 Good evening and welcome to episode 377 of the private property podcast on your host, Osamando Oaxamilo. I suppose the edition of the property podcast is for journalists. For the first time, where have you been? You've been listening out on the best and the only daily property show in South Africa catering to your property needs. Do make sure that you go to our Facebook or our YouTube page to catch up with all the great episodes that you have already missed out on. And to all our regular viewers at home from, you know, watching us on Instagram and YouTube on Facebook, welcome to it. You know how we do every single weekday. You and I have an appointment at 7 p.m. We're always in conversation with a property expert who helps us navigate our property journey. Doesn't matter where you are in the property journey, we sit here to hold your hand and make sure that you get your answers, your questions answered rather from our topic experts. And talking about different kinds of shows that you can look forward to. It is, of course, eight Thursdays. So later on this evening, you can look forward to, you know, bringing you the farming podcast. And that's going to be coming to your screens at 8 p.m. And you can catch them by the same time on Tuesdays with the farming podcast. Always talking agriculture and every Monday's and Friday's chat brings me to home shoppers show where he's always taking us through incredible properties that you can find on www.carbonproperty.co.za. And, of course, on Wednesdays, Esther Carson brings her the first time home by show. But she's always in conversation with people who have not only walked that first time home by journey, but have gone on to grow their property portfolios from stream to stream. But those are great shows that you can look forward to every single weekday at 8 p.m. Do make sure that you sit to your alarms and tune in to those shows. And one of the other great things that we have growing, of course, is on our Facebook page. We were running an incredible competition. And all you have to do to send a chance of walking away with 500 drens in cash every single day right here on the private property podcast with myself is an underworld commando. Is to make sure you go comment on the pinned post on our Facebook page. Want to find out some of the great property advice that you have picked up along the way. And if we call out to you on the show, all you have to do is to drop us a message down here below to claim your prize. That certainly is that easy to walk away with some cash prizes. And I'm already seeing the great love that we're getting on our Facebook page and through sending those green hearts when we see we're sending them a better out of the chain also sending some love to keep the love coming this evening. As we tackle a topic that I absolutely love, because one of the big things with property is the properties finance, but properties also law. So you really need to understand the legal implications when we talk all things property and the different things that you need to always be aware of. Whether you're buying a property, selling your property, you're renting your property, you are a tenant who's about to rent. But this time we're going to be looking at understanding the different types of property contracts that you're going to encounter. When you're looking to buy or to sell, those are the major contracts that we're going to be looking at. What you need to be aware of. Some of the do's and don'ts when we talk about that. And of course also looking into the bond papers that you're going to sign with the financial institution that's going to be financing your property. I know how intimidating those papers can be. There are usually so many things going on there. You don't quite know where to start and really I'm talking a little bit about what you can expect and of course how you can certainly make sense of it all. And how does it get a good sense of the different types of property contracts this evening I'm joined by Zina Tussin who is a partner at Denton's Zina Tussin evening. And thank you so much for joining us on the show. Good evening Zana. Thank you so much for joining me. I'm going to be on your show and I'm very excited to interact with all of your viewers. It's such a pleasure to have you with us Zina. I think the biggest place where Black History Club starts with our conversation this evening is to understand just how important it is for viewers at home to get a sense of the legal implications when it comes to their property chain. Because I think as I was saying to you, oftentimes we think we can just change our minds and this is whether you're looking to buy or looking to sell sometimes even when you're a tenant but you know we're not going to look too much into the tenant side but we're looking to buy and looking to sell and perhaps you've got an estate agent that's saying just quickly sign it's okay you can pull out perhaps just almost paint a picture of what the severity of signing any legal document any document for that matter when you are on your home ownership journey. I'm so glad you asked that question Zana. You know when you're buying a property it's always so exciting you're going to view something you really like you're setting a home you have great expectations of your transaction and we sometimes get carried away and we don't understand the legal ramifications of what we're getting into so yes you are very creating that the agreements that you sign are fundamental they're very important they're not the document you're signing has legal repercussions you're binding yourself to an agreement with the other party to either buy or to sell reveal these conditions in the agreement that you undertake to abide by to fulfill and it is not a simple case of you know I'll sign the agreement and I think about it and I check my mind in two days time I'll be able to walk away it isn't that simple we find it