Glossary of Conveyancing terms:

Act
An Act is a form of legislation passed by the courts for the government.

Addendum
An Addendum is a supplementary agreement to an original sale contract covering points agreed to afterwards. It is a separate agreement in its own right and, if it contradicts the original in any way, it is presumed to overrule it.

Administration Fee
The bank charges a monthly Administration Fee to handle your home loan.

Agent's Commission
This is a fee charged by an estate agent for the services rendered to a seller, for selling his property. Estate agents always have to pay VAT on their commissions. Unless otherwise agreed the VAT will be added to the agreed commission. The seller pays the commission on registration and, if he is a vendor he may, in appropriate circumstances, recover the VAT paid.

Agreement of Loan
The Agreement of Loan is the contract that is drawn up by your bank and which is signed by you when a bond is approved and granted. This contract contains all relevant details pertaining to your bond, such as interest rate application, bank charges, insurance premiums and monthly instalments.

Agreement of Sale
The Agreement of Sale, also referred to as the Offer to Purchase or Deed of Sale, is a legal document signed by the buyer and seller, whereby the buyer agrees to buy a property from the seller, who agrees to sell the property to the buyer. This agreement sets out the proposed purchase price and conditions on which the sale will take place. Once signed by all parties, it is a legal and binding agreement. No matter what the parties have agreed to verbally, no contract exists until an agreement of sale is completed and signed by both parties.

 Ante Nuptial Contract
This is an agreement entered into by parties prior to getting married. The agreement will regulate the affairs of the parties both during and after the marriage. The parties will then be married out of community of property.

Articles of Association
This document forms part of the constitution of a company and contains valuable information about the company.

Assessment
An Assessment is the bank's assessed valuation of the property.

Assessment Fees
This is the amount that the bank will charge you to assess the property prior to granting you the finance that you have applied for. They are also known as inspection fees or valuation fees.

Assessor
An Assessor is the Bank's valuator of the property.

Association Agreement
An Association Agreement is an agreement concluded between the members of a close corporation, which states for example the contractual capacities of the members.

Attorney Allocation
Attorney Allocation means that the banks have specific attorneys they deal with, who are allocated to do registrations on behalf of that specific bank.

Authority Forms
Every borrower has to authorise the payment of the proceeds of a loan. When a property transfer is taking place simultaneously, different guarantees will be issued and authority forms have to be signed by the borrower before they can be furnished.

Authority to Pay
This is a mandate authorising the bank to make payment of the proceeds of a new loan once it is registered. The borrower signs at the bank's attorneys and they then issue guarantees in favour of the seller, developer or builder, payment is made in accordance with certain completion dates being met.

Cancellation
A bond is officially cancelled when the debt owing is paid in full and the bank's attorneys register the cancellation at the Deeds Office. A fee is payable to the bank's duly appointed attorneys for this service.
Cancellation Attorney
The Cancellation Attorney is appointed by the bank, which holds the current mortgage bond (home loan) over the property. This attorney attends to the cancellation of the seller's bond.

Cancellation Figures
Cancellation Figures consist of the outstanding amount on a home loan being cancelled, as well as the interest and any other costs required to settle the home loan.

Capital Gains Tax
Capital Gains Tax is basically a government charge, levied on the resale of assets. All taxpayers, including individuals, trusts, companies and corporations, are taxed on the profit they make from the sale of (or otherwise dispose of) asset of a capital nature or property.

Capital Redemption
Capital Redemption means repaying the capital amount as well as opposed to just the interest amount on the monthly bond repayments.

Cession of Insurance Policy
When banks require their borrowers to take out life assurance to cover their bonds and the borrowers choose to use existing policies to cover this requirement, they will have to sign a form ceding the policy to the bank as surety for the home loan.

Clause
A Clause in a contract is a condition which renders the operation and consequences of the contract as a whole dependent on an uncertain future event.

Clearance Certificate
This certificate is issued by your local authority or municipality (and in some cases by your Body Corporate or Home Owner's Association) to confirm that all rates, taxes and/or levies are paid up to date. Property transfer cannot take place without this certificate.

