Selling Immovable Property in South Africa: A Comprehensive Guide

The Legal Steps of Selling a Property

So you have decided to sell your property - now what?

Selling immovable property in South Africa can be a complex and challenging process. It's essential to understand the legal requirements, taxes, fees and tips for a successful sale. In this blog post, we'll provide a comprehensive guide on selling immovable property in South Africa, including legal requirements, taxes, fees and tips for a successful sale.

Step 1: Advertising and Marketing Your Property

• First you will need to decide whether you will attempt to sell your property yourself (i.e. a private sale) or via an estate agency (i.e. a mandate sale).

• If you are appointing an estate agency, you will have to decide whether you will be giving them a sole (i.e. exclusive) mandate to sell your property. The appointment of an estate agency will require you to enter into a mandate agreement.

• Your property is then marketed via advertisements, etc. to potential buyers which can last for a few days, weeks or months.

• It is advisable to prepare a detailed and comprehensive disclosure document for potential buyers which contains all they need to know about your property's true condition (e.g. all potential flaws, issues, etc.). A disclosure document helps prevent any disputes after the transfer date.

• If a mortgage bond is registered over your property, you as the seller must notify the bank of your plan to sell the property and cancel the mortgage bond in order to avoid paying a 90-day penalty interest.

Step 2: Offer to Purchase

• When a potential buyer is interested in buying your property, they will provide you with an Offer to Purchase (a.k.a. “OTP”) for your consideration. and signature if they decide to buy your property.

• The offer to purchase should be carefully read by you and if necessary, legal counsel should be sought before signing. The disclosure document provided to the buyer should form part of and be attached to the OTP.

• If the offer and its terms are acceptable to you, you will then accept the offer by signing the OTP. It is important that the disclosure document must still be true and correct in all respects at the time that the parties sign the OTP.

• Once the OTP is signed, a legally binding and enforceable contract comes into existence and then, either you or your estate agent must instruct a conveyancer (i.e. a trained attorney with extra qualifications) to handle the transfer of the property from yourself to the buyer.

Step 3: The Transfer Process

• To speed up the transfer process, it is essential that your conveyancer receives the necessary and required information and papers as soon as possible and which information includes, inter alia:

  • Copy of ID/Passport/Registration

  • Proof of Residence/Registered Address by way of a Municipal Account

  • SARS Income Tax Number

  • Current Bond Account Number for Bond registered over property sold (if applicable)

  • If a married individual, then a copy of your Marriage Certificate and Antenuptial Contact (if registered)

  • municipal clearance certificate

  • Compliance Certificates (electrical, gas, electric fence and entomology, as applicable)

• During the transfer process and up until the moment the transfer is registered, you (i.e. as the Seller) are required to continue making regular and necessary payments in respect of the property (e.g. mortgage bond installments, rates and taxes, etc.)

• Your municipal clearance certificate must be valid until the date of registration of the transfer, as well as clearance from, if applicable your body corporate and/or home owners association.

• The payment for your Compliance Certificates (electrical, gas, electric fence, and entomology, as applicable), Estate Agent's Commission (if applicable), Bond Cancellation Costs (if applicable) and other fees must be made in advance.

Step 4: Registration of Transfer

• Unless otherwise specified in the OTP, the Buyer is entitled to take occupation on the date on which the transfer of the property is registered at the Deeds Office.

Legal Requirements for Selling Immovable Property in South Africa

Selling immovable property in South Africa involves several legal requirements, including:

1. Title Deed: The seller must have a valid title deed for the property.

2. Compliance Certificate: The seller must provide a valid electrical compliance certificate and gas certificate if applicable.

3. Rates and Taxes: The seller must ensure that all rates and taxes are up to date and paid in full.

4. Bond Cancellation: If there is an outstanding bond on the property, the seller must arrange for its cancellation.

5. Transfer of Ownership: The seller must arrange for the transfer of ownership to the buyer through a conveyancer.

Taxes and Fees for Selling Immovable Property in South Africa

Selling immovable property in South Africa also involves several taxes and fees, including:

1. Capital Gains Tax: The seller may be liable for capital gains tax on the sale of the property.

2. Transfer Duty: The buyer is responsible for paying transfer duty, which is based on the value of the property.

3. Conveyancing Fees: The seller is responsible for paying conveyancing fees to the conveyancer for transferring ownership of the property.

4. Estate Agent Commission: The seller may also be responsible for paying estate agent commission if they use an agent to sell the property.

Tips for a Successful Sale of Immovable Property in South Africa

To have a successful sale of immovable property in South Africa, consider these tips:

1. Price the Property Correctly: Research the market and price the property correctly to attract potential buyers.

2. Market Effectively: Use various marketing channels, such as online listings, signage, and word of mouth, to reach potential buyers.

3. Ensure the Property is in Good Condition: Make necessary repairs and renovations to improve the property's appearance and functionality.

4. Hire a Professional Conveyancer: Hire a professional conveyancer to handle the legal aspects of the sale.

5. Be Prepared to Negotiate: Be willing to negotiate with potential buyers to reach a mutually beneficial agreement.

Conclusion

Selling immovable property in South Africa involves several legal requirements, taxes, fees, and tips for a successful sale. To have a successful sale, it's essential to understand the legal requirements, taxes, and fees involved in the sale, and to follow the tips for a successful sale. By doing so, you can maximize the value of your property and ensure a smooth and efficient sale process.

If you need assistance with a property dispute matter, contact our offices today to schedule a consultation with one of our specialist property law attorneys. Alternatively, you can schedule a consultation online by using the following link Book An Online Consultation.