Bank pro­to­col causes delays in trans­fers

Re­vised rule means the wait for trans­fers in new de­vel­op­ments is about a month longer

Weekend Argus (Saturday Edition) - - PROPERTY -

THE BANKS’ re­vised re­quire­ment that all ap­proval cer­ti­fi­ca­tion is in place be­fore trans­fer doc­u­ments are sub­mit­ted to the deeds of­fice is de­lay­ing new de­vel­op­ment prop­erty trans­fers by a month on aver­age.

So says Kim Pistor, le­gal ad­viser to Ra­bie Prop­erty Group, who warns the costs in­curred through delays will in­evitably fall on con­sumers.

Pistor says that be­fore banks al­low bonds to be reg­is­tered against properties in new de­vel­op­ments they re­quire an oc­cu­pancy cer­tifi­cate from the mu­nic­i­pal­ity, and National Home Builders Regis­tra­tion Coun­cil en­rol­ment cer­tifi­cates, gas, plumb­ing and elec­tri­cal cer­tifi­cates, builders’ com­ple­tion cer­tifi­cates, and engi­neers’ cer­tifi­cates.

“The banks re­quire th­ese doc­u­ments as part of their se­cu­rity over the in­volved prop­erty and for this rea­son they in­sist that th­ese are in place by the time the trans­fer of the prop­erty reg­is­ters in the deeds of­fice,” Pistor says.

“Tim­ing has al­ways been par­tic­u­larly cru­cial when it comes to plan­ning the trans­fers of sec­tional ti­tle units and han­dovers to buy­ers, which can only oc­cur once all the doc­u­men­ta­tion is in place, in­clud­ing the oc­cu­pancy cer­tifi­cate from the mu­nic­i­pal­ity.

“Pre­vi­ously, the sub­mis­sion of the re­quired doc­u­ments to the banks could take place at the same time the trans­fer doc­u­ments were be­ing cir­cu­lated in the deeds of­fice – a process

‘This ef­fec­tively means that trans­fers can be de­layed by about a month while the doc­u­ments are be­ing ob­tained.‘

which gen­er­ally takes three to four weeks.”

Pistor says it is un­for­tu­nate that banks have re­cently been in­sist­ing that th­ese items are in place be­fore the at­tor­neys are per­mit­ted to lodge their trans­fer doc­u­ments in the deeds of­fice.

“This ef­fec­tively means that trans­fers can be de­layed by about a month while the nec­es­sary doc­u­ments are be­ing ob­tained to sat­isfy the banks’ re­quire­ments.

“The re­sult is that buy­ers who have taken oc­cu­pa­tion of their prop­erty have to pay oc­cu­pa­tional in­ter­est and the de­vel­op­ers’ hold­ing costs to cover the ex­tra month are in­creased – a cost which will in­evitably have to be passed on to the con­sumer.”

She says it is re­gret­table that the banks are not open to ne­go­ti­a­tion and did not con­sult de­vel­op­ers about th­ese pro­ce­dures. Also, their in­ter­nal con­trols have be­come so com­put­erised that ac­cess to their de­ci­sion-mak­ers is be­com­ing more and more re­stricted.

Pistor says the banks would prob­a­bly cite the National Credit Act and the Con­sumer Pro­tec­tion Act as the rea­sons for their hav­ing to be more care­ful.

“Un­for­tu­nately, this leg­is­la­tion has also re­sulted in banks rais­ing their ad­min­is­tra­tion and initiation fees. In fact, the initiation fee charged by banks has jumped from around R300 a bond a few years ago to the cur­rent rate of around R5 700 a bond,” says Pistor.

PROF­ITABLE: Mil­ner­ton of­fice premises can be leased at R65/m2.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.