Plan ahead for ad­di­tional costs of buy­ing and sell­ing prop­erty which can es­ca­late

Weekend Argus (Saturday Edition) - - PROPERTY -

WHETHER you’re buy­ing or sell­ing a prop­erty, there are al­ways ad­di­tional costs to be con­sid­ered, says Mike Gre­eff, chief ex­ec­u­tive of Gre­eff Christie’s In­ter­na­tional Real Es­tate.

“It’s im­por­tant to fac­tor these ex­tra costs into your cal­cu­la­tions be­fore con­clud­ing any trans­ac­tions to avoid nasty or un­af­ford­able sur­prises,” he says.

“Sell­ers are li­able for a num­ber of costs – these in­clude: es­tate agent’s com­mis­sion and pos­si­ble cap­i­tal gains tax. Sell­ers are also li­able for the cost of bond can­cel­la­tions on ex­ist­ing bonds. Even if your bond has a zero bal­ance, it will still in­cur a can­cel­la­tion fee of around R3 000 to R3 500,” says Gre­eff.

He says it’s also im­por­tant to pro­vide the bank with three­months’ writ­ten no­tice of can­cel­la­tion to avoid penal­ties.

Sell­ers must also en­sure that rates and ser­vices bills are paid up and all ar­rears are set­tled. There is also a re­quire­ment for a 120-days-in-ad­vance pay­ment on rates and mu­nic­i­pal ser­vices. Levy amounts ow­ing to bod­ies cor­po­rate or home­owner’s as­so­ci­a­tions must also be set­tled by sell­ers.

“Com­pli­ancy cer­tifi­cates are also for the sell­ers’ ac­count. You need to en­sure that the elec­tri­cal, plumb­ing and gas in­stal­la­tions in the prop­erty you’re plan­ning to sell are in or­der. This can be costly, but it’s a vi­tal step in the sell­ing process,” says Gre­eff.

“A bee­tle in­spec­tion is also re­quired in coastal ar­eas. If an in­spec­tion re­veals faults or non-com­pli­ancy, apart from the cost of the in­spec­tion, you will be re­quired to pay for the req­ui­site ad­just­ments and re­pairs to bring the prop­erty up to a com­pli­ant level.”

Sell­ers are obliged to pro­vide buy­ers with a cer­ti­fied copy of the ti­tle deed. If this has been lost, then the seller must pay for a re­place­ment. The cost is R2 057 for a sin­gle deed.

“If sell­ers have agreed in the sale con­tract to carry out cer­tain re­pairs, then they are also li­able for the costs of those re­pairs,” says Gre­eff.

The buy­ers’ costs could in­clude trans­fer duty, un­less the seller is a VAT ven­dor and the sale is deemed to be part of the seller’s VATable en­ter­prise. In the con­tract, the pur­chase price will be recorded as ei­ther in­clud­ing or ex­clud­ing VAT.

“There may be a cost as­so­ci­ated with ob­tain­ing a home­owner’s as­so­ci­a­tion con­sent to trans­fer, and this cost could be for the buy­ers’ ac­count,” says Gre­eff.

Ser­vices may have been paid up by the seller, but the buy­ers will have to foot the bill for a rates clear­ance cer­tifi­cate, and in the case of a sec- tional-ti­tle trans­fer, the cost of a levy clear­ance cer­tifi­cate.

If the buy­ers are mak­ing use of a home loan, then there will be a cost to reg­is­ter the bond.

“The buy­ers will also bear the costs of any ad­di­tional con­tracts such as a tri­par­tite agree­ment, if ap­pli­ca­ble,” says Gre­eff. He says that if buy­ers in­tend to ren­o­vate or sub­di­vide, there will be a cost re­lated to a con­veyancer’s cer­tifi­cate with re­gard to ti­tle re­stric­tions.

In the case of the plans, buy­ers should try to en­sure that the sell­ers give an un­der­tak­ing to de­liver copies of ap­proved plans for the prop­erty. This should be noted in the agree­ment, or the costs could be for the buy­ers’ ac­count.

“Fi­nally, buy­ers should be aware of the po­ten­tial costs of oc­cu­pa­tional rental, which sell­ers may charge if the buy­ers move in be­fore trans­fer.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.