You will only become the owner of the property when the Registrar of Deeds signs the transfer. After it has been signed, a copy of the title deed is kept at the Deeds Office closest to you.

A Title Deed is documentary proof of ownership in terms of the Deeds Registries Act 47 of 1937. Each property has its own separate Title Deed. It is an important document containing all the details pertaining to a particular property.

These details are:

• The name of the existing owner as well as the previous owners.
• A detailed property description which includes size.
• The purchase price of the property paid by the existing owner.
• Conditions applicable to the zoning, use and sale of the land.
• All real rights registered in respect of the property.

The owner will normally have the Title Deed or a copy thereof in his possession. Before signing an offer to purchase carefully scrutinize the Title Deed.

What is The Deeds Office and The Deeds Registry?

There are numerous Deeds Offices throughout South Africa. Each Deeds Office holds a Deeds Registry, containing filed Title Deeds of all the properties in its particular jurisdiction. All the Deeds Registries are linked to a computer network. Your estate agent can, via a computer-linked facility from his office, examine any Title Deed (registered from 1980) in the country’s combined Deeds Registry.

What’s the Difference Between a Property Deed and a Title?           

Title is the legal way of saying you own a right to something. For real estate purposes, title refers to ownership of the property, meaning that you have the rights to use that property. It may be a partial interest in the property or it may be the full. However, because you have title, you can access the land and potentially modify it as you see fit. Title also means that you can transfer that interest or portion that you own to others. However, you can never legally transfer more than you own. Deeds, on the other hand, are actually the legal documents that transfer title from one person to another. Sometimes the Deed is referred to as the vehicle of the property interest transfer.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

References                           

https://www.westerncape.gov.za/service/title-deeds-proof-property-ownership                  https://www.rocketlawyer.com/article/whats-the-difference-between-a-roperty-deed-and-a-title-ps.rl  http://www.conveyancing24.co.za/

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rental cost and duration of the lease (including specific dates) must clearly be stated in the lease agreement to avoid any confusion regarding this matter. The lease agreement should also clearly indicate how and when any increases in rent will take place. If the landlord doesn’t provide you with this information, ask him/her to give it to you in writing so you can keep it on record.

The lease should also clearly explain any deposits (e.g. the rental deposit) that have to be paid, as well as the terms and conditions regarding the refund of deposits. All other variable usage expenses (like water or electricity) that the tenant will have to pay should also be clearly stated.

Some rental properties include utilities within the monthly rental cost, while others don’t. Some properties might offer on-site gym memberships, for example, which could save you money. Before you sign the lease to a property, ask your landlord what is included in the rental rate. Get information regarding changes to the property

Once the landlord has agreed to rent out his property to you, make sure that you document any pre-existing damages to the property and its amenities before you sign the lease. Ask whether these damages can be fixed at the landlord’s expense.

Both the landlord and the tenant are responsible for the maintenance of the property. The responsibilities of both parties should be clearly stated in the lease agreement. The lease agreement should also indicate how the tenant must report any problems that require repair.

Make sure which amendments can be made to the property. Rather know the rules and stick to them, instead of making an alteration and then finding out afterwards that your landlord is unhappy with it. Just imagine your landlord’s disgust after finding out that you’ve repainted his freshly white-painted walls red!

Conclusion

Tenants should be sure to understand the contents contained in the lease agreement and that they understand all the clauses, terms and conditions to avoid any surprises later. While renting a property isn’t as much of a financial commitment as buying a home is, tenants should remember that a lease is nevertheless a legally binding document, meaning that they should make sure that they agree with everything contained therein before they sign it.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Whenever you buy or sell a house you will encounter the sale agreement

The agreement, or contract, is an offer by the interested buyer to the owner of a property. The buyer presents the offer to the owner, and if the owner accepts it, will sign the sale agreement in acceptance. This forms a binding contract.

What are the requirements for a sale agreement?

• The contract has to be in writing. You can’t get away with making a verbal agreement or contract.
• The agreement must be signed by both the buyer and the seller. If you are married in community of property, then you and your spouse have to sign the contract.
• All promises that either party makes should be included in the contract, in writing.
• If the buyer and seller have verbally agreed on changing something in the contract, it won’t be valid unless it’s put in written form and signed by both parties.