so often the clients you know have a change of heart and then you look to us to say I want to get out how do I get out but I don't want to have to suffer the repercussions they are legal ramifications their cost implications if you want to try and get out and it's not as simple as you think it is you then have to find a way of legally terminating the agreement which comes with its own consequences so I definitely agree the clients purchases and sellers need to make sure that they get the proper legal advice there's nothing wrong with stealing the u.s. state agent that I want to have the time to read through this document get my attorney to look through it give me some personal advice and then conclude it don't be hasty it's a very big step that you're taking and it comes with legal ramifications and you know Zina I'm actually so glad that you also pointed out that there are legal ways to terminate you know these contracts and we'll look at that a little later on because I think that there are certain circumstances where really as the buyer you're very clear that you can no longer continue the transaction or perhaps as the seller you becomes very clear that you can no longer continue the transaction for whatever reason right and exploring what those legal channels are and also understanding you know the financial implications of you know that determination is also equally important but before I wanted to look at the offer to purchase because this is usually the very big starting point and often the very first sort of big contract that many of us are going to encounter when you're looking to buy a property and we've spoken about the offer to purchase on different occasions on the show but when we look at it from a contractual perspective what are some of the do's and don'ts from you know as a buyer that you need to just top of mind be aware of when you get that offer to purchase or let's say even up to view the house and you're still not quite you know certain if you want it or not and you may have an estate agent who you know hypes you up and says look the property's in demand if like other people coming to view and we know a lot of them you know do this so what are some of the key do's and don'ts as a prospective buyer should you be aware of when it comes to the offer to purchase I say the very first thing is make sure you read and understand the contents of the offer before you sign it if you don't understand it get legal advice they're not always in the simplest English terms and it's important that you understand what you're signing so read carefully before you put your signature to it the other thing that I always tell uh purchases and I see this happening quite often everything that you agree on with your seller with your agent make sure that it's recorded in the agreement because if there's something that is agreed upon not recorded in the agreement it becomes very difficult to enforce it thereafter so make sure that you include it in the agreement make sure that you keep a copy of the agreement after you sign it very important because if you need to refer back to it and you don't have a copy and the party is getting to some sort of legal tussle very difficult to vignette contract a copy out so that we can have regard to it so I think those are the first three things that popped in my mind if you if you don't understand it never feel shy to ask advice make sure you understand what you're signing before you sign it and that's such a big one there's no such thing as a stupid question especially when you could have just how big a commitment this is and regardless of how much you're going to be spending on your property this is a priority and not many of us do this regularly enough to be confident uh that we you know know every step of the way now you know one of the things that you actually mentioned and and I like this one because we we you know have a conversation with the estate agent uh sometimes when you're viewing or even have a second viewing that you want it's a why you're included or you want the thing to you ask is it going to come with this we know fixtures tend to be some of those unfortunate things where some silencers end up removing certain aspects uh or certain items that are on the property that reports are going to come with the property would you look at just some of the things that we should probably include uh you know as we sort of agree perhaps just share a few things that when you see it and you're viewing that you would forget to actually include because as I'll say we know with fixtures that that's quite a big one uh with somebody we end up taking out part of the entertainment area because they use you know very expensive finishes but when we actually look at things that people would typically forget to rather put in that OTP as opposed to just having that verbal conversation with their estate agent what are some of the key things I could say listen put it in there you know you forget this but make sure that you do actually include it I think the key thing is um you have the conversation with the estate agent but make sure the seller is in the conversation as well because your agent is facilitating the transaction but your transaction is at the end of the day with your seller so make sure that you know the communication channels are open um in terms of what to include in the offer um you know the rule of thumb is when you when you walk through a property um everything that's affixed to the property it stays with the property so for example entertainment um Bryce five uh entertainments enter that's built into the property cannot be removed um uh curtain rails cannot be removed things like that anything that if you move from the property takes away from the property damages the property in any way cannot be removed but if you're walking through the house and you see the curtains are made go really well with the with the lounge um you