A
Advocate A lawyer who takes instruction from an attorney and generally appears in court.
Attorney A lawyer who provides general legal services to the man in the street and who may instruct an advocate to appear in court.
Agreement of Sale
This is an agreement between a buyer and a seller. It sets out the main terms of what has been agreed such as the address, the price, the names of the parties. It also deals with what happens if something goes wrong. Some contracts have to be written in order to be binding (a contract for the sale of land for example must be in writing and signed by both the buyer and the seller).
Also called Contract of Sale, Offer to Purchase, Purchase Agreement, Deed of Sale. (See Information Required in a Deed of Sale)
Assign Assign a transfer of right or an interest in property from one person to another.
Assignee The person to whom the right or interest in property has been transferred (viz. the buyer).
Assignor The person from whom the right or interest in property has been transferred (viz. the seller).
B
Body Corporate For properties on Group Titles, the Body Corporate is the legal entity which manages the complex, holds meetings and takes care of the legal responsibilities of the complex. Each owner of a lot with the Group Title are members of the Body Corporate.
Bond Attorney The Conveyancing Lawyer appointed by the financial institution that the purchaser has applied to for a bond. The bond conveyancer handles the registration of the bond in the name of the purchaser. The fees for the Bond Lawyer will be included in the buyer’s bond costs. (see Conveyancing Fees and Taxes)
Bond Costs
These are the fees that are incurred in registering the bond. They include the fee for inspecting the property, stamp duty, the bond conveyancing fees, interest and insurance premiums. They are payable by the buyer to the attorney attending to the registration of the bond on behalf of the bank (Bond Attorney). Conveyancing fees and stamp duty are calculated on a sliding scale based on the bond registered. (see Conveyancing Fees and Taxes)
By-Laws These are the rules and regulations which govern what an owner (or tenant) can do within the complex. For example, a Body Corporate may have a by-law which prohibits animals within the complex.
Breach of Contract Where one of the parties to a contract fails to keep to the terms and conditions of the agreement.
C
Cancellation Attorney The Conveyancing Lawyer appointed by the financial institution that holds the seller’s bond. The fees for the Cancellation Lawyer will be included in the seller’s bond cancellation fees. (See Conveyancing Fees and Taxes)
Conveyancer A Conveyancer is a lawyer (solicitor) who is qualified to deal with property transactions. All property transfers in South African law must be done by a conveyancing lawyer. There are usually 3 Conveyancing lawyers – the Transfer Lawyer (or Transfer Attorney), the Bond Lawyer (or Bond Attorney) and the Cancellation Lawyer (on Cancellation Attorney). (See Selling or Buying a House – Conveyancing 101)
Contract of Sale
This is an agreement between a buyer and a seller. It sets out the main terms of what has been agreed such as the address, the price, the names of the parties. It also deals with what happens if something goes wrong. Some contracts have to be written in order to be binding (a contract for the sale of land for example must be in writing and signed by both the buyer and the seller).
Also called Agreement of Sale, Offer to Purchase, Purchase Agreement, Deed of Sale. (See Information Required in a Deed of Sale)
Collateral
Collateral is taken into account when calculating your Loan to Value Ratio. When a borrower does not have cash available for a deposit, other acceptable types of collateral security include, but are not limited to: shares, fixed deposit, bank/company/government gurantees, debt free immovable property, life assurance policies.
Cooling off Period This clause is included in an offer to purchase a property under R250 000. It is based on a new law allowing first time home buyers the opportunity to change their minds within five days of signing the offer.
Credit Score A statistical method of assessing your creditworthiness. Your credit card history; amount of outstanding debt; the type of credit you use; negative information such as bankruptcies or late payments; collection accounts and judgments; too little credit history and too many credit lines with the maximum amount borrowed are all included in credit-scoring models.
D
Deed The legal document by which title to fixed property is transferred from one owner to another. The deed contains a description of the property, and is signed, witnessed, and delivered to the buyer at closing.
Deeds Office (or Deeds Registry) A department of the Central Government which has offices in Cape Town, Pietermaritzburg, Pretoria, Johannesburg, Bloemfontein, King William’s Town and Vryburg where documents relating to the registration of immovable property are lodged. The Deeds Registries guarantee that the land which they say is registered in your name is in fact registered in your name. Other documents such as ante-nuptial contracts are also registered there.
Deeds Office Registration Fees These fees are charged by the Deeds Office for registering the mortgage bond and the title deed. (see Conveyancing Fees and Taxes)
Deed of Sale
This is an agreement between a buyer and a seller. It sets out the main terms of what has been agreed such as the address, the price, the names of the parties. It also deals with what happens if something goes wrong. Some contracts have to be written in order to be binding (a contract for the sale of land for example must be in writing and signed by both the buyer and the seller).
