How to sell a home – How non-compliance can derail your sale
Selling your home is as exciting as it is stressful. Do you appoint an estate agent or try going solo? Whose offer do you accept if you get multiple offers to purchase? What regulations do you have to comply with before your home can be transferred?
Get compliant before offloading
Electrical Compliance Certificate – The Occupational Health and Safety Act requires the seller to provide the purchaser (or transferring attorney) with an electrical certificate of compliance on date of occupation or registration, whichever is earlier. This certificate certifies that the electrical installation is safe and complies with SABS standards. Although the certificate makes no reference to the working order of the installation or to any appliances such as stoves and geysers, the specific clause relating to electrical compliance certificate in your deed of sale may require that these installations and appliances are in working order, in which case you are obliged to see to this.
If you already have an electrical compliance certificate, it may not be older than two years on date of registration of the property. If any alterations or additions have been made to the electrical installation after the certificate was issued, it becomes void and a new certificate will have to be obtained.
Repairs may be necessary before the electrical compliance certificate can be issued (especially with older houses). To avoid any delay in your transaction we suggest that you obtain the certificate immediately. The purchaser’s bank will also require a copy of the electrical certificate before they will give permission to lodge the documents at the deeds office.
Any qualified electrician can assist you with this and the cost of this certificate and any costs pertaining to the repair of the electrical installation will be for your account.
Electric Fence Compliance Certificate – The Occupational Health and Safety Act requires that when a property with an electric fence is transferred, a certificate certifying that the installation is in accordance with the relevant SABS standards must be delivered by the seller to the purchaser (or transferring attorney). This certificate is in addition to the electrical certificate. It is transferrable but will become void once any alteration or addition to the installation is effected.
Repairs may be necessary before the electric fence compliance certificate can be issued (especially with older houses). To avoid any delay of your transaction we suggest that you obtain the certificate immediately.
You can contact the installer of the electric fence, or any other certified installer to assist you with this certificate. The cost of this certificate and any costs pertaining to the repair of the fence will be for your account.
Gas Certificate – The Occupational Health and Safety Act requires that, if your property is equipped with a gas installation, you must provide the purchaser (or transferring attorney) with a gas certificate before date of occupation or registration, whichever is earlier. This certificate must certify that the gas installation is safe and complies with the relevant SABS standards.
Repairs may be necessary before the gas certificate can be issued (especially with older houses). To avoid any delay in your transaction we suggest that you obtain the certificate immediately.
The company that attended to the gas installation can issue the gas certificate. Alternatively you can contact any institution specialising in the installation of gas equipment, as they can usually issue these certificates.
The cost of this certificate and any costs pertaining to the repair of the gas installation will be for your account.
Plumbing or Water Certificate (only applicable to properties in the Cape Town area) – The issuing of a Plumbing or Water Certificate is regulated by section 14 of the Cape Town Water By-Laws of 2010. These by-laws oblige the seller to obtain a plumbing certificate from a certified plumber. The issuing of such a certificate is a requirement for the successful transfer of properties in the municipal jurisdiction area of the City of Cape Town.
Section 14 of the by-laws further state that the certificate needs to be submitted to the Cape Town Municipality before the municipality will issue the clearance certificate with regards to the relevant property. If the seller fails to submit the certificate, he or she may be found guilty of an offence and a penalty may be imposed.
A plumbing certificate guarantees the following:
- That the water installation conforms to the National Building Regulations and the By-laws;
- That the installation has no defects;
- That the water meter is in a working condition and that it registers when there is water running;
- That there is no discharge of storm water in the sewer system.
- The costs of issuing the certificate, or any other costs relating to repairs that need to be done before the certificate is issued, will be for the seller’s account.
Beetle Certificate (only applicable to properties situated in coastal areas) – Purchase agreements for property in coastal areas usually contain a clause that a beetle certificate must be obtained.
This certificate guarantees the absence of beetles in or on the property. It is important to ensure that the certificate includes a guarantee with regards to all beetles and not only a specific species of beetle.
If the purchase agreement states that such a certificate must be handed to the purchaser and the transfer attorneys fails to obtain the certificate, the attorneys can be held liable for negligence. It may also be that the purchaser’s bank requires such a certificate prior to registration of the transaction at the deeds office. If this is the situation it will be best to ensure that the certificate is issued as soon as possible and handed over to the transferring attorneys to avoid any delay in the transfer process.
The costs for the certificate, and any/or other costs relating to the extermination of beetles will be for the seller’s account.
Declaration regarding Invasive Species – In terms of Section 29(3) of the Alien and Invasive Species regulations of 2014 the seller has to notify the purchaser in writing, prior to conclusion of the sale of agreement, of the presence of any of the listed invasive species on the property. The list can be viewed on the Invasive Species of South Africa’s (ISSA) website.
Your property cannot be transferred at the deeds office without proof (known as a clearance certificate) that the city council account has been paid up in advance.
The transferring attorney applies for the clearance figure, which includes all rates and taxes and charges for utilities in arrears, as well as an advance payment for four months. After payment of the clearance figure to the city council on behalf of the seller has been made, a clearance certificate is issued.
If your account is in arrears you should let us provide you with a figure that includes all arrears and required advances rather than paying only the arrears to the city council yourself.
The city council often experiences delays in updating the necessary journals to reflect the arrears payment. Your transaction may therefore be delayed should we have to wait for the city council to issue the correct figures.
As with your city council account, your property cannot be transferred without proof from the HOA and/or body corporate that the levies (where applicable) have been paid in advance.
The transferring attorney applies to the HOA/body corporate to issue the clearance figure, which includes the levies in arrears as well as an advance payment. After payment of the clearance figure on behalf of the seller to the HOA/body corporate, a clearance certificate is issued.
If you are in arrears with your levies at the body corporate or HOA, wait for us to provide you with a figure that includes all the arrears and advance payments required rather than pay the arrears yourself. This will ensure there are no unnecessary delays in the process as we are able to settle the full amount required in one payment.
Occupation and occupational rent
The term “occupational interest” refers to the rent (interest) payable by either of the parties occupying the property while it is registered in the name of the other party. In normal circumstances it will be the purchaser who pays occupational rent to the seller if the property is occupied before date of registration.
There is no established rule as to what the occupational rent amount should be and it is therefore negotiable between the parties. Once you have agreed on the amount payable as occupational rent, you are legally bound to that amount. It is therefore imperative that you apply your mind to this issue before accepting the offer.
The term occupation refers to the date on which you as the seller are obliged to give vacant possession of the property to the purchaser.
Guard against agreeing to occupation in the deed of sale if you do not feel comfortable with the date or if you feel that you are not contractually protected. Once you have agreed in the deed of sale to give occupation on a specific date, you are contractually and legally bound to that date. It is therefore imperative that you apply your mind to this issue before accepting the offer. The eviction of occupants, should the transaction not proceed, is a costly and time consuming exercise.
Although most sellers agree to give occupation only on date of registration, this date is inevitably altered and fixed by agreement at a later stage. For purposes of clarity, we therefore suggest that you agree on the amount of occupational rent in the deed of sale, regardless of whether at acceptance of the offer it is envisaged that the occupation date will only be on the date of registration or not.
Next time: Don’t cancel your insurance prematurely; choosing your mandate; and paying the relevant commission