In spite of all the publicity from all four major banks surrounding the three month period needed by the banks to cancel a bond, there are still sellers who forget or wait too late to do this, says Lanice Steward, managing director of Knight Frank Residential SA.
“Attached to all Knight Frank seller’s listing sheets is a letter reminding the sellers to cancel their bonds in time but it does sometimes happen that the date is overlooked or forgotten,” she said.
The consequences of not sending the cancellation to the bank in time can add up to a large sum of money, she said. The banks want 90 days’ notice in order to cancel a bond and this does not have to be from the first day of the month – this can be submitted at any time during the course of the month.
While the banks’ penalties differ, this is money wasted, she said.
In all instances, the seller must send his cancellation to his bank in writing and receive, in writing, a confirmation that his cancellation letter has been received. Between administration sections and various departments, as with any communication, letters can get lost and this receipt will protect the seller in a case of the bond not being cancelled in time. The onus is on the seller to check whether his letter of cancellation has been received and he should never assume that it has gone to the right department.
“He must check and double check that his letter has been received and accepted to avoid the nasty surprise of finding it has not been done and the penalty interest is due,” said Steward.
This information is published for general information purposes and is not intended to constitute legal advice. Specialist legal advice should always be sought in relation to any particular situation. Property Wheel will accept no responsibility for any actions taken or not taken on the basis of this publication.