There are many means of finding a home for sale in South Africa. The list below includes some of the more popular methods.
Dealing with an estate agent in South Africa is similar to dealing with one in Australia, Europe or the United States: most are well organised and professional and provide excellent service. There are around 36,000 registered estate agents in South Africa, ranging from huge national and international chains to small, local operations. South African estate agents usually work on Saturdays and even on Sundays in some areas during the peak season. The commission charged by estate agents varies, the average being around 7.5 per cent plus Value Added Tax (VAT), which is invariably paid by the seller. Some sellers charge a fixed commission, e.g. R15,000 on properties costing up to R300,000 and up to R65,000 on properties costing up to R2 million. The cheaper the property, the higher the fee tends to be as a percentage of the sale; on the most expensive properties fees tend to be more negotiable. In any case, you are free to negotiate the agent's commission (whether a fixed fee or a percentage). Before using an agent, check whether he ore she makes extra charges (apart from the normal fees and taxes associated with buying a property in South Africa) for services such as additional viewings, checking the property on your behalf, and arranging for the connection of utilities. .
The industry is controlled by the government-established Estate Agency Affairs Board (Tel. 011-880 9994), with which all estate agents must be registered. All agents are issued (annually) with a fidelity fund certificate and must comply with the EAAB's Code of Conduct. A current certificate should be displayed; if it isn't, check with the Board to determine whether an agent is registered. Agents must also have either undertaken an examination course in the principles of estate agency or completed a year's practical training under the guidance of a qualified 'full status' estate agent. Some agents may claim that legal advice is unnecessary or that they provide it themselves, which is both illegal and unethical. You should only deal with registered lawyers, who have professional indemnity insurance. If you have a complaint against an estate agent or believe that he or she has mismanaged your money, you should contact the Board.
Some people use an agent based in their own country with an office in South Africa or who works with one or more South African agents. You may pay higher fees when dealing with a foreign agent, as there may be more people involved and local property owners may inflate the price when they think a "rich" foreigner is interested in buying their home. If you wish to find an agent in a particular town or area, look in the local telephone book or yellow pages or use the Internet. However you choose to buy, make sure that you know the local market value of property, as it's easy to pay over the odds in popular areas.If you are using a foreign agent, confirm (and reconfirm) that a particular property is still for sale as well as he price before travelling to South Africa to view it. Obtain details of as many properties as possible in your chosen area and make a short list of those you wish to view.
Details provided by South African estate agents are usually extensive, although in the case of old properties in need of renovation, there obviously isn't much information that can be given except the land area and the number and size of buildings. Most serious agents have websites providing details of properties they offer (as well as information about the legal and financial aspects of buying and selling property, and quite often general information about life in South Africa), although not all properties are included on them and you may need to register to view those that are. South African agents who advertise in foreign journals or who work closely with overseas agents may provide colour photographs and a full description, particularly for expensive properties. Some South African agents expect customers to know where they want to buy within a 30 to 40km (20 to 25mi) radius and may even expect you to narrow your choice down to certain towns or villages. If you cannot define where and what you are looking for, at least tell the agent so that he will know that you are undecided. If you are 'just looking' (window shopping), say so. Most agents will still be pleased to show you properties, as they're well aware that many people fall in love with (and buy) a property on the spot. A South African agent may ask you to sign a document before showing you any properties; this is simply to protect his or her commission.
you are usually shown properties personally by agents and won't be given the keys (particularly to furnished properties) or be expected to deal with tenants or vendors directly. You should make an appointment to see properties, as agents don't like people simply turning up unnanounced. If you are on holiday, you can drop in unannounced to have a look at what's on offer, but don't expect an agent to show you properties. If you view properties during a holiday, it's wise to do so at the beginning so that you can return later to inspect any you particularly like. If you are shown properties that don't meet your requirements, tell the agent immediately. You can help the agent by telling him or her exactly what's wrong with the properties you reject. It's wise to make notes of both the good and bad features, and take lots of photographs of the properties you like, so that you are able to compare them later at your leisure, but keep a record of which photos are of which house! It's also wise to mark each property on a map so that, should you wish to return, you can find them again.
South Africa's largest estate agents (in alphabetical order) include:
Homenet (different website addresses in different regions)
Pam Golding http://www.pamgolding.co.za
REMAX (different website addresses in different regions)
Seeff Property Services http://www.seeff.com
In South Africa, apartments and townhouses are sometimes part of what are known as sectional title schemes or sectional title development schemes, in accordance with the Sectional Titles Act No 95 of 1986. This means that properties are part of a community, where individuals own their own apartment or house but share common areas, e.g. driveways, gardens, swimming pools, corridors, gardens, lifts (elevators), entrance foyers, parking areas, outer walls, foundations and the roof. In South Africa, a sectional title development is called a 'unit' and an individual property is called a 'section'; to avoid confusion, however, developments will be referred to as 'schemes' and individual properties as 'properties'. Parts of a scheme are sometimes designated as 'exclusive use areas'. These include gardens, patios, parking bays, garages and storerooms. If this is the case, you don't actually own the area concerned but have exclusive use of it.
