Glossary

Our legal glossary explains various legal terms relating to property buying and selling. Simply click on the letter of the alphabet below, to take you to the relevant term. 

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

B

Bond Attorneys
The conveyancers who will be attending to the registration of the Purchaser's new mortgage bond (instructed by the bank or other financial institution).

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Cancellation / Release Attorneys
Conveyancers attending to the cancellation of the Seller¿s existing bond or the release of the property from the existing bond.

Conveyancer
An attorney specifically qualified to attend to the registration and transfer of immovable property (houses, apartments, land etc) and related matters.

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Domicilium citandi et executandi
Often referred to simply as domicilium. This is the address for service and delivery of documents. Consider carefully which domicilium you give, 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.

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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 be required to furnish such a compliance certificate to the Purchaser. The Seller may have to instruct an electrician to do repairs to the installation before the certificate can be issued.

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Fixtures and fittings
Properties are usually sold with 'all fixtures and fittings in permanent nature'. This sounds simple, but very often problems arise as to what is meant to be included, e.g. is the automatic pool cleaning equipment, curtains and/or chandeliers meant to stay or go? Where any doubt exists, take a little extra time and jot down, in the space provided for additional clauses in the offer to purchase, if you are the Seller, anything you specifically wish to exclude, and if you are the Purchaser, anything you want to specifically ensure is included in the sale. A little extra time spent now will avoid disappointment later on.

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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.

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K

Lodgment
This is the act of handing in the documents at the Deeds office for examination and registration.

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M

N

Occupation
Occupation is the right to physically occupy the property. This usually occurs when the keys are handed over and the Purchaser is actually entitled to move in. Occupation can be 'vacant' or 'subject to existing tenancies'. Vacant occupation means that from that date, the Purchaser can move into the property or put a tenant in, whereas occupation subject to tenancies means that the current tenant will carry on renting from the new owner.

Occupation consideration
Often referred to as 'occupational rental' or 'occupational interest', this is a monthly amount payable by the Purchaser to the Seller for the right to occupy the property prior to the date of registration and transfer of the property into the name of the purchaser. Alternatively, this amount could be payable by the Seller to the purchaser if he/she is allowed to continue occupying the property for a period after registration of transfer. The amount of the occupational consideration should be negotiated by the parties to the agreement. If an estate agent is involved in the transaction, he/she is usually in a good position to assist the parties in reaching agreement in this regard.

Offer to purchase (often referred to as a deed of sale)
This is a document which becomes a binding agreement of sale once signed by both the Purchaser and the Seller.

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Possession
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.

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Q

Rates or levy clearance certificate
A certificate issued by the relevant authority (municipality, town council or sectional title body corporate) stating that the rates or levies have been paid up to a future date in respect of the property.

Registration of Transfer
Registration of Transfer is the South African method of recording in the Deeds Office and ensuring that you own your home. It works as follows :
The completed and signed offer to purchase, together with the Seller's title deed, is handed to a conveyancer. He/she will prepare all the necessary documents that have to be signed by the various parties, will arrange for the Seller¿s rates to be paid up to date, will guarantee payment of the balance of the Seller's bond to the relevant bank, and will obtain a similar guarantee from the bank that will be providing the Purchaser's new bond, attend to the registration of transfer in the Deeds Office and payment of the purchase price to the seller

Risk
This is all the good and bad that can happen to the property. From the date on which risk passes, the Purchaser benefits / loses. For example, gold was found on the property after risk has passed, the Purchaser benefits. Much more important, if the house burns down after risk has passed, it would be the Purchaser's loss. It is therefore important that Sellers keep their properties insured until the day risk passes, and Purchasers must make sure that the property is properly insured from that date onwards.

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Sectional Title
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 that 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. Save for extraordinary business, the Body Corporate will meet once a year to elect trustees. The trustees will then form the executive of the sectional title scheme and will attend to the day-to-day running of the affairs of the scheme, such as employment of maintenance staff, upkeep and collection of levies. Levies replace municipal rates or rental and are payable monthly by each section owner to the Body Corporate and are used by the Body Corporate to meet the costs of running the scheme e.g. payment of municipal rates and the upkeep of common areas. Levies are usually set annually. The amount payable by each section owner will vary according to his participation quota. The participation quota is a calculation of the section owner's property vis-a-vis of the entire sectional title scheme. The section owner will be responsible for the costs of maintenance and upkeep of this section and any exclusive use areas he may have, whilst the Body Corporate will be liable for the costs of upkeep and maintenance of the common property.

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Title Deed
This is the document prepared by the conveyancer reflecting the ownership of the property. When a transfer takes place, the existing Title Deed is superceded by the new Title Deed which is executed in the Deeds Office by signature by the converyancer and the Registrar of Deeds. This then becomes the new owner's proof of ownership.

Transfer Duty
Transfer Duty is simply a tax levied on the transfer on the land. It is based either on the actual price paid for the property, or the fair market value thereof, which ever is the higher. For detials of transfer duty, please see the relevant 'Transfer Duty' information in the 'Legal Advice' section of the website. If the purchase price included VAT, no transfer duty is payable (i.e. Transfer Duty and VAT are mutually exclusive).

Trust Account
Attorneys and estate agents are both obliged by their governing bodies to run separate Trust Accounts into which they deposit monies which are being held in Trust for people. Both associations have created a guarantee system to protect members of the public against the misappropriation of their funds by the relevant attorney or estate agent.

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U

Voetstoots
If the property is sold voetstoots, it means it is sold as it stands, without any guarantees being given by the Seller as to the condition of the property etc- and he/she therefore cannot be held responsible for such defects at a later stage. It is important to note, however, that a voetstsoots clause does not protect the Seller in respect of defects in the property of which he/she is aware but intentionally hides in order to mislead the Purchaser. Purchasers should carefully inspect the property and not rely on any verbal assurance which is not actually guaranteed.  

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