Glossary of Conveyancing Terms

Terms frequently used in property transfer and conveyancing.

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  • Act

    A form of legislation passed by the courts for the government.

  • Addendum

    A supplementary and separate agreement to an original sale contract, and should it contradict the original contract, it is presumed to overrule it.

  • Administration Fee

    The monthly cost that the bank charges to handle a mortgage loan.

  • Affordability

    Analysis An analysis of a buyers income, liabilities and available funds, in order to determine their ability to afford the purchase of a property.

  • Agreement of Sale

    Also referred to as the Offer to Purchase. It is a legally binding document signed by the buyer and seller, whereby the buyer agrees to buy a property from the seller, who agrees to sell the property to the buyer for a proposed purchase price and conditions on which the sale will take place.

  • Alienate

    The Alienation of Land Act 68 of 1981 governs the alienation (selling, exchanging or donating) of immovable property.

  • Amortization

    Loan payment by equal periodic payments calculated to pay off the mortgage at the end of a fixed period.

  • Antenuptial Cintract

    An agreement entered into by parties prior to getting married, they will then be married out of community of property.

  • Appraisal

    An estimate of the value of property, made by a qualified professional called an "appraiser/valuator ".

  • Arbitration

    Procedure whereby parties to a dispute appoint an arbitrator, whose decision is final and binding, to settle the dispute.

  • Assessment

    The bank’s assessed valuation of the property.

  • Association Agreement

    An agreement concluded between the members of a close corporation, which states the contractual capacities of the members.

  • Auction

    Method of selling a property to a person who makes the highest bid.

  • Bank

    A financial institution.

  • Body Corporate

    The controlling body of a sectional title scheme, responsible for the costs of upkeep and maintenance of the property.

  • Bond

    See mortgage.

  • Bond Registration Fees

    Fees and costs payable by the borrower to the bond attorneys who are attending to the registration of the bond at the Deeds Office.

  • Bond Term

    The time period, over which you have to repay your homeloan.

  • Borrower

    The person who applies for and receives a mortgage loan with the intention of repaying the full loan amount.

  • Breach Clause

    A condition in a contract, which obliges the parties to give the defaulting party written notice to remedy their breach of contract within a specific period (usually seven days) before the contract can be cancelled.

  • Bridging Finance

    A loan that is collateralised by the borrower's present home sale in progress before the present home is transfered.

  • Building Loan

    A loan used to finance building a house. Usually paid in trances as the building works progress and upon inspection by the banks inspectors.

  • Cancellation Attorney

    This attorney attends to the cancellation of the seller’s bond and is appointed by the bank, which holds the current mortgage bond.

  • Cancellation Figures

    Outstanding amount on the mortgage, interest and any other costs required to settle the mortgage bond.

  • Capital Gains Tax

    All taxpayers are taxed by the government on the profit they make from the sale or disposal of an asset , such as property. Primary residence excluded.

  • Cession

    A document signed by the borrower, ceding their life policy to the bank, as surety for a mortgage.

  • Clearance Certificate

    Issued by the relevant authority stating that the rates or levies for the property have been paid up to a future date.

  • Close Corporation (CC)

    A business entity registered in terms of the Close Corporations Act 69 of 1984. A maximum of ten natural people can be members of a CC. It may conclude agreements of sale or leases in it’s own name.

  • Cluster

    A freehold property in a development of similar houses, usually with good security and limited access.

  • Code of Conduct

    A set of ethical rules drawn up by the Estate Agency Affairs Board to regulate estate agents’ ethical conduct.

  • Cancellation Attorney

    This attorney attends to the cancellation of the seller’s bond and is appointed by the bank, which holds the current mortgage bond.

  • Collateral

    The amount of security provided to secure a mortgage bond.

  • Commercial Property

    Property used for business or office use.

  • Common Property

    It is all the land in a sectional title complex, as well as those parts of the buildings which are not included in a particular section or unit. Common property can include stairwells, lifts or elevators, carports, swimming pools, gardens, etc.

  • Commission

    Remuneration paid to a estate agent by their client. Usually the Seller.

  • Common Law

    The law that automatically applies if the parties have not reached an agreement on a specific legal issue in the Offer to Purchase. The South African common law is the Roman Dutch Law.

  • Company

    A trading entity that is commonly used for commercial activity and may enter into agreements of sale or lease in its own name.

  • Condition

    A clause that renders the operation and consequences of the contract as a whole dependent on an uncertain future event. A suspensive condition suspends the operation of the contract for a period of time, subject to the occurrence of a future event, and only if and when the condition has been fulfilled will an enforceable contract exist. In the case where a resolutive condition is stipulated, the contract is immediately binding and will remain binding unless the condition is not fulfilled.