Under the terms of the 1986 Act, an owner can sell the use of an exclusive use area to another owner in the scheme but not to an outsider. This doesn't apply to owners in schemes registered under the previous (1971) Act. A Section 25 Right To Extend The Scheme, meaning that the developer has reserved the right to add extra buildings or extend existing ones, is quite rare, but you should know about it if it exists, as it might change the nature of the scheme you are thinking of buying into. Upper floor apartments are both colder in winter and warmer in summer and may incur extra charges for the use of lifts. On the other hand, they offer more security than ground floor apartments.If the building has lifts, check whether they're covered by a full maintenance contract, as lift repairs can be very expensive.
Owners in a sectional title scheme must obey common rules. If an owner fails to maintain his property or exclusive use area, the body corporate can carry out the necessary maintenance and repairs, and charge the owner. A body corporate is even allowed to apply to the Supreme Court for an order instructing an owner to comply with a scheme's rules. Most disputes, however, are settled without recourse to such measures. The common property of a sectional title scheme is controlled and run by the scheme's 'body corporate' - the collective name given to all of the owners of properties in a scheme. But the everyday running of the scheme is entrusted to 'trustees', who are appointed by the body corporate. People familiar with Spanish urbanisations will recognise this way of doing things: residents of a group of apartments and/or townhouses appoint a committee with a president (from their own number) to run common affairs. Trustees are almost always owners of properties in a scheme. The minimum number of trustees in each scheme is two, but the Act doesn't specify a maximum number.
Successful trustees have at least basic knowledge of the law, accountancy, electrical and mechanical devices and problems, bookkeeping and general administration. Trustees often receive no payment for their work (except expenses), although the body corporate will sometimes agree to pay a trustee or trustees. Major decisions concerning sectional title schemes are made by the body corporate at an annual meeting, usually called the Annual General Meeting (AGM), or at a Special General Meeting, presided over by the chair of the trustees. These gatherings are held to approve budgets, appoint trustees and consider changes to the rules (provided that these aren't contrary to the intentions and spirit of the Sectional Titles Act). All members of the body corporate are entitled to vote (unless they're in arrears with fee payments or in serious breach of the rules). Unless otherwise decided, an individual owner's voting power is determined by his percentage ownership of the entire scheme (for example, he might own more than one apartment or townhouse) - known as his Participation Quota (PQ).
Running a large sectional title scheme can be complicated and time-consuming. As a result, some bodies corporate appoint a managing agent to carry out some or all of the work - usually a company that specialises in sectional title administration. A managing agent must be registered with the Estate Agents Board and hold a fidelity fund certificate issued by the Board. The managing agent sends out monthly statements of work and accounts, carries out bookkeeping, recovers unpaid debts, arranges quotes for maintenance and repairs, and helps the
trustees with the many tasks involved in administering the scheme. Payment for the administration and running of a sectional title scheme is shared among the owners.
Costs incurred include insurance premiums, repairs and maintenance charges, the wages of cleaning, maintenance and gardening staff, and water and electricity used on the common property. These are paid for by a monthly levy, which every owner must pay. Any costs incurred in the upkeep and maintenance of exclusive use areas are recovered from the user of the area. As well as dealing with these expenses, the body corporate must establish a fund to pay for future maintenance and to cover unexpected expenses. The Sectional Titles Act doesn't specify a size for this fund and doesn't allow any part of it to be refunded; any surplus must be used to subsidise future levies or to improve the common property. In an emergency, the trustees can impose a special levy to cover unforeseen expenses. The Sectional Titles Act requires the body corporate to ensure that the buildings are insured for their replacement cost. This insurance must cover all properties and improvements to the common property but it covers only buildings; individual owners must insure their contents. The premiums are included as part of the monthly levy.
The advantages of owning a community rather than an individual property usually include:
The disadvantages of community properties may include:
Before buying a sectional title property, you should check (or ask your lawyer to check) the following:
Within Johannesburg, there are six steps in a property transaction:
Buyers should also apply for municipal service, while sellers must close the services account if you are the seller once a transaction is settled. A key part of buying or selling property - as far as interaction with the City is concerned - is the clearance process. A Clearance Certificate from the municipality is required before selling any property. The seller is also responsible for making sure that all rates and services have been paid and that the municipal account is up to date before selling the property. This is also the case if a tenant has leased the property. This certificate shows that there are no outstanding municipal charges.
