Property Transfer Act: Buyer & Seller Obligations & rights
Whenapropertyistransferredbetweenabuyerandaseller,therearenumerous lawsandregulationsthatmustbefollowed.Asaresult,certainrightsand obligationsexisttosafeguardtheinterestsofbothparties.Understandingyour rightsandobligationsisimportantwhetheryou'reabuyerorasellertoprotect yourselffromunpleasantshocks.
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Thecontract,whichisdiscussedbetweenthepartiesattheoutsetofproperty transfer,governstheobligationsandrightsofasellerandabuyer.Intheabsenceof suchanagreement,theTransferofPropertyActof1882'srulesoutlinedinSection 55arefollowedwhentransferringproperty.Tosafeguardthemselvesfroman unjustcontract,allpartiesmustbeawareoftheirrightsandbenefits.Continue readingtolearnaboutaseller'sandabuyer'sobligationsduringapropertytransfer.
Obligations or liabilities of the seller before the sale
Thefollowingaretheobligationsasellerhasbeforeasale:
Disclosure of the property's flaws
Allmaterialflawsinthepropertythatabuyermightnotbeawareoforbeunableto spotinthenormalcourseofbusinessmustbedisclosedbythesellertothatbuyer.A materialdefectisaproblemwithapartorsystemofaresidentialpropertythat couldnegativelyaffectthevalueofthepropertyinquestionorposean unreasonablerisktotheoccupant,suchastemporarilyconcealed,seriousseepage problems,ashakybuildingfoundation,etc.
Examination of the title deed
Alltitledocumentspertainingtothepropertythatareintheseller'spossessionor withintheirrangeofaccessandproductionmustbemadeavailabletothebuyer uponrequest.Additionally,thesellerisobligatedtoprovideaccurateinformationin responsetoanyquestionsthebuyermayhaveaboutthepropertyoritstitle.
Make a conveyance agreement
Itisrequiredtosignacontractwiththebuyerthatspecifieshowlongthebuyer's interestinthepropertywilllastafterthesellertransfersittohimorher.
Remove all debts & taxes
Additionally,it'scriticaltopayandresolveanyoutstandingdebtsthathavebeen accruedonthepropertyupuntilthesaledate,suchashouseloansandother encumbranceslikepropertytaxes.
Betweenthedateofthepurchaseagreementandthetransferofpossession,the sellerhasafurtherimportantresponsibilitytotakereasonablecareofthereal estateandanypertinenttitlepapers.
After-sale obligations of the seller
Followingthecompletionofthesale,thesellerisrequiredtoperformthefollowing obligations:
Transfer ownership to the buyer
Afterthesaleiscompleted,thesellermustturnovercontrolofthepropertytothe buyeroranyotherpersonthebuyerdirects.
Deliver title deeds after payment has been received
Alldocumentspertainingtotheproperty'stitlethatthesellerownsmustbe deliveredwheneverthebuyerpurchasestheproperty.Thedeed'srightsare inheritedwiththeland.Acompletetransferfromthesellertothebuyeristhus necessary.Thebuyermustalsodeterminewhetherthetitledeed&thepropertyare subjecttoanunregisteredmortgage;failingtodosomightbeconsideredwillful neglect.
Seller’s rights
Thefollowingrightsmustbeunderstoodbyaseller:
Rent and revenue
Priortothesale,thesellerisobligatedtopayallprofitsandrentderivedfromthe property.
Payment of consideration
Thesellingcontract,whichthesellerisentitledto,isallthatthebuyerhastogoon. Thebuyermustfollowanytimeconstraints,forinstance,ifthecontractrequires thataportionofthemoneybemadewithinacertainwindowoftime.
Duties of the buyer before the sale
Theobligations&liabilitiesofabuyerpriortothetransactionarelistedbelow:
Timely payments
Thebuyerisobligatedtoprovidethepromisedconsideration.Thebuyermustmake paymenttotheappropriatepartyasdirectedbythesellerattheagreed-upontime
andlocationofconsummatingthedeal.Thesellerhastherighttosuethebuyerif theyfailtoabidebythepaymentterms.
Encumbrances on the property
Anyencumbrancesmustbeclearedbeforethesellersellsthepropertytothebuyer. Butlet'ssaythatbeforethesaledeedissigned,thebuyerlearnsthatthepropertyis subjecttoencumbrancesorcharges.Inthatinstance,theyareabletokeepsomeof thepurchasepricetogotowardspayingfortheproperty.Inthissituation,thebuyer alsohastheoptionofcancellingthecontractorbringinglegalactionagainstthe seller.
Buyer’s duties after the sale
Thefollowingarethebuyer'sobligationsfollowingapropertysale:
Recover the property loss
Assoonasownershippassestothebuyer,theyareresponsibleforpayingforany damage,lossofvalue,orotherlossestothepropertythatarenottheresultofthe seller'snegligence.Eveninsituationswherethepropertytransferiscomplete,this rulestillapplies.Thepurchaserhasnotyetreceivedit,though.
Pay the expenses
Theownershipofthepropertyisthemainpointofemphasis.Similartoincurring losses,theownerofapropertymustpayanytaxesorrentdueonitafterpurchasing it.Authoritiesmayimposetaxesaspubliccharges.Insteadofthesellerorbuyer,the governmentleviestaxontheproperty.
Buyer’s rights
Thefollowingdetailshighlightthebuyer'srights:
Property value agreed upon
Evenifthepropertyworthrisesasaresultofrecentannouncementslike infrastructureupgrades,thesellercannotdemandahigherpriceoncethepurchase isfinalised.Inthesesituations,thebuyerwillgainfromtheincreaseinprofitsand rentals.
Utilise payment for prepaid consideration
Typically,whenacontractofsaleismade,thesellerrequestsadepositfromthe buyer.Thissumchangesfromsituationtosituation.Thebuyerhastherighttoplace alienontherealestateagainsttheseller,anyoneclaimingunderhim,andthe interestaccruedonthedeliverydeposittheymade.Thisstatutoryfeeisassessed startingonthedayofpayment.
The Earnest amount
Theearnestamountistheportionofthepurchasepricethatthebuyerpaysthe selleratthetimethecontractissigned.Itservesasaguaranteethatthebuyerwill fulfilthecontractandisretainedbythesellerassecurity.Intheeventofadefaultby thebuyer,thesellermaykeeptheearnestmoney.Thebuyermaylaunchalawsuit andgetthemoneybackifthevendorcommitsfraud.
Inadditiontotheseobligationsandrights,whichareoftenoutlinedinthe"Sale Agreement,"itseemssensetoincludeapenaltyclauseinthesamedocument.This provisionstatesthatanyearnestortokenmoney(often10%to20%ofthetotalsale priceoftheproperty)paidbythebuyershallnotberefundedintheeventthatthe buyerfailstomakethebalancepaymentwhendueorcancelsthetransaction.Ifyou intendtobuyorsellaproperty,itwouldbehelpfultospendsometimelearning aboutyourobligationsandprivilegessothatyouareawareofwhatisrequiredof youandwhatyourrightsarethroughoutthesellingprocess.
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