4
2 7
A U G U S T
2 0 2 1
O T H E R Buyers might be able to discuss a ‘rent to own’ or an instalment sale transaction with the seller. PICTURE: RODNAE PRODUCTIONS/PEXELS
P R O P E R T Y
N E W S
Understand ing the voetstoets clause
HELPING BUYERS WITH GREAT ADVICE FIRST-TIME buyers should arm themselves with a good team made up of a conveyancing attorney, mortgage consultant, property inspector and an insurance consultant, says Meyer de Waal, director of MDW Inc. They will guide them and help prevent them making common mistakes, some of which include: • Presuming subsidies for first-time buyers are available to only a select few.
• Not checking the status of on your interest rate can cost their credit profile before they apply for property finance. • Thinking that if their full home loan is declined, it is the end of the home purchase journey . Buying a property is one of the biggest investments one can make so, if a buyer’s credit score is not the strongest, a bank might approve their home loan, however, not at the best interest rate. “The ‘extra’ percentage
you thousands of rand as you repay your home loan over 20 years.” De Waal adds: “Buyers who have their home loans declined should consider a Finance-Linked Individual Subsidy Programme (Flisp) subsidy to bridge the shortfall between the home loan approved and purchase price. “They could also discuss a ‘rent to own’ or an instalment sale transaction with the seller.”
Dirco purchase in US a cautionary tale
Buyers can have an independent party inspect the property on their behalf in order to determine whether there are any issues with it. PICTURE: JASON BRISCOE/UNSPLASH
A
SALE agreement with a voetstoets clause means that the buyer acknowledges being aware of the condition of the property and has inspected it, says David Campbell of Meumann White Attorneys. But many buyers do not realise this. They also assume that the Consumer Protection Act (CPA) invalidates such clauses. “Under the CPA such clauses are only invalid if the seller sells property in the ordinary course of his business. While there are certain situations in which a seller will not be able to rely on a voetstoets clause, these are limited.” As a general rule, purchasers should be aware that they can have an independent party inspect the property on their behalf in order to determine whether there are any issues with it. “After registration of transfer purchasers often become aware of issues of which the seller was not even aware.”
BUYERS URGED TO KNOW WHAT THEY’RE GETTING INTO
A property’s market value and the sale price are not necessarily the same thing. PICTURE: DILLON KYDD/UNSPLASH
P
ROPERTY owners should always understand what constitutes the market value of their property and how this compares to a property’s selling price. Rob Roper of Roper & Associates says when registered valuers determine the open market value of a property, they stipulate whether the figure includes or exclude VAT and if it includes or excludes the agent’s commission. They also stipulate that all the necessary research establishing the property value has been undertaken; that the property does not have any restrictions on its title deed and/or the local authorities’ town-planning and building controls that may be prejudicial to the property and so affect
the value negatively. “Both the buyer and seller must have full knowledge of the rights to the property usage, development potential and any title deed/lease agreement restrictions.” A good example of this, he says, is the Department of International Relations and Co-operation which paid R100 million for a site in New York on which to build a new embassy, only to discover that they were not allowed to develop the site. “Therefore, the R100m is not the open market value.” Roper says “selling price” is a loose term that can mean the anticipated price of a property but is not necessarily the amount achieved or registered in the Deeds Office.
The property purchasing journey will be better if buyers know what the process entails. PICTURE: KINDEL MEDIA/PEXELS
PROPERTY buyers need to be fully aware of the buying process – and this includes all the legal requirements. Maryna Botha, director of STBB, says most conveyancing attorneys offer valuable information sheets and booklets on the process and role players and most of this is written in understandable, plain language. “Purchasers should read
up as much as they can and then ask questions, as much as they need to. The experience is so much better for them if they are involved and understand what is taking place.” Donald Mokgehle, senior associate at Adams & Adams Attorneys, agrees: “We urge all potential property buyers to consult an estate agent or conveyancer prior to entering into an agreement
of sale for immovable property to ensure that they are provided with the necessary guidance at the outset of the process.” He says that purchasing a property is one of the single biggest transactions that a person can enter into and so it is important that proper research is conducted beforehand so that they end up with the best property at the best price.
