Real Estate Investor Magazine South Africa October 2014 | Page 27

RESIDENTIAL

Do your research
The one page information marketing brochure provided
by an estate agent is not comprehensive research.
Buyers should insist on a comparative market analysis
(CMA) and should also do their own research on the
Internet to ensure the property is not overpriced.
Before signing an Offer to Purchase, buyers should
first consult with their attorneys. The attorneys should
at least to go through the sale agreement before it
is signed. We have seen countless sale agreements
with open or blank spaces, no provision for vacant
occupation on transfer or a specific date of occupation.
This could result in buyers ending up with tenants with
a long-term lease occupying their new home.
Buyers should also ask their attorney to scrutinise
the title deeds for onerous conditions and investigate
the diagram of the property prepared by the Surveyor
General’s office as these documents may contain
servitudes or rights in favour of third parties over
the property. The attorneys should also verify on the
sectional title register whether there is a right to
develop further and the status quo of the exclusive
use areas. Often mistakes are made regarding how
the exclusive use areas are owned, as some exclusive
use areas are formally demarcated and a title deed
issued for such right while other exclusive use areas are
allocated according to the rules of the body corporate,
which may have changed.
Investigate potential liabilities
Buyers often assume that when the local municipality
issues a rates clearance certificate it means that all rates
and taxes are paid. In reality, however, the municipality
may have overlooked outstanding rates and taxes bills
that are older than two years. As outstanding rates
and taxes does not prescribe, but remain a debt to
the property (not the previous property owner), new
property owners may well be held responsible for old
rates and taxes that precedes their ownership.
When investing in a sectional title scheme,
information about the financial situation of the body
corporate must be obtained before the sale agreement
is signed. In Angile’s case, for example, the estate agent
verbally confirmed that the financials affairs of the body
corporate are sound. However, despite various requests
to obtain a copy of the financials, Angile had still not
received these four months after signature of the sale
agreement and a month after date of transfer. Little
did Angile know that trustees of a body corporate can
decide to raise additional or special levies. Within
www.reimag.co.za

one month after she became the owner of her new
apartment, she was faced with a special levy to repair
and replace the outside windows of the entire complex.
Protect yourself
Had Angile known better and had she been under less
pressure, she would have made her offe ȁ