Rising household debt means many people are being forced to sell homes they can no longer afford to maintain, but selling off a house to unburden yourself from the on-going maintenance of niggling issues is only a solution if you disclose the defects to the estate agent and by association the purchaser, prior to selling the property, according to Mike Greeff, CEO of Greeff Properties, an exclusive Affiliate of Christie’s International Real Estate. “If you deliberately do not disclose a defect when you sell your house, notwithstanding the voetstoets clause, you are actually committing fraud. If the purchaser is able to prove that the seller knew about the defect prior to selling the property and deliberately failed to disclose same, then the seller could be liable for any damages,” says attorney Belinda Lewis of Smith Tabata Buchanan Boyes.
“Roof leaks, rising damp and poor drainage are inevitably brutally revealed during the Cape winter, so any attempts at amateur patch-up jobs before putting your house on show, particularly during the rainy months are likely to backfire on you as a seller,” adds Greeff. “Your agent will provide you with a disclosure form which must be filled in for both your protection and that of the purchaser. If you’re not going to invest in professional repairs prior to selling, then it’s wise to call in a professional to quote on the estimated repair costs required and these might have to be deducted from the purchase price,” says Greeff.
“Sellers with municipal accounts in arrears should also be aware of the Cape Town Municipality’s recent decision to implement a new system for the recovery of arrear rates before it will issue a rates clearance certificate (without which title deeds may not be registered and property may not be transferred to the purchaser),” says Greeff. Up until recently, rates arrears which had accumulated in the two years prior to the seller’s application for a rates clearance certificate had to be paid up before the certificate could be issued. However, according to section 118(3) of the Municipal Systems Act, The City of Cape Town Municipality will now attempt to collect all arrear rates, and not just those accumulated in the previous two years. “This is a daunting prospect for many cash-strapped sellers who are putting their homes on the market for the very purpose of cutting back on living expenses such as property rates,” says Greeff, adding that if the seller cannot pay the full amount, the municipality will request the seller to authorise his/her conveyancers to provide an undertaking that payment will be made from the proceeds of the sale. “Once the title deeds are registered in the purchaser’s name, the municipality now has the right to be at the front of the queue of the seller’s creditors,” says Greeff. He says that the municipality has also made it clear that should the seller have insufficient funds even following the sale, it will inform the purchaser that any outstanding municipal debts will be against the property and that the purchaser will then become liable for them, even though they accrued well before he or she took ownership – in some cases years before. “Until that debt is paid off, Cape Town Municipality now has the right to suspend services to the property,” says Greeff. “This is sobering news for all those involved in buying or selling property, however, working with a qualified agent who is well-informed and keeps abreast of legalities can go a long way towards alleviating pricey aftershocks,” according to Greeff, who adds that qualified estate agents are also more likely to be liaising closely with conveyancing attorneys who will have access to municipal payment records and can therefore protect purchasers from potentially devastating post-purchase debt.