Some 60% of property sale transactions are delayed at some point in the process and this can cause serious problems, especially where alternative accommodation or a move to another area are involved, says Tony Clarke, Managing Director of Rawson Properties.
'These days,' said Clarke, 'it can take three to four months to transfer a property. This is nearly double the average time taken five years ago'
What are the more common causes of these annoying time lags?
In many cases, said Clarke, they are the result of one or other party simply not realising how important a signature is and taking far too long to deal with this matter.
In other cases, he said, the banks can be very slow moving.
'With the banks now applying such tough rulings to bond grants, it can easily take 20 days to get a bond approval, even where the applicant has pre-qualified'
Then, too, if the seller is not fully paid up on his rates and taxes, the municipality will not issue a Clearance Certificate - without which no transfer can take place.
Similarly, if the seller of a sectional title unit has fallen behind on his levy payments, he will not be able to rectify the matter until he has paid the sums owing and received a Clearance Certificate from the body corporate. In some cases, said Clarke, he will have paid what is owing on levies but his managing agents accounts will not be up-to-date, again causing frustrating delays.
Sellers who neglect at the outset to inform their banks of their intention to sell (and therefore cancel their bond) will find that they were expected to give three months notice of the bond cancellation. For this reason, sellers sometimes try to hold back the transfer until this three month period has expired. If they fail to do this they will be expected to pay a full three months interest on the bond.
Some sellers, said Clarke, are hesitant about giving a sale warning to their banks because they fear that it will result in the bond being cancelled whether they sell or not. This fear, however, is groundless because the cancellation is wholly dependent on the sale being achieved.
Delays can also be caused by buyers who fail to give the bank the information they require, resulting again in delays and in some cases the eventual rejection of the application. Self-employed people, said Clarke, have to be particularly careful about their bond applications and give the banks a full years review of their bank account as well as certain other documentation (which varies from bank to bank).
Inaccurate information on the sale agreement, sometimes the result of inefficient estate agency note taking, can also regularly cause delays to transfers.
It is quite surprising, said Clarke, how often inaccuracies such as giving the wrong erf number or identity numbers can and do occur.
It is also quite frequently happens that, where one of the parties involved is a company, a trust or a close corporation, a divorced co-owner or a co-inheritor of a deceased estate, extra signatures will be required - and collecting these can be very time-consuming.
In one case with which he was involved, said Clarke, a spouse whose husband died intestate inherited 50% of the property, while the children were given the remainder. Although they then verbally agreed to cede their half to their mother, it took almost a year to get their signatures as they were now living in different parts of the world.
If the seller has a tenant in his property, he has to give him due notice of the fact that his lease will not be renewed when it expires - and he is entitled to stay there until then. If he is on one or two months notice, this must also be given before the new owner can take occupation.
With delays cropping up so commonly, said Clarke, sellers and buyers should try not to commit too closely to move times and should keep their arrangements as flexible as possible. If they do not, he said, they could well end up having to handle two moves, the first to live in temporary accommodation before moving on to their final destination. This can add to the expense and stress of any property sale.
For further information contact Tony Clarke on 021 658 7100 or email tony@rawsonproperties.com.