The appointed conveyancing attorney must apply for a Clearance Certificate from the City's Clearance Unit by filling in the required clearance application form. The seller, in turn, must fill in a cancellation of consumer agreement form to have the water and electricity account finalised, and to apply for the deposit to be refunded. In the case of a tenant leasing the property, a cancellation of consumer agreement form must be completed by the tenant. All arrear amounts for the two years proceeding the date of application on the owner and tenant accounts will be included in the clearance figures. Once the Clearance Unit has verified all the information, the conveyancing attorney is informed of the clearance figures. This can take as little as five working days if there are no problems or queries on the account. The clearance figure is the final amount to be paid to settle the account before the City will issue the Clearance Certificate; the certificate indicates that no amount is outstanding on the account and that the account may be closed.
The conveyancer arranges for full and final payment of the account, either in cash or with an attorney trust cheque. The Clearance Certificate is issued within 24 hours of payment and is valid for 120 days. If the sale of property is delayed over the 120 days, the conveyancer has to re-apply for a certificate. Disputes on clearance amounts If you disagree with the clearance amount on your account you must log a query with Joburg Connect on 011 375 5555. Once your query is resolved you can re-submit your application for a Clearance Certificate.
Applying for a Clearance Certificate on a Sectional Title property is different from the process for a freehold property.In the past, accounts for sectional title schemes were sent to the bodies corporate, but this is no longer the case as of 1 July 2008. Holders of Sectional Title properties will receive individual property rates accounts, and they will, therefore, be expected to apply for a Clearance Certificate individually and not through their body corporate. A separate Clearance Certificate should also be requested by the body corporate for services accounts. This is because more than one unit is on the property and water and electricity is usually consumed through a bulk meter rather than individual meters. The application must be made by the existing account holder, which could be the body corporate or homeowners' association. It remains the responsibility of the body corporate or homeowners' association to ensure outstanding monies on services are paid. Before buying a sectional title, ensure that all service charges are paid in full by the body corporate or find out if the services to the unit you are buying are rendered individually.
Once you have bought your property, you should apply for municipal services to your property to be put into your name. Go to your nearest Customer Service Centre and complete the Application for the Supply of Water and Electricity contract. A a deposit of two months estimated consumption for local residents and six months for foreigners is required. Rates accounts will automatically be created in your name, as the new property owner, as soon as transfer is registered at the Deeds Office. All new accounts will be charged a deposit equal to the average consumption of two months' services. Deemed consumption is taken on the history of the previous owner's account, or in the case of a new dwelling, on the township average. Some people will, therefore, pay a larger deposit than others to open their account. Deemed consumption will be averaged on new accounts over the first six months and thereafter they will be automatically regulated. The City will adjust the deposit and reflect it on the account as either a credit or a debit. When a Sectional Title scheme is registered at the Deeds Office, a rates account is automatically opened at the City of Johannesburg. To install new water or sewer connections, go to Joburg Water at Argent House, 21 Loveday Street, Marshalltown, to fill in the application form. The same should be done for electricity connections. Go to City Power at 40 Heronmere Road, Reuven. In both instances an official will visit the property before giving a quote on a connection fee.
The Deeds Office will only register the change in ownership once the Clearance Certificate has been received. The City processes up to 10 000 Clearance Certificates in any given month and it takes up to 30 days from the time the City receives your application for your property to be cleared. Account issues must be resolved and account arrears paid before your request for a Clearance Certificate will be accepted by the City. If you have an account problem, please log a query with Joburg Connect. Required documents include:
If you are applying in the name of a business, a body corporate, or a tenant, additional information is needed:
Since 2006, the City has implemented credit checks for all new account applications. No person or company will be denied the right to open an account to receive basic water and electricity services, or to be billed for rates. However, the City can request additional guarantees over and above the deposit, to cover the assumed risk. The city has developed checklists for buyers and developers of questions to ask when buying into a new development, or when planning a new development.
Checklist of queries for buyers:
The City must issue a Certificate of Occupancy for every building that is built, before it is occupied, as required by the National Building Regulations (NBR) and Building Standards Act. This is to show that all requirements have been met and safeguards the owner or tenant. The Certificate of Occupancy stipulates the type of dwelling - single dwelling, cluster complex, townhouse or complex - and is important when applying for a residential rebate. The responsibility for obtaining a Certificate of Occupancy lies with the property owner and should be obtained at the time of taking ownership of the property. A Certificate of Occupancy is also necessary before water and electricity deposits can be accepted for newly built properties.
A large number of applications are returned because the City has no notification of the existence of the new development. By ensuring that all the relevant information is provided when making an application for Clearance Certificates for new developments or townships, developers are assured of a quick response. Written proof is recommended in each case. This information is required for developers to receive all certificates (section 64 and 82, a Clearance Certificate for less formal township establishment, and a Clearance Certificate in terms of the development facilitation).
Checklist for developers
Specific information required to receive a Clearance Certificate for less formal township establishments (Act 113 of 1991):
Specific information required to receive a Clearance Certificate in terms of the Development Facilitation Act (Act 67 of 1995):