For assistance drafting a contract, contact us.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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There is no doubt that 2018 was a very challenging year for both the economy and the property market. As 2019 is in full swing, you can’t help but wonder what challenges this year will hold for both the economy and the property market. In 2018, it was mainly business as usual, however, it is important to note that the demand for properties between the 3-million and 5-million mark decreased through the year. Reasons for this could have been the weak economy, political uncertainty and land ownership concerns.

So, what will the market have in store for home buyers/sellers in 2019?

It is argued that the market will most likely remain flat during the first few months of 2019. The reason being that we are heading towards the May elections, and this could be a turbulent period in 2019. In terms of the economy, there is a feeling of positivity in the air as the economy is expected to start lifting in the middle of 2019. The feeling of positivity can be attributed to the fact that the rating agencies have kept a stable outlook and President Ramaphosa has shown his commitment to eradicating corruption within the government.

It’s important to note that the final quarter of 2018 also had an impact on the economy and the property market for 2019. The festive season has come and gone, and as can be expected, many consumers found themselves indulging in the festivities and overspending. This has impacted many South African households’ finances, as there is now an increased pressure to meet monthly commitments in terms of housing bonds and rents. This should only have an impact on the economy and the property market in the early part of 2019.

It is also expected that the interest rate will go up with 2% over the next 18 to 24 months. This will, without a doubt, put even more pressure on household finances, in terms of higher bond and credit repayments, as well as cost hikes. This will have a huge impact on affordability.

If you are planning on buying or selling property in 2019, it’s important to keep price expectations realistic. Buyers should also strike while the iron is hot and not wait for too long, as all economies and property markets are subject to ups and downs. In conclusion, 2019 is the perfect year to buy property. Ensure that you do your research and make well-informed decisions when it comes to the property you want to buy, as well as the purchase price of the said property.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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“I’ve been struggling to pay off my debt and to manage my finances. As a result, I am now under debt review. Can I still rent a property even though I am under debt review?”

The answer, in short, is yes. The process of debt review is considered to be a saving grace for those who are struggling to pay off their debt and manage their finances. Even though debt review helps you with your financial management, it is common to also feel limited by the debt review. Whilst under debt review, you can’t take out new loans, as debt review is designed to help you settle your current debt. You may, however, have additional financial concerns when under debt review, for example, the question of whether you can rent a property while under review.

Debt review is not a credit agreement itself, which means that if you are under the debt review process, you can still rent a property. In addition, there are absolutely no legal requirements that state that an individual who is undergoing a debt review, cannot rent a property or be party to a lease agreement.

It is important to remember that when you apply for a rental, real estate agents, as well as landlords, will run a full background check on your financial situation, which includes credit agreements, judgements, defaults and whether you are currently under debt review. Take note that if you are deemed unfit for the rental, it will be a result of some other factor, as real estate agents are not permitted to deny your application solely on the fact that you are under debt review.

How can you increase your chances of securing a lease agreement while you are under debt review? It is common for real estate agents and landlords to still have some concerns with regards to your debt review status. To settle these concerns, your debt counsellor may provide the real estate agent or landlord with a proof of budget that indicates that you are in fact able to afford the rental amount every month. You may also provide the real estate agent or landlord with bank statements that indicate that you can afford the rental amount. You can also offer a double deposit, or another person to co-sign the lease with you.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Regardless of whether the property you are renting out is a studio apartment, a cottage at the back of the garden or an entire estate, the same rules apply and need to be understood in order to make a success of your investment in the property. To invest in a property is a very big commitment and you don’t want to end up in a situation where you lose on the investment because you didn’t follow all the necessary steps to prevent this from happening.

1. Handle your tenants constructively

Establish a fair system of setting, collecting, holding, and returning deposits. Inspect and document the condition of your property before the tenant moves in to avoid conflict regarding the refund of deposits. This inspection should preferably be done with the tenant being present.

Try to resolve disputes with your tenants without the involvement of lawyers and lawsuits. If you’re having an argument with a tenant that doesn’t immediately call for an eviction, meet with them and try to resolve the problem in person.

2. Keep your tenants happy

Keep up to date on maintenance and repairs needed to the property and make sure these are done when the tenants request any work to be done. If your property is not kept in good condition, good tenants will not want to stay on. Remember, your tenants are your customers, make sure they are happy.

Although it is recommended to inspect your property from time to time to check that the condition of your property is up to standard, you must remember that your tenants’ privacy must be respected at the same time. Notify them if you’re planning to inspect the property and make sure to let them know a while in advance.