know if you want it arrange with the seller that you're going to pay export and include it in the offer um there's a clause in every offer to purchase by and large that says that this agreement is the full agreement and so if you include it in the agreement and you subsequently come to your attorney and say that the seller told me he was going to put curtains with the property it's very difficult for your attorney to enforce that it's next to impossible because you've got that clause in the agreement that says this is the whole agreement so um I would say make sure that everything you discuss is is recorded in the agreement make sure to inspect the property carefully understand what it is that you buy and what it is that you're getting and what you're not getting what is the seller taking with him and that's such a key one I think you know make sure you include everything in writing uh and in the offer to purchase itself because I think the email alone is not sufficient and as you point out you know that sometimes you may be having this email correspondence or WhatsApp correspondence with the estate agent but you actually want to make sure that the owner is also aware of whatever it is that estate agent is agreeing to and then of course it will be included um in the offer to purchase I'm saying all the love that you're getting on our social media pages Josh uh Valdevil uh watching us on Facebook uh Zalfa Kasim also watching us doing Facebook sending those screen cards Mark Rashimang is sending a comment saying read read read that contract get it checked by the legal practitioner that's actually important one I think often a lot of attorneys you're very happy to have a quick look at it because you also understand that uh not a lot of people uh you know understand it and you'll find that if anything I mean I've come across many attorneys who actually even just see that for free in terms of just a quick read and they'll say look this be careful of this that and that and that's it because more often than not uh that's it doesn't even take them that long you know offer to purchase agreements aren't usually 50 pages long and they would know key things to quickly look out for and just bring to your attention and a comment here coming through from O'Donnell to Sishok I'll say it's better to read property contract repeatedly until they understand before making a decision and that's such such a big one um and I want us to take a quick break uh to see who the lucky winner this evening is of that competition that we run every single week right here on the property project with myself because I'm going to come back we're going to be looking at the the the contract you entered into with the financial institution because this is one that we don't talk about enough uh it's very overwhelming I mean dealing with banks is also just so overwhelming and you get it and you just think let me initial every page sign it at the end as opposed to really getting a good grasp of what it is you're signing up for key things to look for as you're reading um those bond papers before of course ultimately bring through to the attorneys and signing the physical um uh papers as well but let's take that quick break and see who the lucky winner this evening is and that lucky winner this evening is Dina Periachi Dina Periachi is the lucky winner excuse me for pronouncing your name so terribly uh Dina I do hope that you are watching if you are drop us a message down here below we've got 500 rounds in the money bag that is up for grabs for you this evening so do make sure that you drop us a message in order to claim your price and as you continue the conversation and understanding different types of property contracts I'm joined this evening by uh Zina Tversun who is the partner at Dentons and really exploring what you need to be aware of some of the do's and don'ts and of course the importance of you understanding um any contract that you're going to sign especially on your home ownership journey now Zina I think let's look then at the bond because I think that is the one that is just so intimidating you know you've gone through the trouble of doing different properties and you finally found the one that you love and you go and you sign this offer to purchase and you're even happy with the way you've negotiated the purchase price you've negotiated let's say you wanted extra things to be included or to be left in the property so really happy with that you've now got this offer to purchase that you sent to the bank and you're even happy with say the different kinds of offers that different banks are you giving or sending your way and the other brand paper the quote that they usually first thing for you to accept that okay you're actually going to uh take bank a or b or whatever the case is and then when we first just look at the quote let's look at how binding that quote is because before we obviously get to the point because in self you first you know uh sign the quote how binding is that quote can you after four days of having signed it then wake up and say yeah actually no no no I don't want to go ahead with let's say bank with this particular bank going to change banks or I just want to you will stop this process altogether so yes you're quite right um the process of the bond um registration is quite important I mean you walk into the attorney's office and you have a stack of papers in front of you the property taking the better part of an hour to sign it is very very intimidating um the key thing with the documentation you quite rightly point out is make sure again that you read and understand everything and I'm glad that I'm going to get the opportunity to shed some light on that in terms of the quotation um you get the quotation issued by the bank the quotation details all the financial information what amount is loaned to you the period of your loan the interest rate etc you have the option to sign