The purchase price is secured either by way of a deposit or a bank guarantee from the purchaser’ s bankers( within the time period stipulated in the Agreement). The balance of the purchase price is paid on request by the conveyancers into their trust account.
Risk & Occupation Risk ordinarily passes on transfer, unless otherwise stipulated in the Agreement. This means that the seller is responsible for any loss to the property before transfer. If the Agreement stipulates that the purchaser will take possession before transfer, the purchaser assumes the risk. In this case, the purchaser will also become liable for all rates and taxes and other imposts, and will be entitled to any benefits derived from the property, such as occupational rent.
If the purchaser occupies the property before transfer, then occupational rent is due to the seller.
Transfer & Transfer Fees The purchaser is liable to the conveyancers for payment of transfer fees, transfer duty and all costs and fees in connection with the registration of the transfer of the property( and any bond registration handled by the conveyancers). The conveyancers are chosen by the seller. This avoids any potential conflict of interest.
Mortgage Bond Clause If the purchaser requires mortgage bond finance, this clause regulates the amount of mortgage finance required and dictates when the mortgage bond finance must be granted. The Agreement is ordinarily subject to granting of finance( known as a suspensive condition). If the finance application is unsuccessful, the Agreement becomes null and void.
Breach Clause This details the procedures to be followed if one party breaches the terms and conditions of the Agreement. The most common breaches are failure to pay the deposit and / or the balance of the purchase price on time and failure to produce the guarantees stipulated in the Agreement.
Other Suspensive Conditions & Continued Marketing Other than mortgage finance, the Agreement may be subject to other conditions( such as the sale of the purchaser’ s property). In the case of other suspensive conditions, the Agreement may contain a“ Continued Marketing” clause, which allows the property to remain on the market until the suspensive conditions are fulfilled. Should another acceptable unconditional offer be made to the seller prior to fulfilment of the purchaser’ s suspensive conditions, the purchaser is given 72 hours to either fulfil or waive the suspensive conditions, failing which the Offer to Purchase lapses and the competing offer becomes valid and binding.
Commission The seller is liable for the payment of any commission to an estate agent against registration of transfer. If the Agreement stipulates the purchaser is to pay the commission, the fee is added to the purchase price when the transfer duty due to SARS is calculated.
26 APRIL 2021 SA Real Estate Investor Magazine