Do homework to avoid deal delays
IN COMPLEX, protracted transactions like property sales, delays are not only frustrating, but can be extremely costly.
They could even torpedo a deal completely, according to Jill Lloyd, veteran agent and area specialist for Lew Geffen Sotheby’s International Realty in Rondebosch and Claremont.
However, while some delays cannot be foreseen you can reduce your risk by doing your homework and “having all their ducks in a row”, she says.
Essentially, there are two primary types of delay – the first relating to the confirmation of the sale and those that occur once the sale has been confirmed and hold up the transfer, Lloyd says.
“Property transactions are known to be lengthy processes, with multiple steps and reams of documentation, and once the potential minefield of suspensive conditions and contractual obligations has been successfully navigated and the deal is finally done, many people breathe a sigh of relief. But the expected downhill cruise to transfer can still become an uphill battle if one isn’t careful.
“One of the main reasons for delayed transfers is that the timeline is out of sync, especially when two or more deals are linked and money from one sale is needed to purchase the next property and so on…
“It is also important for buyers to budget for the transfer costs of the new property they are buying or have an access bond in place on their current home, otherwise when the attorney calls for bond cancellation that bond account will be frozen and they will not be able to access the funds.”
Lloyd adds that not giving the required 90 days’ notice of cancellation of the existing bond can also cause delays, as well as avoidable late-cancellation fees.
“If a homeowner is seriously thinking about selling, they should give notice to the bank holding the bond. In doing so, they are not committing to selling, merely notifying the bank of the possibility, and they can keep on renewing the cancellation if they don’t sell timeously or revoke the notification if they change their minds.”
Craig Guthrie, partner at Guthrie Colananni Attorneys explains that one of the transferring attorney’s key roles is to co-ordinate and control all the role players involved in a transfer, including Sars (transfer duty), the municipality (Rates Clearance Certificate) and the bank.
“In order to do this as seamlessly as possible, it is essential that the buyer and seller submit all the necessary documentation in time, as per the legal requirements and without omissions. This is especially important if either party resides in another country.”
Guthrie says although hiccups can occur at any point of the transaction, they most commonly occur at the following stages:
Bond approval.
Bond cancellation.
The signing of transfer documents.
Obtaining valid compliance certificates.
Issues encountered at lodgements requiring the removal of notes by the Registrar of Deeds.
Transfers which are unusual and more complex, such as estate transfers which require an endorsement of the Master of the High Court, can cause a delay.
Most of these delays can easily be avoided through prompt co-operation with the transferring attorney and the paralegal handling their transfer or, if they are outside of South Africa, by giving a valid power of attorney to a person within South Africa,” Guthrie says.