Close Corporation
A Close Corporation is a form of business entity similar to a company. Only natural people can be members of a Close Corporation and the number of members of a Close Corporation is limited to ten.

Cluster Home
A Cluster Home is a freehold property in a development of similar houses, usually with good security and limited access. Each subdivided stand in the development is exclusively bought and individually owned.

Collateral
Collateral is the amount of security provided to secure a home loan.

Common Law
Common Law is the law which applies if the parties to a contract have not reached agreement on a specific legal issue in their contract, or if legislation does not specifically deal with a matter.

Company
A Company is a trading entity that is commonly used for commercial activity.

Compliance Certificate
An Electrical Compliance Certificate is required by law for the property to be transferred to the buyer's name. This, and any electrical repairs that need to be made, is for the seller's account. The certificate is issued by a qualified electrician. You may also be required by the buyer's bank to provide a Beetle/Infestation Clearance Certificate.
  Condition
A Condition in a contract is a clause which renders the operation and consequences of the contract as a whole dependent on an uncertain future event.
A Suspensive Condition is whereby the validity of the contract is made subject to the occurrence (or non-occurrence) of a future event, e.g. the granting of a bond of a certain amount or the sale of another property before a certain date. Only if and when the condition has been fulfilled will an enforceable contract exist.
In the case where a Resolutive Condition is stipulated in a contract, the contract is immediately binding and will remain binding unless the condition is not fulfilled.

Conditions of Loan
Some banks, in addition to their bond and loan agreement conditions, require their borrowers to sign a separate document setting out all their loan grant conditions. Borrowers cannot negotiate or change these conditions.

Conditions of Title
Conditions of Title are restrictive conditions limiting an owner's rights over his/her property, which are recorded on the property's title deed. They cover matters such as building limitations, mineral right reservations, servitudes, etc.

Consolidation of Debt
Consolidation of Debt is when a customer is paying off two products bought on credit and he chooses to combine both products and pay them off as one debt, possibly taking advantage of a lower rate.

Conveyancer
A Conveyancer is an attorney (lawyer) who is qualified to attend to the registration and transfer of immovable property, and/or the cancellation of bonds.

Conveyancing Costs
These are the costs payable to the attorney appointed to attend to the transfer of the property from the seller's name into the buyer's name.

Cooling-off Right
The Cooling-off Right is a statutory right, recorded in Section 29A of the Alienation of Land Act, giving a buyer of a residential property costing R 250 000.00 or less the right to withdraw from the sale within five days of signing an offer to purchase.

Costs (or Cover) Clause
A Cost (or Cover) Clause is an additional amount that is added to the capital amount loaned for a mortgage to cover any additional costs such as legal fees, penalties, interest, repossession costs, fire premiums, and so on. These provisions are made in the Mortgage Loan Document.

Cost Declaration
Estate agencies occasionally get their sellers and buyers to sign addendums providing for the transfer costs to come off the proceeds of the loan without the banks knowing. Banks often require their attorneys to sign declarations disclosing such addendums.

Credit Record
Your Credit Record is your previous payment history.

Creditor
A Creditor is someone to whom you owe money.
Damp Proofing Certificate
A Damp Proofing Certificate is a clearance report on the work carried out by a specialist damp proofing contractor, stating that the problem has been rectified and that it will not occur again within a specified time.
Debit Order
A Debit Order is the required method of home loan instalment repayments. The buyer gives the bank permission/instruction to debit your account to pay your monthly instalments. This also applies to any insurance premiums that may be due and which are normally debited once annually.

Debtor
A Debtor is someone who owes you money.

Deed
A Deed is a legal term for a formal legal document that is signed, witnessed and delivered to affect a conveyance or transfer of property or to create a legal obligation or contract.

Deed of Sale
The Deed of Sale, also referred to as the Offer to Purchase or Agreement of Sale, is a legal document signed by the buyer and seller, whereby the buyer agrees to buy a property from the seller, who agrees to sell the property to the buyer. This agreement sets out the proposed purchase price and conditions on which the sale will take place. Once signed by all parties, it is a legal and binding agreement.

Deeds Office
The Deeds Office is a government department responsible for the registratio