Also called Agreement of Sale, Contract of Sale, Offer to Purchase, Purchase Agreement. (See Information Required in a Deed of Sale)
Deposit
The deposit is the part of the purchase price of the property that you pay in cash up front and reduces the amount that you will need to lend. A lender prefers a deposit as it means that the borrower has a financial commitment in the property. In addition, the home loan required is less than the current market value of the property.
Disbursements Fees that must be paid to third parties such as Local Authorities (for Municpal Rates and Taxes) and Deeds Office.
Domicile This will usually be the place or country where you live. If, for example, you live in South Africa then you would say that you are domiciled there. It gets more complicated where you may work overseas but still consider that you live in another country. In such cases, generally, you are domiciled in the country that you consider to be your home.
Domicilium Citandi Et Executandi Often referred to simply as domicilium. This is the address for service and delivery of documents. The choice of domicilium should not be taken lightly as, once it has been selected, letters and notices can be served on this address and you will be deemed to have received them, even if you did not in fact do so. The domicilium must be a physical address, not a PO Box number.
E
Electrical Certificate of Compliance When a property is sold the new owner will require an Electrical Certificate of compliance before the Local Authority will connect the electricity supply. It is common practice for the Seller to furnish such a compliance certificate to the Purchaser. The Seller may have to instruct an electrician to repair any installation defects, before the certificate can be issued.
Equity This is the amount by which the value of a bonded property exceeds the amount owing on the loan.
Estate This is whatever you own e.g.a house, a car, furniture, clothing, investments etc.
Estate Duty You may be liable to pay tax (Estate Duty) on your death. If your estate, after deduction of certain expenses and rebates, is worth more than R3,500,000, then your estate will be liable to Estate Duty. This is charged at a rate of 20 %, and is paid on the amount by which your net estate value exceeds R3,500,000.
F
Fittings Fittings are items that are not attached to the building or land and are not subject to the sale unless they are specifically included, carpets and curtains would normally be thought of as fittings.
Fixtures
Fixtures are items on a building or land that have become part of the building or land and are therefore included in the sale. They are items that are usually physically fixed to the building such as shelves or fitted wardrobes. A general rule of thumb is that if the item is affixed, that is, it is firmly secured onto the land or house and cannot be removed without damage, then it qualifies as a fixture.
Foreclosure (or Repossession)
Legal process by which a mortgaged property may be sold to pay off a mortgage loan that is in default.
G
Guarantee A formal letter issued by the bank or other financial institution undertaking to pay the purchase price (or part thereof) on registration of transfer.
Grantor The person giving rights away in a power of attorney. For example if you want to appoint someone to act for you while you are out of the country or are incapacitated then you would grant them a General Power of Attorney. In doing so you would be the grantor.
Grantee The person to whom rights are granted in a power of attorney. If you appoint someone to act for you while you are out of the country or are incapacitated then you would grant to a General Power of Attorney. In so doing they would be the grantee.
H
I
Immovable Property This refers to land (and the buildings thereon) as opposed to movable property.
J
Joint and Several Where two or more people agree to be jointly and severally liable, they are agreeing that each person is liable for the repayment of the whole of a debt and not just a proportion of it.
K
L
Latent Defect This is a fault or flaw that is not immediately detectable or is hidden from view on inspection of the property. (See Buying a Home – Tips)
Lease A document of agreement by which a Landlord grants a Tenant the right to occupy property, usually in return for a capital payment or rent. The lease is usually granted for a fixed and specified time.
Loan to Value Ratio
This is the percentage the bank is willing to lend you, expressed as a percentage of the bank’s estimated value of the property and the loan amount required.
M
Managing Agent A person appointed by the owner of a property (usually a landlord) to act on his behalf, usually in collection of rents or maintenance of the property.
Mortgage A loan made to help you buy a house. The loan is ‘attached’ to your title deeds which means that you cannot sell the property without paying off the mortgage at the same time.
Movable Property This refers to any objects other than land which may be owned by you and would include shares, paintings, furniture, clothing and so on.
N
NHBRC
The National Home Builders Registration Council ensures that builders extend their commitment to customers by providing a five-year warranty.
O
Occupation This is the date the buyer moves into the property.
Occupational Rent If the buyer decides to move into the property before transfer of ownership takes place, then an agreed amount of rentail will be paid by the buyer to the seller.
Offer to Purchase
This is an agreement between a buyer and a seller. It sets out the main terms of what has been agreed such as the address, the price, the names of the parties. It also deals with what happens if something goes wrong. Some contracts have to be written in order to be binding (a contract for the sale of land for example must be in writing and signed by both the buyer and the seller).
Also called Agreement of Sale, Contract of Sale, Purchase Agreement, Deed of Sale. (See Information Required in a Deed of Sale)
P
Perpetuity For Ever. Sometimes properties are said to be “Held in perpetuity”.
