Don’t make ma­jor changes be­fore you take trans­fer

George Herald - Private Property - - Property News -

Many home sale agree­ments pro­vide for the buy­ers to take occupation af­ter they have been granted a home loan and pro­vided fi­nan­cial "guar­an­tees" to the sellers' at­tor­neys, but they shouldn't start work on any ma­jor ren­o­va­tions or al­ter­ations un­til the trans­fer of own­er­ship has ac­tu­ally been reg­is­tered, ad­vises Ger­hard Kotzé, MD of the Real­net es­tate agency group.

He says buy­ers are un­der­stand­ably keen to make a new home their own, and to get the mess and dis­rup­tion over with if they plan to make sig­nif­i­cant changes. "But the fact is that they stand to lose thou­sands of rand if, for some rea­son, the trans­fer of their new home should fall through, be­cause most sale agree­ments stip­u­late that if this should hap­pen, the prop­erty that has been oc­cu­pied by the buyer must be re­turned to the seller in the 'same con­di­tion' as when it was oc­cu­pied."

There are sev­eral quite com­mon rea­sons why the trans­fer of own­er­ship might stall, or even be can­celled, he says, and the buyer who was given occupation of the prop­erty be­fore the regis­tra­tion of trans­fer is not legally a "ten­ant" - so he or she will not even be able to claim com­pen­sa­tion for any im­prove­ment made dur­ing this pe­riod, or for any work done to turn the home back the way it was.

"So buy­ers who have been too quick to be­gin home im­prove­ments could find, for ex­am­ple, that roofs or walls have to be re­painted in their orig­i­nal colours, that a hole dug for a new pool has to be filled in, or that the ex­tra park­ing space they cre­ated has to be turned back into lawn. Al­ter­na­tively, they may have to fin­ish - and pay for - projects they have al­ready started, with­out any com­pen­sa­tion by the orig­i­nal owner. New doors and win­dows they have in­stalled to im­prove se­cu­rity or let in more light may have to be left in place, for ex­am­ple, be­cause re­mov­ing them would leave the home in a worse con­di­tion than when they took occupation. Or, as­sum­ing that the home had a func­tional kitchen or bath­room on occupation, any up­grades or ren­o­va­tions be­gun in these ar­eas may ac­tu­ally have to be fin­ished, again at the buy­ers' cost, so that the prop­erty can be re­turned to the seller in the same work­ing order as when they moved in." Such sit­u­a­tions are dif­fi­cult to re­solve and can eas­ily lead to lengthy and fi­nan­cially dam­ag­ing dis­putes, Kotzé says, "so it is much bet­ter to only move in and en­joy your new home once the trans­fer of own­er­ship has been reg­is­tered and you are cer­tain it is yours to al­ter or im­prove as you wish".

Is­sued by Real­net

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