the quotation or not sign the quotation if you don't sign the quotation it lapses the office no longer available to you by the bank you accept it that thing is communicated back to the bank and uh an official bond grant is then issued which is then communicated to the transferring attorney and the implication of that financial bond grant is that it um it vendors you if any vendor you sell is subject to what you call a mortgage contingency or a suspensive condition the issuing of that final bond grant range is that condition final and fulfilled so your agreement is now binding and then and the repercussions of the agreement is therefore uh into place so you know I would I would urge your viewers not to take the signing of the bond grant the bond quotation very likely um make sure again that you understand everything feel free to ask your bond consultant they always very happy to assist you or ask an attorney again to help you but understand what you sign before you sign it because you do not want to sign it and then have an axle of wanting to get out of it and I think that's such a big one to understand that you in the event where you know one of the suspense of causes and this is one that's um often obviously in a lot of opportunities agreements that you're going to you know get funding secured I think one of the things that people sometimes don't do and we've even seen this in the show is uh instead of having a blanket one that you know you're going to get uh funded secured actually stipulate that you may want 100 percent secured and up to let's say maximum prime so maybe you're aiming for a prime minus one or prime minus 0.25 but if a bank comes and you know gives you prime let's say plus 0.5 then you know that that suspense of cause effectively hasn't been made because of all the financial institutions that you engage with you still haven't received uh you know a quote that's to your satisfaction and I think that's something that people at home tend to not know to at least include and some end up having an 80 percent ltv from all the banks just different interest rates and the clause is now made that suspended condition is made but they hadn't budgeted you know for the for 20 percent deposit and I think that becomes such a crucial one for so many of us to be aware of I only learned this after the fact and luckily I've been fortunate I was always getting 100 percent you know ltv and and so by the time I learned that trick I made the standard thing to include it in the event where one day I don't get the interest rate that I may want and and you want to be able to walk away from that deal as much as possible and then when we look then at that particular contract that you then entered into with the bank so you've chosen bank x you know it's quote and you sign the papers and of course they send the instruction and to the bond registration attorneys and the transferring attorneys what are some of the dues and don'ts during that process what do we need to be aware of once we've signed that and even from a legal perspective in terms of what we can and cannot do and in that part of our bond journey. I think a very important point that I'd like to make here regarding the bond journey is when you accept the bond grant your bank locates an attorney to do the bond registration who's an attorney on their panel that is a separate attorney from your transferring attorney people always get confused I I've been I've been contacted by another attorney already why are you contacting me because they're two separate journeys they're two separate attorneys doing two separate transactions so your transfer runs currently with your bond registration they also two separate fees so you've got to pay transfer fees and you're going to pay bond registration fees and and and it's very important that you budget for these fees because more often than not we get people who come to us and say but we're buying the property we budgeted for those fees we didn't know we had to pay for a bond registration fee or we paid the bank the initiation fee or the valuation fee why do I need to pay another fee again so there's all of these fees that that come with the bond registration process and be sure to understand what you're signing up for when you do once the bank accepts gives you your bond grant and your bond attorney contacts you there's been a process that you've got to follow where you've got to go in and sign bond documentation with them and that's that huge daunting stack of papers that they put in front of you and you could initial every page feel free to ask the questions what am I signing take me through the salient terms of this of this point out to me what is my interest rate make sure that it matches what you thought you were going to be getting my bond instrument every month and the bond instrument including my service fees what are my insurance requirements do I need to take our insurance and the property do I need to have life insurance is that required of me you know read read the agreement in terms of what happens should you not be able to pay your bond installment you know those are all key things that you need to understand before you put into paper when you sign in those bond documents. You know Zilek you're highlighting earlier that one of the things that people typically tend to not know is that they have to also budget for the bond registration attorneys the viewers at home I know they're all chuckling with me you saw me chuckling behind the scenes and it's because I want to share the story of how when I started my property journey I bought two properties at a go and I had done all this research and knew I have to budget for an attorney but all the research that I've done I thought I'm only a budgeting for one attorney when I buy a property because I was buying two properties and both were actually bonded it meant I was actually going to gain four attorneys and not two and so