New Developments
Category Advice
Ensure that the developer or controlling body is financially strong and insist on having ALL the documents a few days before you sign them. If necessary, take them to either an attorney, accountant or financial advisor.
Watch out for the following:
- Are you and your spouse or partner both signing the Agreement? If not, on the death of one party, what happens to the surviving partner?
- If you are relying on the cash for the new property coming from the sale of your present home, have you made the purchase subject to the sale of your home? If you don't you may end up owning two properties
- Have you given yourself at least 90 to 120 days to accomplish this?
- Are there any costs on signature, such as an administration fee or deposit? If so, who holds these monies? They should be going into an attorney's trust account
- Is the date of occupation clearly stated?
- Is the developer or agent representing him in possession of a valid Fidelity Fund Certificate and is a registered Property Practitioner (estate agent)
WHEN BUYING OFF PLAN OR DURING CONSTRUCTION CONSIDER THE FOLLOWING:
- Who is the developer?
- What facilities have been promised: club house, frail care, etc and will they be completed before construction of the first phase or only after construction of the final phase?
- What time limit has been promised for completion?
- Who will manage the complex?
- An estimate for a period of two years in advance of what the levy amount will be, and what it will cover, must be provided
- Is the land to be developed encumbered by a mortgage bond? If so, who is the bond holder
- Have you read the Use and Occupation Agreement and the House Rules?
- Is the levy amount clearly stated and the date of annual increase?
- Is a portion of the resale price in the future retained and, if so, how much?
- What happens on the death of a surviving spouse? - Are you sure as to whether you are purchasing a life right, sectional title, share block or freehold? - Just because a development is called a retirement scheme, does not mean that it is one. The Housing Development Scheme for Retired Persons Act 65 of 1988 regulates a retirement development, although certain developments do not comply with the exact specifications of the act. This needs to be disclosed, although you may still be covered by other acts such as the Sectional Titles Schemes Management Act 8 of 2011 or the Share Block Control Act 59 of 1980. (You should however be cautious when buying a life-right in a retirement scheme, which is not regulated by the Housing Development Scheme for Retired Person Act, as the Act will not protect you)
- This is the time to ask all the questions, clarify any assumptions and ensure that you get "exact" answers.
If promises are made, have them written into the Agreement of Sale.
Author: Mark McAlpine