  • Conditions of Title

    Restrictive conditions limiting an owner's rights over their property, which are recorded on the property’s title deed. They cover matters such as building limitations and servitudes.

  • Consolidation of Debt

    Applies when a customer is paying off two products bought on credit and he chooses to combine both products and pay them off as one debt, possibly taking advantage of a lower rate.

  • Contract

    A legally enforceable agreement, for example a lease or sale.

  • Conveyancer

    An attorney who is usually appointed by the seller and is qualified to attend to the registration and transfer of immovable property from a seller to a purchaser and the registration of any bonds.

  • Conveyancing Costs

    Costs and fees payable to the conveyancer.

  • Cooling-off Right

    A statutory right, recorded in Section 29A of the Alienation of Land Act, giving the buyer of a residential property costing R250,000 or less, the right to withdraw from the sale within five working days of signing the offer to purchase. It does not apply if the buyer is a company, close corporation or trust.

  • Costs Clause

    Makes provision in a mortgage loan document, securing an additional amount lent, to cover potential costs, such as transfer and bond costs.

  • Credit Record

    The credit history and current status of a borrower's credit standing.

  • Creditor

    Someone to whom you owe money.

  • Debit Order

    An instruction to the bank to debit your account monthly with your monthly expenses, i.e. your homeloan installment.

  • Debtor

    Someone who owes you money.

  • Deed of Sale

    Also referred to as the Agreement of Sale or Offer to Purchase.

  • Deeds Office

    A government department responsible for the registration of transfer of immovable property.

  • Deed Office Registration Fees

    Fees charged by the Deeds Office for registering the mortgage bond and title deed.

  • Default

    Failure to meet legal obligations in a contract. Also see Breach

  • Defect

    A patent defect is a clearly visible defect. A latent defect is a fault or flaw that is not immediately detectable, or is hidden from view on inspection of the property.

  • Deposit

    Money you have readily available that you use as part of the payment on your new property. When renting property, a deposit is an amount that you pay upfront and is used as security in the event that you cause any damage to the property while renting it.

  • Domicilia Citandi et Executandi

    Also referred to as Domicilium. It is the physical address a person gives for any legal documents and notices that might have to be served, it is the place where a person is deemed to be a permanent resident and may not be be a PO Box or Private Bag Address. . If you have been sent a document or notice to this address, you will be deemed to have received it, even if you did not in fact receive it.

  • Domicilium

    See Domicilia Citandi et Executandi.

  • Duet House

    One of two separate free-standing or attached units that have been built on one stand.

  • Duplex

    A sectional title unit on two levels with stairs.

  • Dwelling

    Any house, flat, apartment, room, hostel room, hut, shack, outbuilding, garage or demarcated parking space.

  • Electrical Compliance Certificate

    A certificate, which is issued by a qualified electrician stating that the electricity installation for a property, from its supply point, is safe according to the Occupational Health and Safety Act. The cost of this and any electrical repairs that need to be made are for the seller’s account. It is legally required in order for the property to be transferred into the purchaser’s name.

  • Endorsement

    A note made on the title deed of a property by the Registrar of Deeds.

  • Entomologist’s Certificate

    Legally required in some coastal provinces before transfer of a property can take place, confirming that its structure is free of wood borer or termite infestation.

  • Equity

    The value of a property an owner has over and above the mortgage against the property.

  • Escape Clause

    A condition in a contract, when a buyer is given time to sell his property first, giving the seller the right to cancel the agreement if he gets a higher offer from another buyer.

  • Estate

    When a person dies, all their assets and liabilities will be placed in their deceased estate, which is wound up by an executor.

  • Exclusive Use Area

    The owner of a sectional title unit can never become the owner of any portion of common property, but they can acquire the right of the exclusive use of a certain portion, such as gardens and parking bays.

  • Expropriation

    Procedure where a property is taken over, usually by local authorities, for specific purposes in the public interest.

  • Finance Charges

    The interest charged on a loan.

  • First Mortgage

    The primary lien against a property.

  • Fixed Installment

    The fixed monthly payment (including interest) due on a mortgage loan. It remains constant for a certain period, and goes hand-in-hand with Fixed Interest Rates.

  • Fixed Interest Rate

    The mortgage interest rate will remain the same for a specified term of the mortgage for the original borrower.

  • Fixtures and Fittings

    Attachments to a home, which are deemed to permanently belong to it. If it is permanently attached, nailed or screwed into the floor, wall or ceiling, it is a fixture.

