contained in this article is provided for general information purposes only and does not constitute legal or other professional advice.

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 The identities of the parties must be ascertainable.

• The seller need not be the owner; he may not yet have taken transfer of the property, but may be allowed to resell it. This must however be disclosed in the contract, as well as who the owner is, and that transfer of the property cannot be passed to the purchaser before the seller has obtained transfer himself.
• If a party does not have the contractual capacity to conclude a contract, his name must still be cited, together with the identity of the person assisting him (i.e. the guardian of a minor).
• If a contract is entered into on behalf of a company or close corporation (cc), the name of the company or cc must be cited, together with the name of the person authorised to conclude the contract.
• If a contract is entered into on behalf of a partnership, the names of the partners must be cited.
• It is always a good idea to include contact numbers, i.e. Tel, Fax, Cell & Email.
  
  

Description of Property

• The best description of the property is the one contained in its title deed. If you do not have the title deed available, use your water and electricity bill to locate the erf number and quote it together with the physical address of the property.
• Sale and Purchase of What? When you buy a house, you in fact buy the land on which the house is situated. The house, being a permanent improvement, forms part of the land. All surface and subsurface soil, water, trees and plants on the land are by law included in the purchase. Also included are all the permanent improvements (like a house or other buildings, a borehole or a swimming pool) and all movable items, which have been permanently affixed to a house or other buildings (called permanent fixtures).
• All movable accessories which are of permanent service to the immovable property and which are necessary for its effective use of exploitation are also included in Occupation and Occupational Interest
  
  

Purchaser's Cooling Off Right

Legally the Cooling Off Right does NOT apply if:

•  
  • The property is intended to be used for anything other than a residential property;
  • It is agricultural land;
  • The purchase price of the property exceeds R250 000.00 (i.e. from R250 001.00 and more);
  • The purchaser is not a natural person (i.e. a trust, company, close corporation, etc.);
  • The property is purchased at a publicly advertised auction;
  • The seller and purchaser concerned have previously entered into a sale agreement of the property on substantially the same terms;
• The purchaser has nominated or appointed another person to take over his rights and obligations in terms of the offer or sale agreement in question;
• The purchaser bought the property by the exercise of an option which was open for a period of at least five working days.
• An agreement is null and void if there is no Cooling Off Right in the agreement, providing that all the abovementioned points do not apply.
• No person will be entitled to any remuneration payable if the purchaser exercises his Cooling Off Right.
• The buyer cannot waive (give up) his Cooling Off Right

Occupational Interest

Occupational Interest is more commonly known as Occupational Rent. The occupational interest can either be a fixed amount (usually it is calculated as either the amount of the seller's bond repayment on the property or 1% of the purchase price) or an amount subject to an escalation if registration of transfer has not taken place within a certain period (this may apply when the occupational interest amount is less than the seller's bond repayments). If there is uncertainty about the occupation date, it is best to record in writing the latest date upon which the purchaser is willing to take occupation of the property.

Purchase Price and Guarantees,  Defects and the"Voetstoots" clause

 BE AWARE of certain defect clauses. In certain instances, the buyer is protected against severe defects discovered after the transfer on a property has gone through. The law will attempt to determine whether the defect is patent or latent, and on these grounds, make a ruling as to who is responsible for the cost of repair.

A patent defect is clearly visible upon inspection, like a crack in a wall or window, and it should be stated in the offer to purchase who will be responsible for fixing (or replacing) the defect.

A latent defect is not so easily picked up on superficial inspection, for example a faulty geyser, a damp area concealed behind furniture or fresh paint or a leaking roof.

The seller is responsible for all latent defects in the property for three years from the date of discovery of the defect by the buyer. The seller should supply all warranties and documentation of repairs and maintenance on transfer of the property. At the same token, the buyer must ensure that he is aware of all patent flaws.

As a result of the seller's responsibility for latent defects, sellers will usually stipulate that the property is for sale 'as is' ('Voetstoots'). The seller is still responsible for any deliberately concealed latent flaw or defect.

The burden of proving that the seller knows or ought to have known about the latent defect rests on the buyer. Depending on the circumstances, (and if the buyer can prove that the seller knows or ought to have known about the defect), the buyer can cancel the contract and/or claim repayment of a portion of the purchase price when a latent defect is present. All faults that have been detected should be recorded in the offer to purchase document along with details regarding which party will be responsible for their repair.

The purchaser can insist on certain guarantees. For example, under the clause section 'Special Conditions', the buyer can stipulate that, "The Seller hereby warrants that the swimming pool on the Property sold is not leaking at the date of signature hereof by him".

To protect yourself, as the purchaser it may be worth having a property inspection company inspect the property. The cost of the inspection will be for the purchasers account.

Risk, Rates, Rental Income and Ownership

The seller is responsible for any loss or damage caused by him (or his children or employees and so on) before the purchaser takes transfer. The agreement can be altered to state that the buyer is responsible for any loss or damage of any kind whatsoever from the date that the buyer takes occupation of the property.

In the case of accidental damage or damage due to 'acts of God' the buyer carries the risk from the date of conclusion of a contract, provided the contract is not subject to suspensive conditions, in which case the risk remains with the seller. If the conditions are fulfilled, the risk is deemed to have passed to the buyer.

