Property transactions must be transparent
Property Transaction Kit (PTK) is a new service that purports to protect all parties during a property transaction, ensuring compliance with the Consumer Protection Act (CPA). If you’ve had your fingers burnt buying or selling a property, this will be a welcome development.
The brainchild of conveyancing attorney Meyer de Waal, who is also behind the rent-to-buy concept here in South Africa, PTK makes life easier for buyers, sellers and estate agents.
It allows all parties to compile or have secure online access to all the documentation and certificates of compliance that related to the sale of a property.
Once the seller registers for the services, for example, a PTK “team” will access a database of accredited services providers to put together information and issue certificates of compliance.
These documents will be loaded onto a virtual “property vault” and the seller, his or her estate agent, the buyer, the attorney or bank can all access the information.
This makes the process transparent to everyone, which means there’s less chance of non-compliance with the CPA and any related fall-out.
Sellers and estate agents often sold properties voetstoots, meaning that if the buyer came across defects the seller didn’t know about, the buyer had to accept those defects and fork out to make necessary repairs. Buyers didn’t always have the knowledge or experience to ask key questions either, so they often neglected to ask for a copy of the title deed, current and approved building plans or zoning certificates.
But now the process will have to be far more transparent so buyers are not left with greater financial burdens than they were prepared to take on. Consumer protection laws are in place to make sure this doesn’t happen and the PTK will assist.
After viewing reports online, the seller can either choose to improve the property or disclose the true condition of the property to the buyer, de Waal says. Potential buyers can request access to this report to help them to decide whether or not to put in an offer on the property.
What are the implications for sellers?
Sellers are often in a rush to sell their properties, but don’t think of the impact of the costs repairs relating to plumbing, beetle damage, electrical faults and so on. Now property buyers can hold sellers and their estate agents responsible for defects or non-disclosure of property faults, even months after taking ownership.
Sellers have to make sure that properties are inspected and evaluated by accredited service providers and these results must be made available to potential buyers. The buyer has to agree to purchase the property in that condition, if they wish, or they can ask that the seller repair these faults before they sign a Deed of Sale.
What are the implications for buyers?
Buyers, who are usually led by the emotions of buying a new home, don’t always focus on the administrative details of a transaction. They are often unaware that they can get hold of due diligence information on a property.
Buyers have the right to information that will help them to make an informed decision about a property. But they have just as much responsibility to request the required documentation from the seller. Once presented with all the facts, the buyer can then decide to buy the property as is, ask the seller to adjust the asking price, or ask the seller to repair the faults to the property and cover those costs.
Having this information about the property will also help them when it comes to applying for a home loan because banks consider things like the structural condition and construction of a property according to approved building plans when granting a loan.
What are the implications for estate agents?
Sale agreements must be prepared in simple and understandable language. A buyer with average comprehension skills and education must be able to understand the sale agreement presented for signature. In many instances, the “voetstoots” clause will also no longer be applicable, as the term “voetstoots” must be explained in simple and clear language to the buyer.
The Property Transaction Kit was launched in the Western Cape on 1 April 2011 and will be rolled out nationally through the association of each institute endorsing the service. For more information, visit propertytransactionkit.co.za.
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