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Get your financial and legal ducks in a row before you sell

One of the documents that must be lodged at the deed's office to transfer a property from a seller to a buyer is the clearance certificate. This is obtained from  the Council. This is proof that no money is owed to  the Council for rates and services.  Although the seller is only responsible for payment of these up to date of transfer,  the Council requires an upfront payment for a few months - any overpaid amounts are refunded to the seller after transfer. (It usually takes months and a lot of effort to get them to refund you, but they do - eventually!)  Be proactive and avoid excessive clearance figures which may leave you out of pocket.

Take a thorough look at your municipal account or accounts, if you get more than one. Are you being billed for everything? If you are a full title owner, you should be billed for property rates, refuse removal, sewerage, electricity (unless you have a prepaid meter), and water. If you are a sectional title owner, the Council should charge you for property rates and refuse removal. (Electricity, water and sewerage form part of the levy  account.)  Often one is under the impression that one's municipal account is up to date, but one of the above items has never been charged on the account. When the clearance figures are then issued, they are much higher than expected.

Also, make sure that you are billed for actual consumption for water and electricity, based on readings. If they did not or could not do readings and billed you for estimates, they often have to send someone to do actual readings - which can take weeks, and may lead to a hefty clearance figure!

Any of the above issues, as well as any other disputes with the Council about the account, must preferably be resolved before the first buyer set foot on you property.

Ensure that you have approved building plans available. One can get a copy of the approved building plans from the Council (6th floor, Civic Centre, across the road from the Civic Theatre). You may have bought the property as is, only to  discover now that an outbuilding or extension was never approved by the Council. Chances are good that the bank who is granting the buyer's bond, will ask for copies of approved building plans. If you do not have this available, it may cause an unexpected delay of transfer. If you know, or become aware of an "illegal" section, have an as-built plan approved.  It may even be necessary to remove restrictive conditions in the title deed, or to apply for relaxation of building lines before you can submit the as-built plans for approval.  Give us a call if you discover that you need to address this - we can refer you to professionals who will be able to assist.

Notify your bondholder of your intention to sell and ask  if there will be any penalty payable if your bond is cancelled within the next few months. Ask them what you can do  to avoid paying  a penalty. You may have to postpone marketing for a few months.

Is your income tax up to date? This is a question you should also ask the agent you appoint to market the property. If any of the parties in the sale - the seller, the purchaser or the estate agent - owe SARS any money, it may be a problem to get the transfer duty receipt from SARS. They may insist on payment of any outstanding taxes before it is issued.

If you own a unit in a sectional title complex, ask the managing agent or trustees for a copy of the most recent financials.  It is shocking that financials are often not available. Now is the time to kick up a row and to get them to finalise the financials and to have it audited. Not only  is the potential buyer likely to ask for it before he makes the buying decision - the bank may also not grant the bond if the financials are not available.

Sectional title owners should also make sure that their levy accounts are up to date, and should there be a dispute about any charges, resolve the matter  as soon as possible. Any special levies being raised  at this stage, or for a period after transfer to cover expenses incurred before transfer, will still be for your account. Get clarity about this if in doubt.

Although not essential, it is not a bad idea to organise the electrical compliance certificate before marketing starts. Not only will the agent be able to vouch for the electrical installation, but the COC is also  a document which must be available before the transferring attorney can lodge. Often the bond registration attorney will require this before guarantees are issued.

If you entered into a contract with the security company  - or any other service provider such as  a solar heating company  - in exchange for installation of the goods, it is essential to take a look at the agreement with them. Will you be able to tell the buyer that the alarm system or solar geyser is a fixture, or will they have to take over the monthly payment if they want to keep the goods? If you disclose this beforehand, it is highly unlikely to cause a problem.

Not essential, but perhaps a good idea, is to arrange  a professional home inspection. You will then be in a position to make the necessary repairs, or to disclose problems to the buyer. Remember that the  voetstoots clause does not mean that you may hide problems from the buyer of which you should be aware.

Once you know that none of these matters will cause a delay with regards to the bond grant or transfer, it is time to put out the fresh flowers and fill  your home with the smell of fresh coffee - you are ready for your buyer!

 


Published in: November news

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