- So you can afford the purchase price but what about the hidden costs such as VAT and transfer duty? When determining whether you can afford the purchase price ascertain whether the sale will be subject to VAT or transfer duty and what is the implication in terms of your free cash that you need to pay all the extra costs outside of the purchase price. In certain circumstances the property transaction can be zero rated for VAT – take advice if you are not sure.
- Normally the seller will nominate the transferring attorney (conveyancer) but you will need to pay their fees. These fees are set according to a recommended tariff. Ask the conveyancer to consider offering a discount on the recommended tariff. No harm in asking and in many cases the conveyancer will discount their fees.
- Ask for a copy of the latest utilities account from the seller or from the Body Corporate if the unit is in a sectional title development. If it is a sectional title unit or home owners association check whether there are any anticipated special levies that may be passed in the near future or you could be in for a nasty surprise if your block of flats requires a new roof or other major structural work.
- Ensure that you check whether a sectional title scheme has a notarial right to extend still registered in favour of the developer or you could be in for surprise when a new block is built in front of your unit that obstructs your view!
- Check the title deed and look for restrictive conditions and servitudes or your neighbour may have a right to access your property.
- Also check the zoning of the property and if sectional title, make sure that you read the body corporate rules that you will need to adhere to after you purchase the property. If for example you intend to rent out the property via Airbnb you could find that these rules prevent you from doing so.
- If you are buying an older property check whether it is subject to heritage requirements and also ask the seller if the property has been before heritage previously. Heritage approval can hold up a proposed alteration by many months. As a purchaser try and negotiate that the sale is conditional upon the heritage approval being obtained within an agreed period.
- Ensure that you have checked the boundaries of the property and that there is no encroachment. If you are not sure then obtain the services of a qualified surveyor to assist you in locating the boundary pegs.
- Make sure that you have inserted a clause in your deed of sale that the buildings have been erected by the purchaser in accordance with approved building plans or you could land up with large delays in having new building plans approved in the future.
- If an agent has facilitated the property transaction then ensure that you amend the agreement of sale to allow the conveyancer to only pay the agents commission on transfer so should the sale not proceed for whatever reason then no agents commission will be payable by either the seller of the purchaser.
This checklist is by no means exhaustive as every property transaction has its own nuances. If you are the purchaser, make sure that you seek independent legal advice before signing the agreement of sale. Remember the transferring attorney, if appointed by the seller, is not acting in your interests but that of the seller.
This article should not be used or relied upon as professional advice and is for information and marketing purposes. Please consult with one of our attorneys should you need legal assistance relating to this area of law.