All too often conveyancers, the Deeds Office or the City Council are blamed for the delays in transferring properties. In many cases this criticism is well founded, however often delays can be prevented if sellers and conveyancers take certain steps before the property is sold. However sellers are often not aware of these steps.
Any person contemplating selling their home should be advised to check that these steps have been taken and should prepare themselves before they become an issue as the idea that they can somehow be sorted as the sale progresses is almost invariably wrong – in most cases going ahead without observing these essential issues may delay and quite possibly jeopardize the sale agreement.
The recommended steps are as follows:
- Ensure that all rates are paid up. The City Council will not issue a rates clearance certificate until all outstanding rates and services have been paid, together with the payment of advance rates and services. A property cannot be transferred without a valid rates clearance certificate. All too often the seller is in arrears with their rates or cannot afford payment of the advance amount required. The seller will then either have to obtain bridging finance or make a short term loan from their bank, family or friends. This will in no doubt delay the transfer.
- If there is no bond, ensure that you have the property’s original title deeds. (If there is a bond the original will be lodged with the bank). Title deeds have an unfortunate tendency to be filed somewhere and then simply disappear. If they are lost the conveyancer will need to apply for a copy at the Deeds Office, which costs money and takes time. Be sure therefore, as a seller, to take note of the whereabouts of your original Title Deed and, if you cannot find it, immediately instruct a conveyancer to apply for a registration copy at the Deeds Office to avoid potential delays.
- If your home is bonded, ensure that all the payments on the bond are met and paid up and, equally important, give the bank sufficient notice that you intend to sell and to cancel the bond. If this is not done the bank is entitled to charge a penalty for early termination of the bond. Furthermore if you, as the seller, are aware that your bond settlement, together with all other costs, will be more than the purchase price (and result in a shortfall situation), then please make the conveyancer aware of this fact as soon as possible so that the necessary steps can be taken with the bank.
- If the unit is part of a sectional title complex, make sure that you have a copy of the latest financial statements (annual accounts) and the management and conduct rules of the body corporate before you sell your unit. Often a purchaser would want sight of these before they put in an offer, but more importantly, the bank that the purchaser has applied to for a bond would require these before they grant the loan. In some cases the body corporate’s financials are not up-to-date and this may lead to the deal not going through. So, it is important, as a seller, to do your homework before you sell your unit.
- If you are selling property in a sectional title unit, gated community or any similar development where levies are payable and/or certain living and design guidelines apply, it is essential to sort out with the home owners association or body corporate or whatever other body any issues that may exist before signing a sale document. More often than not there is a title deed requirement that such an association must consent to the sale. If there is a dispute between the association and you the seller, they may be entitled to withhold such consent until the dispute is resolved to their satisfaction. Therefore sellers should make sure that they either have a clean slate with their body corporate or home owners association or that they take the necessary action to sort out the issues before the property is sold. It would be unfair to a good faith purchaser for a transfer to be delayed due to an existing dispute between the seller and the association.
- Make the necessary plans to ensure that you move out of the sold home on the agreed date and do not try to delay this, especially at the last minute. The problems late handovers can cause to the buyer, who has probably vacated his previous premises on time, can be very serious.
The above list is not exhaustive, but deals with those issues that regularly cause delays. These steps are also not applicable to all sellers in every situation. The underlying principle is that a prepared seller is an essential ingredient to a smooth and successful transfer process.