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Buying/selling a home? Be aware of the many steps in transferring property

steps in transferring propertyIn our experience, a surprisingly large number of those buying and selling property are not aware of all or some of the many steps in transferring property. Property deals are involved and complicated. Those who enter into property transactions without professional advice all too often end up being badly hurt.

The steps in transferring property: some common areas of ignorance

The first issue concerns a failure to appreciate all the costs involved.

Frequently,the buyer will not realise that he has to pay transfer duty on the date specified. This can cause serious holdups because while the Receiver of Revenue is unable to issue a receipt for the transfer duty, the deal cannot be finalised.

Quite often, the buyer will be waiting for the sale of his current home to go through before paying transfer duty. If, for whatever reason, this is delayed, he may feel entitled to be or unable to delay taking transfer on his newly purchased home, but this is not condoned in law.

Similarly, the buyer may either not appreciate or resent that he has to pay the new bond registration costs and the attorney’s fees. However, failure to do this at the agreed time will, again, hold up the transaction and may even result in its eventually being cancelled.

A good estate agent will see to it that these obligatory costs are understood at the outset. Regrettably, because the conveyancer becomes involved only after the sale has been agreed to, he is not usually in a position to forestall difficulties here.

A second big mistake made by many is to neglect to get the electrical, plumbing, gas and borer beetle certificates as soon as the sale is signed.

Without these, the sale cannot go through.

Obtaining these is the seller’s duty,and it is usually the electrical certificate that is most problematic. What happens all too often is that the seller will have an electrical certificate but as these are valid for only two years (provided no further electrical work is done) it may be out of date. Many sellers do not understand this.

When a new electrical inspection is finally agreed to, the seller may point out that many of the repairs which the electrician deems essential for issuing a certificate have been dealt with at some previous stage.

Electricians, it has to be said, can and do sometimes maximise the necessary work, often forgetting that their task is not to put the whole home’s electrical network in A1 order but merely to make it compliant with the regulations.

In these circumstances, the home seller can appeal to the Electrical Board and/or get new quotes.

Again, however, much time may be lost and the conveyancer may have to act in an advisory role for which he is probably not compensated. The situation may be further complicated by the fact that certain banks will not pay bond finance until they, too, have received a certified copy of the electrical certificate.

A third major case of holdups is that those involved are often ignorant of the rates legislation.

On registering a bond, the Deeds Office will give the municipality the details of the new owner. The registration can, however, only take place if the seller has paid the rates owed to date and four months rates in advance. This matter has to be handled by the seller in a direct relationship with the Council the conveyancer, although inconvenienced if there is a holdup, is not involved and if the rates payments are not made, no rates clearance certificate will be issued and the sale cannot proceed.

A fourth issue which frequently causes delays and distress is the confusion over the date of transfer and the date of occupation.

It has to be realised that the date of transfer cannot be diarised in advance, there are no hard and fast rules governing when this occurs and often the transfer date will not coincide with the occupation date.

For this or other reasons, the seller will often agree to the buyer taking occupation prior to transferpaying a bond related occupational rental until transfer occurs.

This can be a very satisfactory arrangement,but it can also have one major drawback: on moving into the home, the buyer may find 101 faults that escaped his notice on his original inspections and he may then try to force the seller to put these right, illegally delaying transfer to achieve his ends.

This attitude ignores the fact that in the vast majority of sales the voetstoots clause applies and this can only be overruled if it can be proved that the seller deliberately hid a problem, something which the majority of courts will not accept.

In nine cases out of ten, the wise course to follow is to ensure that the occupation and transfer dates are the same and if this involves the buyer finding temporary accommodation, that cannot be helped.

Our advice

The above is what we advise wherever possible: be aware of the steps in transferring property. We also advise sellers, buyers and the agent to do a final inspection together and then draw up a list of defects as observed by all.

Our main message to clients, however, is before you sign any agreement, ensure that you are aware of all the contractual obligations. Although there are cases where clients deliberately try to manipulate contracts, most of the problems are caused simply by ignorance.

Our advice to agents is this: Agents should take it on themselves to understand these matters and prevent clients making mistakes.

Images courtesy of Stuart Miles at FreeDigitalPhotos.net.

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