Bugle Sales Talk Editorial

Author: Andreas Wassenaar
Date: 2015-09-11

As property professionals we often take for granted some of the basics that go with a property transaction and it is often useful to highlight some of the essential elements of a property transaction to assist buyers and sellers to understand the process a little better. A recent query we had related to a vat transaction where the property being purchased was a first time sale from a development company and was therefore subject to vat rather than transfer duty.

In a case like this no transfer duty is payable but the transfer fees to the conveyancing attorney and the fees payable to the deeds office are still very much part of what the buyer will be asked to pay. The transfer duty or tax on the transaction is not payable only because the government is collecting the vat on the transaction, but all the other transaction fees are still payable.

An aspect of a transaction which seller's typically have to be aware of is the responsibility around the range of certificates that have to be produced and paid for. A useful newsletter recently circulated by leading KZN Conveyancer Annabelle da Costa highlighted aspects of these certificates. We will look at five of those that parties to a property transaction along the North Coast should be aware of:

1. Entomologist Certificate, which certifies the absence of the infestation of woodborer and wood destroying insects. Did you know that this is not a legal requirement and is not lodged in the deeds office? It has however become custom and part of our typical sale agreements that the seller produce this certificate, which is given to the Purchaser, the bondholder and conveyancer. These certificates are only valid for 3 months.

2. Electrical Compliance Certificate, which is required by Law (Occupational Health and Safety Act of 1993) and provides evidence that the electrical installation is safe and adheres to the legal requirements. These certificates are not lodged in the deeds office but bondholders will typically call for this certificate before they permit registration of transfer. So what about a situation where a purchaser takes occupation prior to transfer and just prior to an electrical inspection being done, completely guts the property as part of a major renovation? The seller will want transfer to occur prior to the completion of the renovation which could take up to six months to complete. In this instance the conveyancer is not required to obtain an electrical compliance prior to transfer and undertakes to obtain the compliance certificate after transfer on completion of the renovation. Electrical Compliance Certificates are valid for two years, unless there has been tampering with the electrical installation.

3. Gas Compliance Certificate, which is also a legal requirement and a responsibility of the seller to obtain and pay for. This is a more recent requirement and we find that many of the older homes have gas installations either for gas braai's or gas hobs, which are not compliant and require some building work to be able to make them compliant. A typical problem found is where the gas cylinders are located too close to air-conditioning units.

4. Electric Fence Installation Compliance Certificate - a requirement for a freehold home if the fence is on the property but not for an individual sectional title unit or property within a home owner's association.

5. NHBRC Certificate - If the home is less than 5 years old, then in terms of the Housing Consumer Protection Measures Act, the conveyancers attending to the mortgage bond registration aspect are required to ensure that a valid NHBRC certificate is in place, in an attempt to protect homeowners against builders' defective workmanship.

For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.

Andreas Wassenaar

Principal - Seeff Dolphin Coast

Cell: 082 837 9094

andreasw@seeff.com

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