The property industry is in constant change and flux and is more and more regulated by new and changing legislation and by-laws. This includes obligations and rights of sellers to obtain certificates required for transfers that can result in claims and damages – even after the property was registered in the name of the purchaser Standard pro forma agreements do not cater for these liabilities, rights and obligations. It is more often incomplete or silent about the legal obligations, including but not limited to the following:  That the seller can appoint his own attorney/conveyancer; that the seller should have approved building plans for all improvements at a property prior to transfer; that Estate Agents and their agencies should to be registered at the EAAB and in possession of valid fidelity fund certificates to be entitled to commission; that the parties should meet the requirements of SPLUMA (Spatial Planning and Land Use Management Act), and related matters.

Sellers are obliged to have building plans for all improvements at a property, and to obtain (as the case may be) compliance certificates for electricity installations, electric fences, gas installations, clearance certificates and SPLUMA “Spatial Planning and Land Use Management”) from the local authorities (as the case may be) and from the Body Corporate. These are to be issued by authorised and registered officials as the case may be, and should be valid on date of transfer of the property in the name of the property. If bonds are registered, Banks can also insists on additional requirements. For farms notices to the Land Claims Commission may be required, applicable water rights certificates, and a valid electricity compliance certificate is required to transfer the Eskom accounts.

A SPLUMA certificate is issued by your local Municipality and it certifies that any improvements and additions that were done to the property have been approved in accordance with local bylaws. This includes that there is at least “as is” approved building plans for all improvements made on the property, that the property is correctly zoned, that there are no unregistered servitudes over the property, and that all improvements are within the surveyed beacons and borders of the stand. This is to be obtained and secured by the seller on the costs of the seller prior to registration of the property in the name of the purchaser. It is more often than not a time consuming process, as different departments and officials of the municipality are to attend to and certify if the requirements are met. The fact that a certificate was issued is not a guarantee that the requirements have been met. Without the certificate the property will not be registered at the Deeds Office (if and when applicable).

Sellers should rather use proper and comprehensive agreements prepared by property lawyers and conveyancers than standard agreements, to make sure they address and meet all the requirements imposed by legislation and bylaws. As soon as the agreements are signed the parties are bound to the written agreements. Note that electronic signature are presently not accepted in agreements for the sale of immovable property. It is the prerogative and right (and best practice) for sellers to appoint their own lawyer (and not to blindly accept the lawyers recommended by estate agents and purchasers), to ensure no conflict of interests nor delays, should there be defaults and omissions. Sellers have to obtain all the certificates imposed by law (which may be costly in the case of SPLUMA certificates, to be requested preferably even before the property is sold). Should the property be sold by estate agents, the sellers should verify if the agent is registered at the EAAB and in possession of a fidelity fund certificate, being the industry requirements before agents may claim commission.

Purchaser should rather use proper and comprehensive agreements prepared by property lawyers and conveyancers than standard agreements, to make sure they address and meet all the requirements imposed by legislation and bylaws. As soon as the agreements are signed the parties are bound to the written agreements. Note that electronic signature are presently not accepted in agreements for the sale of immovable property. Sellers have to obtain all the certificates imposed by law (which may be costly in the case of SPLUMA certificates, to be requested preferably even before the property is sold). Should the property be sold by estate agents, the purchaser should verify if the agent is registered at the EAAB and in possession of a fidelity fund certificate, being the industry requirements before agents may claim commission. Purchaser will be wise to insist on approved building plans copies prior to signing of agreements, to be shown all blatant and silent defects of the property by the seller (to be recorded), the status of water rights certificates and land claims (if applicable). If the seller is a company or close corporation, the legal entity should be in business as deregistered legal entities can give effect to transfers. If the buildings were completed less than five years before it is acquired, it will be wise to find out if the improvements were done by a builder that is registered at the NHBRC and if the property was enrolled for these purposes.

The Financial Intelligence Centre Act (FICA), came into effect on 1 July 2003, and was FICA introduced to fight financial crime, including money laundering, tax evasion, and terrorist financing activities. Customers and clients and lawyers have to meet the requirements as stipulated in the legislation that are designed to reveal the movement of moneys derived from unlawful activities, thereby curbing money laundering and other criminal activities, including to keep records and report certain transactions.

The Protection of Personal Information Act (or POPI Act) is South Africa’s equivalent of the EU GDPR. It sets some conditions for responsible parties (called controllers in other jurisdictions) to lawfully process the personal information of data subjects (both natural and juristic persons). Information shared by clients and customers are limited to the purposes for which it is obtained only and not be shared without prior consent, subject to the legislation. The legislation considers personal information to be “precious goods” and therefore aims to bestow upon certain rights of protection over personal information.

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