Posession Possession is when the Purchaser takes over legal control of the premises. There is a distinction from Occupation as only an owner or potential owner can possess, whereas a tenant can occupy without any intention of owning the property.
Power of Attorney
The person to whom rights are granted in a power of attorney. A Power of Attorney is a written document whereby a person gives another person the power to act on his/her behalf. It would enable them to open bank accounts, buy and sell shares, buy and sell immovable property and generally carry out your business on your behalf.
A Power of Attorney:
*
can be terminated/changed at anytime
*
their powers can be limited and;
*
terminate on the death of the principal
Purchase Agreement
This is an agreement between a buyer and a seller. It sets out the main terms of what has been agreed such as the address, the price, the names of the parties. It also deals with what happens if something goes wrong. Some contracts have to be written in order to be binding (a contract for the sale of land for example must be in writing and signed by both the buyer and the seller).
Also called Agreement of Sale, Contract of Sale, Offer to Purchase, Deed of Sale. (See Information Required on a Deed of Sale)
Q
R
Registration Registration of Transfer is the South African method of recording transfer of property in the Deeds Office and ensuring that you own your home. (See Steps in the Transfer Process)
Repossession (or Foreclosure) Legal process by which a mortgaged property may be sold to pay off a mortgage loan that is in default.
S
Sectional Title
This is an entire complex (flats and townhouses) divided into individual units which are then sold separately.
A sectional title development will include sections (which are available for sale by way of sectional title), common property, such as stairways and lifts, which will be owned by all the section owners jointly, and exclusive use areas which are portions of the common property which have been demarcated and may only be used by the owner of a particular section.
All section owners become members of a Body Corporate, which is the governing body of the sectional title scheme. The Body Corporate will usually meet once a year to elect trustees, who form the executive of the sectional title scheme. They will attend to the day-to-day running of complex e.g. employment of maintenance staff, upkeep and collection of levies.
In a sectional title scheme, levies replace municipal rates or rental and are payable monthly by each section owner to the Body Corporate. They are used by the Body Corporate to meet the costs of running the scheme e.g. payment of municipal rates, security and upkeep of common areas.
Servitude
A servitude is a right to access which allows a local authority access to a property for inspection or installation of pipes, sewerage lines, electricity cables and so on. It is registered against the title deed.
Suspensive Conditions Suspensive Conditions are conditions that have to be met before the sale can be concluded. The most common suspensive condition is making the deed of sale subject to the sale of the purchaser’s existing property. This means that the transfer of the purchaser’s property has to be done before (or simultaneously) with the transfer of your property. Suspensive Conditions will delay you getting your money from the sale, which is why you need a conveyancing lawyer to look at your Deed of Sale. (See Selling a Home – Tips)
T
Title Deeds These documents act as evidence that the person selling the property actually owns it. Title Deeds also set out any rights or obligations that affect the property. If you have a mortgage then your bank will hold your title deeds.
Transfer The act of acquiring ownership of a property. Ownership of a property is transferred to you and your ownership is then registered in the deeds registry.
Transfer Duty A tax payable to the Receiver of Revenue on the registration of transfer of immovable property. (See Conveyancing Fees and Taxes)
Transfer Attorney The lawyer (or Conveyancer) who handles the transfer of the property from the seller to the buyer. The Transfer Lawyer is usually appointed by the seller. (See Buying or Selling a House – Conveyancing 101)
Trust
If a house, money, shares etc. are held ‘in Trust’ for someone it means that the asset(s) are being looked after by trustees. A trust will have a beneficiary. There are usually two kinds of beneficiaries: Income Beneficiaries (for whom the income of the Trust property is intended) and Capital Beneficiaries (upon whom the Trust Capital will ultimately devolve upon the happening of a certain event).
Trustee The person or persons who look after (administer) the house, money, shares, etc. that are held in trust. The trustee is not allowed to do anything with the house, money, shares, and they owe a duty of care to the beneficiaries of the trust.
U
V
Voetstoots
This clause is always found in a sale document and means “let the buyer beware”. Voetstoots means that the property is sold as it stands, without any guarantees being given by the Seller as to the condition of the property. The buyer can therefore not be held responsible for such defects at a later stage. All defects must be mentioned to the buyer upfront. If there are any defects in the property of which the seller was unaware, the buyer will acquire the property with such defects.
Note: a voetstsoots clause does not protect the Seller in the case where defects in the property are intentionally hidden in order to mislead the Purchaser. Purchasers should carefully inspect the property and not rely on any oral assurance which is not actually guaranteed. (see Buying a Home – Tips)
W
Waiver of Lien This is a legal document where a contractor waives his common law right to hold control over a property if he is not paid in full.
X
Y
Z
Zoning
The local authority determines the purpose for which your property may be used, for example, residential or business.