the first two invoices came in I knew exactly what was happening by the time the third and the fourth one came in I thought you know this is some kind of identity theft I was very confused about what is happening who these people are and what these invoices were and it really did take one of the attorneys explaining to me that you know so remember you're buying a property it's a bonded property and with each property you know you're going to the transferring attorneys they are you know for the property that I was dealing with with them it would be these attorneys and then you also have the bond registration attorneys and that is you're saying you know they're on the banks panel it's the bank that essentially you know procures the services and makes sure that the work is carried out so I think that's such a big one when you don't know about it and haven't budgeted for it that so many of us often unfortunately forget along our journey and taking more of your questions and comments at home this evening as we're looking at understanding different types of property contracts and in conversation with Zina Jusson who is a partner at Denton's and Donald's Shokha so in property buying must be included as a school subject because plenty of people don't know the rules when buying property I think somebody who's studying this stuff I don't know I should be including it so much as a school subject but it's certainly we need to make people aware of just the basics when it comes to property because I must say it can be quite a bit and you're not the following up saying just to remind the following man they show to include provisions for independent and professional home inspections in the OTP and that's actually such a big one especially when you're buying you know standalone houses oftentimes in a lot of sectional alternative communities where it's an apartment we'll find that more often than not things tend to be about board I mean you know the exceptions unfortunately but this is this is particularly a big thing when you know you're buying you know standalone houses where you may not be able to see what is wrong and when you buy that property you are going to have to fix whatever is wrong with it whereas more often than not in you know sectional title communities depending on what the thing that is wrong and they may be provisioned for it to be covered by you know the public corporate and I think you know we've been talking a lot from the buy side then on the sell side then from people are looking to sell their property we know that they're quite a number of people during this period who aren't doing that what should they be aware of in terms of the contracts that or the contract rather that they're going to have to you know sign certainly especially if your property is bonded and the dues and loans for them as you know they obviously cancel the bond and work with the bond cancellation attorneys I think the first contract that they're going to sign is probably going to be with an estate agent recruiting the services of an estate agent to market your property and make sure you understand what you're getting to me usually there's a time period that you allow them to have a mandate to market the property for understand whether you're giving them a sole mandate or an open mandate if it's a sole mandate you are not allowed to to get your own purchaser in if you do use the liability commission so understand those things and again feel free to get legal advice before you sign it in terms of your sale agreement you know Zama one of the key things is understand the time frames and any expectations from the agreement so most often you find the seller making certain arrangements or commitments based off this transaction not understanding the time frames is to win the finances are going to be available from the proceeds of the sale you know have a chat with the attorney to understand when you can commit to certain other you know ventures of the finances um when you if you do have a property that is bonded you're going to have to cancel that bond in order to transfer the property usually that process is pretty seamless because you're transferring the attorney takes care of most of it you do have to pay a bond cancellation fee it's it's about three three and a half to four thousand rent um be aware of the fact that you're going to have to get compliance certificates which will cost you money um it's it's you know dependent on on the the work that needs to be done to bring the property up to compliance status um you have a chat with your attorney to understand what rates clearance is and what your info in terms of payment so that you can make the proper allowances because most times what happens is the parties are not ready they're not aware of these things that they need to make a vision for and that has the inevitable result of delaying the transaction because of not being able to access these funds um so so have a chat with your attorney if you need to have a chat with your with your agent before that and I think another key thing is also the seller has the right to appoint an attorney of their choice so have your chat with your attorney even before you accept an offer but like at the beginning similarly with the purchase so when you sign the offer it becomes binding and um the repercussions the flow from that so understand what you're signing before you prepare to pay for and as we you know draw to the end of our conversation I do hope the last few minutes our winners going to raise their hand and claim that 500 rounds that is in the money bag of course if they don't start to roll over to a thousand rounds tomorrow evening uh I've got a comment coming through from YouTube uh Tracy Spangley saying great conversation topic thank you very much there uh Tracy and uh Zina I can't let you go before we touch on this one you know when you then want to be able to terminate uh you know a