Usually from the date of transfer the buyer will have all benefits attached to the property and all the risk of the property will pass to the buyer. The buyer will be liable for all rates and taxes and/or levies payable on the property from date of transfer and the buyer will have to refund to the seller, any amounts paid upfront in respect of the rates and taxes and/or levies on the property. The buyer will have the benefits of any rental income on the property, (if the property is let to a third party at the time of purchase), only once transfer takes place, although this can be regulated contractually between the parties. Ownership of the property takes place on transfer and not on occupation.

Registration and Transfer Fees

The purchaser will be liable for payment of transfer duty and all costs and fees in connection with the registration of the bond and transfer of the property on demand by the conveyancing attorney.

The Seller will be liable for the payment of estate agents' commission on demand by the conveyancing attorney, once the registration and transfer has taken place.

Domicilia Citandi Et Executandi

Domicilia Citandi Et Executandi, also referred to as Domicilium, is the physical address you give for any legal documents and notices to be served to you. 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. This may not be a PO Box or Private Bag address.

Breach of Contract

A breach of contract exists when one or all of the parties to the contract do not comply with what was agreed upon in the offer to purchase.

Examples of circumstances are:

• If the buyer does not pay his deposit to the sellers attorneys in time as agreed upon in the offer to purchase;
• If the buyer does not present the necessary guarantees from his bank in time as agreed upon;
• If the buyer does not make any effort to get finance for the property, and this was agreed upon in the offer to purchase, to do so;
• If either the buyer or seller fails to sign the necessary documents for purposes of transfer.

You must be sure of your obligations in terms of the agreement. In certain cases the seller could end up being entitled to as much as the whole sale price if the buyer is in breach of certain elements of the contract.

We strongly recommend that you seek the assistance of an attorney to go through the contract for you and explain to you exactly what your obligations are as buyer and as seller

	Praedial servitude , which is when a person has a right of use because of the fact that he is the owner of a certain property. Should he sell the property the servitude will move over to the new owner.
	Personal servitude is a right in favour of a specific individual so when that individual moves on, the servitude falls away. It does not pass on to the new owner if the property is sold.

You do not need to get permission from the person that has a right of a servitude over your property if you want to sell it, however the new owner will have to comply with the servitude.

Servitudes are very common mainly with farms and smallholdings.

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• Check that the description of the property is correct (as described in the title deed).
• Are all the buyers' & seller's details documented clearly?
• Check that the purchase price is written correctly.
• Are you happy with the occupation date and occupational rent amount?
• Make sure you are aware of any special conditions and the time period in which these conditions need to be fulfilled, i.e. that the agreement is subject to a grant of the buyer's bond, or the sale of his other property.
• There may be movable items that can stay with the property. Are they all listed and are the movable items which are not included in the sale, listed?
• Check that the estate agent's commission is correct (as agreed upon).

What happens if you make a mistake on the contract?

If a mistake is made in a contract for example, the date is written incorrectly, it does NOT render the contract invalid. Such an error can be rectified. Rectification is the correction of the written record and does not allow for any additional terms to be included in the contract. Therefore omitted words may be added, extra words may be deleted and incorrect words may be replaced by means of rectification so that the mistake may yield to the truth of the matter.

It is always in the best interest of all parties to the agreement, to initial next to the rectification, in order to eliminate future disputes about the mistake.

Completing a Standard Pre-Printed Offer to Purchase Document and Drafting Clauses.

• All blank spaces must be completed fully or deleted completely.
• The words "to be agreed upon" may not be used in blank spaces.
•   Clear, plain language must be used to complete blank spaces or add clauses. It might be a good idea to draft a clause on a separate piece of paper first before writing it in the agreement.
• Irrelevant clauses must be deleted completely.
• Amendments to clauses must be clearly worded.
• All deletions and amendments must be initialled by all parties involved.
• There is usually space to add clauses, in a section called 'Special Conditions'. If this space is insufficient, additional clauses can be included on a separate document, but then the 'Special Conditions' clause must refer to the separate document, for example "See Annexure A initialled by the parties and attached hereto." The separate document must then be entitled "Annexure A", and must refer to the main contract.

An example of an amendment on a document separate from the main contract:

ANNEXURE A

This is an addendum to the Agreement of Sale concluded

between ____________ (seller) and ____________ (purchaser)

in respect of __________________ (description of property) to

which this document is attached.

The parties agree on the following additional terms:

1. _________________________________________________

2. _________________________________________________

3. _________________________________________________

Signed at _______________ (place) on _____________ (Date).

Seller: _________________ Witness: ________________

Purchaser: _________________ Witness: ________________

A contract can be amended after all the parties have signed it, as long as the amendment is in writing, signed by all the parties and, in the case of a separate document, attached to the main contract.

It is not essential that the parties initial each page of the document, although it is recommended to avoid possible disputes.

It is also not essential for a witness to sign a contract for it to be valid. The witness only really acknowledges that the contract was signed by the person whose signature he witnessed. Two witnesses must attest the signature of a spouse married in community of property who consents to an agreement of sale in a document separate from the agreement of sale.