  • Foreclosure

    A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession or sale in execution of property.

  • Freehold

    A free-standing house on a plot of ground with its own Erf number.

    Full Title Describes the transfer of full ownership rights to the buyer.

  • Guarantee

    A formal letter issued by a financial institution to the transferring attorney, undertaking to pay the purchase price (or outstanding amount) on registration of transfer of the property into the name of the buyer.

  • Home Owners Insurance

    Insurance taken out to cover your property from damage caused by fire, rain, a broken geyser, etc.

  • Homeloan

    An agreement between the customer and a bank whereby the bank lends the customer money in return for a security (mortgage bond) being registered over the property in the bank’s favour.

  • House Rules

    These are the rules governing the control and management of the property in a sectional title development

  • Huur Gaat Voor Koop

    ‘Lease goes before sale’ – where leased properties are sold before the lease expires, the tenant may remain in occupation of the premises until the lease expires.

  • Immovable Property

    Land and everything that is permanently attached to it.

  • Initiation Fee

    A once-off fee charged by the bank to offset the cost of opening the mortgage account.

  • Insolvent

    A person who is unable to meet his debts or discharge liabilities.

  • Installment

    The regular monthly amount that a borrower agrees to pay on an outstanding debt to a lender.

  • Interest

    The fee charged for borrowing money.

  • Interest Bearing Account

    When attorneys and/or realtors hold money for clients, it is deposited into separate Interest Bearing Accounts, until these monies and interest accrued during this time have to be paid out to whom they are owed.

  • Interest Rate

    The percentage of a loan that a financial institution charges, which is payable monthly.

  • Investor

    A money source for a lender.

  • Joint Income

    The total gross income of the mortgage applicants

  • Joint venture

    An investment entity formed by one or more entities in order to acquire or develop and manage assets.

  • Judgement

    A legal recording of a person’s inability to honor a debt.

  • Landlord

    The person who lets out a property to someone else.

  • Latent Defect

    See defects.

  • Lease Agreement

    A contract whereby the landlord allows the tenant temporary use of a dwelling, in return for payment, known as rent.

  • Legal Entity

    A company, close corporation or trust

  • Lessee

    A person who occupies a property (also known as a tenant), but does not own it and pays rent in return.

  • Lessor

    The person who rents out a property to someone else.

  • Levy

    Levy is the owner of a sectional title unit’s proportionate share of the costs incurred by the complex for the month.

  • Levy Clearance

    Certificate Issued by the body corporate of a sectional title scheme stating that the levy has been paid to a future date in respect of the property.

  • Liabilities

    A person's long-term and short-term financial obligations.

  • Lien

    Where a person has improved someone else’s property or has incurred certain expenses in respect thereof, he may retain possession of such property until the debt due to him has been discharged, it is the right to retain possession.

  • Limited Real Right

    A registered right over someone else’s property, such as servitude's and mortgage bonds.

  • Lodgement

    The act of handing in the necessary documents at the Deeds Office for examination and registration of transfer.

  • Mandate

    An instruction, authority or agreement given to a estate agent by a seller, to market their property.

  • Market Value

    The price that a willing and financially able buyer would pay, to a willing seller, for a property in a particular area at a given time.

  • Married In Community of Property

    Parties have a joint estate and any immovable property will be registered in both spouses’ names.

  • Maturity

    The date on which the principal balance of a loan becomes due and payable.

  • Memorandum of Incorporation

    This document forms part of the constitution of a company and contains valuable information about the company.

  • Mortgage

    An agreement between the customer and a bank in the form of a home loan, whereby the property is used as the security for the loan. It is a legal document that pledges a property to the lender as security for payment of a debt.

  • Mortgage Originator

    An individual or company that assist buyers in applying for a mortgage, homeloan or building loan, with the different banks.

  • Mortgagee

    The lender usually a bank, that advances or lends money on the security of a property purchased.

  • Mortgagor

    The borrower, who borrows from a lender by mortgaging his property to the lender as security.

  • Net Income

    The borrower's gross income minus tax and other deductions.

  • Nominee

    The person nominated or appointed by another person for a specific purpose.

  • Null and Void

    A legal expression, meaning a final cancellation or lapse of an agreement without any legal effect.

  • Occupation

    The date when the buyer is entitled to physically occupy the new property.

  • Occupational Rent

    An amount paid by the person occupying the property to the party in whose name the property is registered, if the registration of transfer does not take place at the same time as the occupation date.

  • Offer to Purchase

    See Agreement of Sale.

  • Option

    An offer made to a person coupled with an undertaking by the person making the offer not to revoke his offer for a specific period.