3. Make sure the property is safe

Don’t let your tenants and property be easy targets for criminals. If the property needs security additions, take the necessary steps to protect it. Proper lighting, trimming tree branches that hang over the wall and efficient security gates are often all that is needed.

If there is a hazard such as mould due to leaks, your tenants should be informed beforehand and steps should be taken to fix the problem. If your tenants later suffer from health problems that can be linked to the hazard in the property, you might be held responsible.

Conclusion

It is advised to document everything possible regarding the renting of your property – from the rental contract to how you handle complaints. Remember that it is of utmost importance to get insurance for your property. You must protect yourself against possible losses to your rental property caused by anything from vandalism to natural hazards.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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For newlyweds, one of the most important tasks to attend to is estate planning. The estate planning will depend on what the couple wants and what form of marriage they are in. It is therefore important to keep the following in mind when planning the years ahead together.

Marriage in community of property

There is a joint estate, with each spouse having a 50 percent share in each and every asset in the estate (no matter in whose name it is registered);

1. In the event of the death of one spouse, the surviving spouse will have a claim for 50 percent of the value of the combined estate. The estate is divided after all the debts have been settled in a deceased estate.
2. When drafting a Last Will and Testament, spouses married in community of property need to be aware that it is only half of any asset that he or she is able to bequeath.
3. Upon the death of one spouse, all banking accounts are frozen (even if they are in the name of one of the spouses), which could affect liquidity.

Marriage out of community of property without the accrual system

Each estate planner (spouse) retains possession of assets owned prior to the marriage. Each spouse’s estate is completely separated, even in the event of death. If you want your spouse to inherit something, you would need to outline this in your Will.

Marriage out of community of property with the accrual system

This is identical to a “marriage out of community of property” but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smaller estate once the marriage comes to an end through death or divorce.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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Properties sold on auction is not necessarily the bargain buy everyone seems to think it is. This is because the property on auction isn’t necessarily being sold due to financial distress. In today’s times, homeowners have turned to auction as a means of selling their property as soon as possible and for as a high a price as possible. When planning on buying a property on auction, it is important to do your homework and prepare. This is what you need to know about property auctions:

There are different types of properties that can be bought on auction, they include:

• Property up for sale by the owners themselves as a means of selling the property as quickly as possible.
• Sale in execution. This is a sale due to the financial distress of the property owner.
• Property in possession. Property that has been bought back by the bank, in other words, a repossessed property.

What to do before the auction:

Before the auction, there are certain things you can do to prepare, this includes:

• Viewing the property before the auction, as these properties are sold “as is”.
• Gather additional information on the property being auctioned ahead of time. Find out more about the area, local schools, facilities, asking price for properties in the said area etc.
• Make sure to have a copy of the Conditions of Sale. The reason being, before buying this property, it is important to know exactly what you are buying. You could be taking over accounts that have not yet been paid etc.
• If you are going to bid on a property, ensure that your finances are ready well in advance.
• Finally, if you cannot physically attend the auction, and want to bid by phone, you will have to organise this in advance.

What to do at the auction:

When arriving at the auction, there are certain processes that need to be followed before you can bid on the property, this includes:

• When arriving at the auction, you need to register to bid on the property. To register, you will need your ID, proof of residence, and the fee for registration.
• Go through the provided Conditions of Sale and ensure that no changes have been made to the document.
• Ensure that the auctioneer can clearly see you.
• If your bid is successful, you will be instructed to sign the Conditions of Sale as a means of confirming your purchase.
• You will then have to pay the auctioneer’s commission which is usually 10% of the purchase price plus VAT, as well as a deposit of 5% of the purchase price.
• You will need to have the funds shortly after the auction as this is a guarantee to the seller that you can purchase the property.

What will happen after the auction:

After the auction, if the buyer of the property is dissatisfied with the property for whatever reason, it’s too late. This is because auction properties are sold “voetstoots”, which means “as is”. This is one of the main reasons why it’s so important to see the property as part of your preparation before the auction. It’s also important to note that if the buyer defaults on the sale, the seller can take legal action and force the buyer to fulfil the contract. Before bidding on a property, it is important to make sure that you want to buy and can afford to buy the property being auctioned, as the breaching of contracts comes with serious financial and legal repercussions.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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A trust is an agreement between the person who owns the assets and the appointed trustees. A trust can be a good way to preserve your wealth for your family and children. A well-managed trust will make sure that anyone who is a beneficiary of the trust benefits from it. The trustees have the important job to administer the trust and its assets objectively with the best interests of the beneficiaries in mind.

