Asked by the Customer on 23-01-2016 15:28:54
Question posted in the Property Law category relating to Gauteng
Question posted in the Property Law category relating to Gauteng
I put in an offer to purchase on a property in August 2015. It was a cash offer, and paid in full by the end of September. Along with this, I have already paid conveyancing fees in full. To date (ie. January 2016), there has been a back and forth process with the seller's bond cancellation on the property. The bank has been workng on restructuring his finance facility and has now stated that, in order to do so, they need to carry out a valuation. Is this a reasonable amount of time? The seller is frustrated at the delays as well, and the agent has been very active in trying to mobilise the bank, but it is still not clear how much longer this restructuring process on the loan facility will take. Do I have the option of claiming Mora or withdrawing my offer? I have looked through the contract and there is no suspensive clause in respect of delays but there is a standard Mora provision. If I can withdraw, am I liable to lose all of the attorney's fees even though there have been no transfer services rendered? Also, can I claim the interest from the trust account? I am prepared to wait a few more weeks, but after that, I would need to seriously consider withdrawing and asking for my money back.
Message from the Attorney
Posted by Att. Patrick on 23-01-2016 18:15:10
Hi there and thank you for your enquiry,
First, if you are talking about the seller's bond Attorneys, do you mean the bond Attorneys in respect of a new property that the seller is purchasing, or the seller's bond cancellation Attorneys in respect of this property that the seller is selling?
If it is the bond cancellation Attorneys, there is really no justifiable reason why there should be a delay, especially since your offer is a cash offer. Any delay would be the fault of the seller, as it is his attorney (even though it really his banks Attorneys) who is delaying the transfer.
If it is the seller's bond Attorneys for a new property that the seller is purchasing, then there is even less of a justifiable reason why this should delay your transfer. Still the seller's fault.
Can I assume that your sale agreement says that transfer must take place "as soon as possible", or words to that effect?
The question then becomes "what is a reasonable time period for transfer to take place?"
From what you've explained it sounds to me as if the time period is now bordering on the unreasonable. Especially since you've complied with all of your obligations in terms of payment.
If you are thinking about cancellation, then I would advise you to write a letter of demand to the seller, with a copy to his attorney (the conveyancing Attorneys) advising that you consider that the transfer is now taking an unreasonable amount of time, and advise that if transfer does not take place by the end of February (or if you're happy to wait a little longer say so) then you are reserving your rights to cancel the sale agreement as a result of the breach by the seller.
If the bank wants to do a valuation on the property, say in the letter that you think it reasonable that it should be done within the next 3 working days. My bank did a valuation on my property in 2 days flat, so it can be done...
You should also ask that they give you a written report each week updating you on the status of the transfer.
Then, if they don't comply, you would write a second letter referring to the first advising that you have considered the seller's conduct in this matter as a repudiation of his obligations, and a breach of the agreement, and that you are accepting the repudiation and are cancelling the sale.
Then demand the repayment of your money, together with ALL of the interest, plus a full reconciliation of all interest earned on the money while invested in an interest bearing account, plus the conveyancing fees.
You are entitled to all of the interest, as it remains your money until date of transfer.
You are also entitled to the conveyancing charges returned because the transfer was never effected.
You will also be entitled to a refund of any transfer duty that you've paid to SARS.
Obviously adjust any time period in your letters as you feel comfortable.
I hope that this has assisted? Please let me know if you need any further information or advice.
First, if you are talking about the seller's bond Attorneys, do you mean the bond Attorneys in respect of a new property that the seller is purchasing, or the seller's bond cancellation Attorneys in respect of this property that the seller is selling?
If it is the bond cancellation Attorneys, there is really no justifiable reason why there should be a delay, especially since your offer is a cash offer. Any delay would be the fault of the seller, as it is his attorney (even though it really his banks Attorneys) who is delaying the transfer.
If it is the seller's bond Attorneys for a new property that the seller is purchasing, then there is even less of a justifiable reason why this should delay your transfer. Still the seller's fault.
Can I assume that your sale agreement says that transfer must take place "as soon as possible", or words to that effect?
The question then becomes "what is a reasonable time period for transfer to take place?"
From what you've explained it sounds to me as if the time period is now bordering on the unreasonable. Especially since you've complied with all of your obligations in terms of payment.
If you are thinking about cancellation, then I would advise you to write a letter of demand to the seller, with a copy to his attorney (the conveyancing Attorneys) advising that you consider that the transfer is now taking an unreasonable amount of time, and advise that if transfer does not take place by the end of February (or if you're happy to wait a little longer say so) then you are reserving your rights to cancel the sale agreement as a result of the breach by the seller.
If the bank wants to do a valuation on the property, say in the letter that you think it reasonable that it should be done within the next 3 working days. My bank did a valuation on my property in 2 days flat, so it can be done...
You should also ask that they give you a written report each week updating you on the status of the transfer.
Then, if they don't comply, you would write a second letter referring to the first advising that you have considered the seller's conduct in this matter as a repudiation of his obligations, and a breach of the agreement, and that you are accepting the repudiation and are cancelling the sale.
Then demand the repayment of your money, together with ALL of the interest, plus a full reconciliation of all interest earned on the money while invested in an interest bearing account, plus the conveyancing fees.
You are entitled to all of the interest, as it remains your money until date of transfer.
You are also entitled to the conveyancing charges returned because the transfer was never effected.
You will also be entitled to a refund of any transfer duty that you've paid to SARS.
Obviously adjust any time period in your letters as you feel comfortable.
I hope that this has assisted? Please let me know if you need any further information or advice.
Answer Accepted
This answer was accepted on 23-01-2016 19:11:22
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