contract and let's start perhaps when you are at the buyer looking to terminate uh the contract that you've signed in terms of the offer to purchase and and let's assume this is at the stage where you've made the suspense of conditions and so you actually when perhaps you're even working with the bond originator from the estate agent side and you have received quotes that uh were satisfactory in terms of meeting that suspense of condition what how do you then sort of legally terminate that contract and when you know that you can no longer go ahead with um buying that particular property once you've made the suspense of conditions of sale it becomes very difficult because your agreement of sale is is finally binding if you comply with your obligations that means legally is that you're in breach of the agreement and you cannot fulfill your obligations or failure to fulfill those obligations allows the seller or the other party to to uh to cancel to cancel the sale and hold you liable for damages so what would happen is the other party would give you a notice period dictated to dictated by the agreement so seven days ten days whatever the agreement stipulates you would have that period of time to remedy your breach and if you don't the agreement is then cancelled if it is cancelled you could be liable for damages in South Africa we govern by a principle that says you can only be liable for damages that have actually been sustained so if the other party has suffered any kind of financial patrimonial loss that they can prove and that they can quantify you will then be held liable for that so you would be able to get out of the agreement but not unscathed and then I think on the sale side when you're now looking to uh you know get out of selling your property the other party has signed the OTP they've gone and secured you know uh the grant from the bank and before you even sign perhaps the transfer papers you have a change of heart that look you actually want this to hold or even if let's say you've signed the transfer papers because that usually happens the pretty much happened concurrently but of course the matter is not up for for prep yet we're still a few weeks out uh from that happening so during that period you want to pull it out of the agreement how do you then legally do so and what should we be aware of should you choose that route so the same provisions apply again it would be in breach if you wanted to pull out of the agreement you would be repudiating on the agreement um the the buyer would have the record hold liable for any damages that they would have sustained um in instances like that if you want to avoid any sort of legal repercussions we always suggest that the parties sit down and negotiate and see if they can come to a sort of a settlement a meeting of the minds to say this is my circumstances this is why i want to pull out can we come to a medium uh you know a compromise somewhere we it works for all of us but if it doesn't go down that route and it becomes legal then you could be liable for damages and again you uh you know the same notice periods would apply the same processes would apply and the same damages would apply you know any final tips as we wrap up this uh conversation this evening any final tips five years at home when it comes to uh you know making really good sense of legal contracts that they're going to make uh use of or certainly be signing throughout their home ownership journey uh that they really need to always bear in mind regardless of whether they're the buyer or they are the seller i think um you know probably is really exciting as i'm like that's why i love it so much and don't be afraid of the agreements don't be afraid of the legal repercussions just be wary just questions be overly uh you know uh inquisitive never feel shy there's never such a thing as a stupid question um educate yourself i think when you come from a place of being equipped with knowing what you're doing in the property space you know it's a very excited space to be in so my only advice would be is don't be put off by the legal terminology and the legal jargon just ask the questions um lawyers are always happy to assist um we want to make the journey as simple as possible and enjoyable as well so ask the questions and and and just be a way meaningful and i think that's actually just such a great place to leave it at that don't be scared uh and really be inquisitive be overly inquisitive don't be afraid to ask any questions they are legal uh you know petitioners that are there to help you along this journey don't be scared to ask them uh there's no such thing as a stupid question uh regardless of what you know that question is whether you're buying a seller and you really want to make sure that you're confident when you sign uh any document and you know what you are signing i think the big thing is you know something coming back to buy to you and you say you didn't know you were not aware uh nobody extended to you rather sit down with somebody and explain everything line for long uh if there's something that you do not understand zina we are going to leave it there this evening thank you so much for joining us on the show it's been such a pleasure to have you with us thank you zama i've appreciate the opportunity and that is zina who is a partner at dentin's uh wrapping up the thursday edition of the private property podcast with myself is i'm i don't know i'm going to squeeze in that last comment from omen's but today is saying don't be afraid but know what you're getting yourself into and that's going to be a great summary of our conversation this evening i see a lucky winner unfortunately didn't claim that five of the drowns we've got a roll over you can expect one thousand rounds in the money bag tomorrow evening well i'm off to look forward to the um the farming podcast with them by you know go actually to pin in i'll be back on the screen tomorrow