Housing Terminology

Question 1

What is a full title property?

Answer 1

• when the person who buys the property becomes the legal owner of the entire property
• including the land and structures on it

Question 2

What is a sectional title property?

Answer 2

• when the buyer becomes the legal owner of a section of the housing complex
• this unit belongs to the individual homeowners but common areas are jointly owned

Question 3

What is a tenant/lessee?

Answer 3

• a person who rents accommodation

Question 4

What is a landlord/lessor?

Answer 4

• a property owner who is letting a property

Question 5

What is rent?

Answer 5

• the amount a tenant pays every month to the landlord
• to acquire the right to live in the property they are renting

Question 6

What is a lease?

Answer 6

• the agreement between a landlord and a tenant
• a legal document
• once signed, grants the tenant certain legal rights and responsibilities regarding the property
• for however long the lease lasts

Question 7

What is a building contract?

Answer 7

• a written agreement between a landowner and builder
• lists all the terms and conditions
• where the builder undertakes to build a house according to an agreed plan and specifications for a specific price on the stand

Question 8

What is a mandate?

Answer 8

• permission given to an estate agent when they have agreed to sell a property on behalf of the seller

Question 9

What is an offer to purchase?

Answer 9

• an offer to buy a property in writing
• states the terms being offered

Question 10

What is a deed of sale/sale agreement?

Answer 10

• once accepted and signed, the offer to purchase becomes a legal contract between the buyer and seller
• describes legally binding terms and conditions regarding the sale of the property

Question 11

What is a conveyancer?

Answer 11

• an attorney responsible for compiling the deed of sale and overseeing the transfer process

Question 12

What are transfer costs?

Answer 12

• legal fees payable when a property is purchased
• for the transfer from of the property from the seller’s name into the buyer’s name
• fee determined by selling price
• regulated by the government
• paid to conveyancer
• includes transfer fees, deeds office fees and VAT

Question 13

What is a transfer duty?

Answer 13

• government tax that needs to be paid when the ownership of the property to the buyer
• conveyancer pays the amount to the Receiver of Revenue (SARS) after they have collected it from the buyer
• amount depends on property’s purchase price

Question 14

What is a deed of transfer?

Answer 14

• a document compiled but the conveyancer
• that is submitted to the Deeds Office
• to transfer the ownership of the property from the seller to the buyer

Question 15

What is the deeds office?

Answer 15

• the property registration office
• where the transfer of the property is registered in the buyer’s name

Question 16

What are Deeds Office fees?

Answer 16

• amount payable to the Deeds Office to register the property into the buyers name
• based on the purchase price
• regulated by the government

Question 17

What is a title deed?

Answer 17

• legal documents issues by the Registrar of Deeds
• proves that the buyer is now the legal owner of the property
• filed at the Deeds Office
• must be reflected in the National Property Registry

Question 18

What is a rates clearance certificate?

Answer 18

• a certificate indicating that rates and taxes have been paid to the local municipality
• no transfer is possible until the buyer, seller or both have paid this proportionally

Question 19

What is an electrical compliance certificate?

Answer 19

• confirms that the property’s electrical system complies with the set safety regulations
• must be obtained before transfer can be registered

Question 20

What is a mortgage bond/home loan?

Answer 20

• loan from the bank to buy property
  0 registered as security for the repayment of the home loan
• registered at the Deeds Office
• paid back in monthly instalments with interest

Question 21

What are bond registration costs?

Answer 21

• include conveyancer’s fee, tax payable to the government (stamp duty), Deeds Office Fee
• determined according to prescribed tariff
• depends on size of home loan

Question 22

What is a loan agreement?

Answer 22

• legally binding agreement where the borrower undertakes to pay back the borrowed money with interest over an agreed period of time

Question 23

What is a valuation fee?

Answer 23

• fee paid for the valuation carried out by bank assessors of the property offered
• or which is held as security for the loan when applying for a home loan

Question 24

What is an initiation fee?

Answer 24

• once-off fee for setting up the home loan account

Question 25

What is an occupation certificate?

Answer 25

• certificate certifying the date of occupation of a house by a beneficiary
• that the house is to their satisfaction
• subject to terms listed therein

Question 26

What is a warranty?

Answer 26

• an undertaking that goes to the heart of the agreement
• if breached, entitles the homeowner to cancel the agreement and sure for damages