Addendum A supplementary and separate agreement to an original sale contract. Should it contradict the original contract, it is presumed to overrule it.
Agreement of Sale Also referred to as the Offer to Purchase. It is a legally binding document signed by the buyer and seller, whereby the buyer agrees to buy a property from the seller, who agrees to sell the property to the buyer for a proposed purchase price. It states the terms and conditions under which the property will be sold.
Arbitration Procedure whereby parties to a dispute appoint an arbitrator to settle a dispute.
Breach Clause A condition in a contract, which obliges the parties to give the defaulting party written notice to remedy their breach of contract within a specific period before the contract can be cancelled.
Clearance Certificate Issued by the relevant authority stating that the rates or levies for the property have been paid up to a future date.
Commission Money paid to an estate agent for negotiating a real estate transaction.
Common Law The law that automatically applies if the parties have not reached an agreement on a specific legal issue in the Offer to Purchase. The South African common law is the Roman Dutch Law.
Condition A clause that renders the operation and consequences of the contract as a whole dependent on an uncertain future event.
Contract A legally enforceable agreement.
Conveyancer An attorney who is usually appointed by the seller and is qualified to attend to the registration and transfer of immovable property from a seller to a purchaser and the registration of any bonds.
Cooling-off Right A statutory right, recorded
in Section 29A of the Alienation of Land Act, giving the buyer of
a residential property costing R500 000 or less, the right to withdraw
from the sale within five working days of signing the offer to purchase.
It does not apply if the buyer is a company, close corporation or
trust.
Deed of Sale Also referred to as the Agreement of Sale or Offer to Purchase.
Default Failure to meet legal obligations in a contract.
Defect Fault in a property. A patent defect is a clearly visible defect. A latent defect is a fault or flaw that is not immediately detectable, or is hidden from view on inspection of the property.
Deposit Part of the purchase price paid upfront, which reduces the amount to be borrowed from a bank.
Domicilia Citandi et Executandi Also referred to as Domicilium. It is the physical address a person gives for any legal documents and notices that might have to be served, the place where a person is deemed to be a permanent resident. It may not be a P O Box or Private Bag Address. If you have been sent a document or notice to this address, you will be deemed to have received it, even if you did not in fact receive it.
Dwelling Any place that is used as residence. It may be a house, flat, shack, hut or outbuilding.
Electrical Compliance Certificate A certificate, issued by a qualified electrician, stating that the electricity installation for a property is safe according to the Occupational Health and Safety Act. The cost of this and any electrical repairs that need to be made are for the seller’s account. It is legally required in order for the property to be transferred into the purchaser’s name.
Entomologist’s Certificate Legally required in some coastal provinces before transfer of a property can take place, confirming that its structure is free of wood borer or termite infestation. Optional in other provinces.
Escape Clause A condition in a contract, when a buyer is given time to sell his property first, giving the seller the right to cancel the agreement if he gets an offer from another buyer.
Estate Agent A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.
Fixtures and Fittings Attachments to a home, deemed to permanently belong to it. If it is permanently attached, nailed or screwed into the floor, wall or ceiling, it is a fixture.
Guarantee A formal letter issued by a financial institution to the transferring attorney, undertaking to pay the purchase price (or outstanding amount) on registration of transfer of the property into the name of the buyer.
Immovable Property Land and everything that is permanently attached to it.
Interest Bearing Account When attorneys and/or estate agents hold money for clients, it is deposited into separate Interest Bearing Accounts, until these monies and interest accrued during this time have to be paid out to whom they are owed.
Latent Defect A fault or flaw which is not immediately detectable or is hidden from view on inspection of the property.
Legal Entity A company, close corporation or trust.
Levy Clearance Certificate Issued by the body corporate of a sectional title scheme stating that the levy has been paid to a future date in respect of the property.
Loan An agreement between the customer and a bank whereby the bank lends the customer money in return for a security (mortgage bond) being registered over the property in the bank’s favour.
Movables Accessories which are of permanent service to the immovable property and which are necessary for its effective use, eg. pool cleaning equipment or stools used at a breakfast nook.
Occupation Date The date when the buyer is entitled to physically occupy the new property.
Occupational Rent An amount paid by the person occupying the property to the party in whose name the property is registered if the registration of transfer does not take place at the same time as the occupation date.
Offer to Purchase An offer in writing from the buyer to the seller. Once signed by all parties, it becomes a legal and binding contract between the buyer and the seller.
Patent Defect A defect which is clearly visible upon reasonable inspection, like a crack in a wall or a window. The buyer has no recourse against the seller for such defects.
Permanent fixtures Items which had been permanently affixed to a property
Property description The description of the property as found in the title deed.
Purchase price Amount the seller and purchaser agree on.
Purchaser Future owner of the property
Rates and Taxes Monies levied on all property owners by the municipality payable on a monthly basis and calculated as a percentage of the value of the property.
Rates Clearance Certificate Issued by the local authority stating that the rates and taxes have been paid to a future date.
Registration of Transfer The process whereby ownership of property transfers from the seller to the buyer via a Deed of Transfer.
Resolutive condition A clause in the contract referring to an uncertain future event, where the contract is immediately binding and will remain binding unless the condition is not fulfilled.
Risk The seller is responsible for any damage to the property before the purchaser takes transfer and should insure it until date of transfer.
Seller Usually the registered owner of a property. The seller could also be a person who had bought the property, but had not taken transfer of it yet.
Subject-to-Sale A term used to describe that the sale will only become unconditional if and when the stipulated conditions are met.
Suspensive Conditions A clause in the agreement of sale which must be fulfilled for the agreement to become unconditional and legally binding. The arbitrator’s decision is final and the parties are bound by it.
Title Deed A document that gives evidence of an individual’s ownership of property. It includes the following information about the property: names of the current and previous owners; a full description including its size; the purchase price paid by the existing owner; all conditions restricting the use; and all limited real rights registered.
Transfer Costs Costs payable for the registration of a property. It includes transfer duty, conveyancing fees and registration fees. This is payable by the Purchaser, unless otherwise agreed.
Transfer Duty A tax levied by the government on the transfer of land. If the purchase price includes VAT, no transfer duty is payable.
Transferring Attorney Attorney appointed by the seller to attend to the transfer of the property into the name of the buyer.
Trust Account The separate interest bearing accounts used when attorneys and/or realty companies hold money for people, until these monies and interest have to be paid out to whom they are owed.
Value Added Tax (VAT) Tax on goods that is levied on the value added that results from each exchange. If the seller is a “VAT Vendor”, VAT may be payable and not transfer duty, or if the Purchaser is a Vendor, transfer duty may be payable.
Voetstoots To sell it as it stands, without any guarantees given by the seller as to the condition of the property. It means “let the buyer beware.” If there are any defects in the property of which the seller was unaware, the buyer will acquire the property with such defects.
Waiver of conditions When a purchaser forgoes a suspensive condition without it being met.