Trusts and their administration fall under the Trust Property Control Act no 57/1988.

What types of trusts are there?

It’s important to note that there are two types of trusts. An inter vivos trust and a testamentary trust. A testamentary trust is one that’s formed from the will of a deceased person.  In the case of a testamentary trust the deceased’s last will serves as the trust document. An inter vivos trust is created between living persons, and will form the basis of this article. Inter vivos trusts can limit estate duty and preserve your assets and wealth for your descendants. Certain financial institutions assist in setting up a trust and can act as trustees.

Registering an inter vivos trust

To register an inter vivos trust with the Master of the High Court, the following documents must be lodged.

• Original trust deed or notarial certified copy thereof.
• Proof of payment of R100 fee, for registration of a new Trust.
• Completed Acceptance of Trusteeship (J417) and Acceptance of Auditor Application (J405) forms.
• Bond of security by the trustees – form J344 (if required by the Master)

* There are no costs involved in amending an existing Trust.

These documents are also required for the Master to issue the trustees with letters of authority for administering the trust. A trustee may not proceed to administer the trust without the written authority of the Master.

If the trust’s assets or majority of its assets are located in a particular area, then the inter vivos trust has to be registered with the Master who has jurisdiction in that area.

De-registering of a trust

The Master can de-register the trust only once it has been terminated. The common law makes provision for the termination of a trust as the Trust Property Control Act makes no such provision. The following circumstances can be grounds for a trust to be terminated:

• by statute
• fulfilment of the object of the trust
• failure of the beneficiary
• renunciation or repudiation by the beneficiary
• destruction of the trust property
• the operation of a resolutive condition

You will still need the original letter of authority, bank statements reflecting a nil balance on the final statement and proof that the beneficiaries have received their benefits.

Administering the trust

Trustees are required to comply with the Trust Property Control Act, which determines how trusts should be administered and the role of the trustees. If trustees fail to comply with the Act they may face criminal prosecution. The trustees have to always act with the best interests of the beneficiaries in mind.

Some legal requirements of trustees include not being able to make secret profits, taking care and being objective when administering trust assets and always acting in good faith.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Reference List: 

• justice.gov.za. The Department of Justice and Constitutional Development, Administration of Trusts. [online] Available at: http://www.justice.gov.za/master/trust/ [Accessed 19/05/2016].
• Sanlam.co.za. Sanlam Trusts. [online] Available at: https://www.sanlam.co.za/personal/financialplanning/willstrustsestates/Pages/trusts/ [Accessed 20/05/2016].

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Buying a property is a rather big deal, which is why you should be sure that you are able to afford it before you end up running into debt. Owning your own home is a very rewarding experience, but there are usually some obstacles along the way. Follow the steps the below to be sure that your new home is your dream home.

1. Make sure you have a healthy credit score

Your credit score lets banks know how well (or badly) you manage your debt. A good credit score improves your chances of getting a home loan.

In order to build up your credit score, make sure you pay all your bills on time, every time. Clear as much of your debt before applying for a home loan. If you don’t have a credit card, you should apply for one to aid your score. Check your status by getting a credit report from a credit bureau.

2. Save up for a deposit

Having a deposit saved makes you more attractive to sellers, agents and banks, which means, if you have a deposit ready, you have a higher chance of getting your loan approved. A deposit also means that your loan repayments will be lower; you’re in a better position to negotiate an interest rate if you have a deposit since there is a lower risk for the bank.

3. Look out for any additional costs

There are a number of additional costs that are incurred when buying and taking ownership of a house, and these may come as a shock to a first-time buyer.

Make sure to account for additional buying costs such as the loan initiation fee, transfer duty, loan registration costs and conveyancing fees. Also ensure that you take additional homeownership costs into consideration, e.g. loan repayments, homeowner’s insurance, municipal rates and taxes, water and electricity, maintenance, and security.

4. Ensure the price is worth it

You should make sure that there are no damages to the property. Be sure to check for any leaks, as it might become a costly and annoying long-term problem.

If you’re planning to make this your forever home, you might want to consider what facilities are available nearby in case mobility becomes a problem. Is there a doctor close by? Are the transport links good?

Conclusion

From this it should be clear that buying a house is a rather complex activity that necessitates a lot of thought, calculating, and logical reasoning. It is advised to obtain the help of a professional to be absolutely sure that the money you end up paying is worth all the possible obstacles that you may encounter.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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