  • Participation Quota

    Used to calculate the individual owner’s monthly levy in a sectional title, it is determined by dividing the size of each section into the total floor area of all the sections.

  • Partnership

    A contact between a minimum of two and a maximum of twenty persons, to carry on business in common. There are no formalities required to start a partnership and it is not a separate legal entity. Partners are personally liable for partnership debts.

  • Patent Defect

    See defects.

  • Pre-approval

    Assesment by a financial institution, it states the amount of the homeloan a person qualifies for.

  • Possession

    It passes to the buyer on registration of transfer, with all obligations and rights to the property passed to the new owner.

  • Power of Attorney

    A legal document authorizing one person to act on behalf of another.

  • Progress Payments

    Payments made to the building contractor, by the bank, from the customer’s building loan account, as building work progresses. The assessor does an inspection and releases the retention accordingly.

  • Rates and Taxes

    Taxes are levied on all property owners by the municipality. Rates are included in the levy if you buy Sectional Title. They are payable on a monthly basis and are calculated as a percentage of the value of the property.

  • Rates Clearance Certificate

    Issued by the local authority stating that the rates and taxes have been paid to a future date in respect of the property.

  • Real Right

    A right over or in respect of immovable property and registered against the title deed of the property.

  • Realtor

    A person licensed to negotiate and transact the sale of real estate on behalf of the property owner. Also see estate agent

  • Registration of Transfer

    The process whereby ownership of property transfers from the seller to the buyer via a Deed of Transfer.

  • Repo Rate

    A credit management tool used by the South African Reserve Bank to regulate customer spending in the country.

  • Resolutive Condition

    The contract is immediately binding and will remain binding unless the condition is not fulfilled.

  • Risk Profile

    A person’s credit worthiness.

  • Sectional Title

    A development made up of sections, whereby all section owners are members of a Body Corporate. Each section owner is responsible for their own section.

  • Sectional Title Register

    A register of sections in a sectional title scheme registered in the deeds office.

  • Second Bond

    An additional loan on a home.

  • Security

    Collateral for the bank that a client pledges in case they default on their mortgage payment.

  • Sequestrated

    Declaring a person insolvent and passing his/het estate into the hands of the Master of the High Court

  • Servitude

    A registered right (as per the title deed) that a person has over the immovable property of another.

  • Shareblock

    A buyer acquires a share in a company that owns the shareblock scheme, which entitles the buyer to use and occupy a specific unit. A shareblock buyer never receives the title to the unit.

  • Simplex

    A sectional title unit on one level with no stairs.

  • Smallholding

    A property of maximum 20 hectares situated within close to a built-up area.

  • Stamp Duty

    A tax imposed by the government. Discontinued

  • Statutory Law

    Written law of the country.

  • Subdivision
  • Surety

    A person who stands as guarantor for a loan for someone else.

  • Survey
  • Surveyor General’s Diagram

    A diagram that shows sub-divisions, servitudes and expropriations.

  • Suspensive Conditions

    Conditions written into the Offer to Purchase by either party that must be fulfilled for the agreement to become unconditional and legally binding.

  • Tenant

    A person who occupies a property, but does not own it and pays rent in return.

  • Title Deed
  • Townhouse

    A general term for either a simplex or a duplex

  • Transfer Costs

    Costs payable for the registration of a property and include transfer duty, conveyancing fees, and registration fees.

  • Transfer Duty

    A tax levied by the government on the transfer of land. If the purchase price includes VAT no transfer duty is payable.

  • Transferring Attorney

    Appointed by the seller to attend to the transfer of the property into the name of the buyer.

  • Trust

    A contract between the founder and the trustee in terms of which the trustee is to administer the trust fund for the benefit of the beneficiaries.

  • Trust Account

    The separate interest bearing accounts used when attorneys and/or realty companies hold money for people, until these monies and interest have to be paid out to whom they are owed.

  • Trustee

    A person appointed to manage the affairs and assets of a trust. In terms of sectional title, the trustees attend to the day-to-day running of the scheme, which includes the collection of levies and the employment and management of staff.

  • Valuation Fees

    The amount that a financial institution charges to assess the property prior to granting the finance that has applied for.

  • Value Added Tax (VAT)

    Tax on goods that is levied on the value added that results from each exchange. If the seller is a "VAT Vendor", VAT may be payable and not transfer duty, or, if the Purchaser is a Vendor, transfer duty may be payable

  • Voetstoots

    “To sell it as it stands” without any guarantees given by the seller as to the condition of the property, the seller therefore cannot be held responsible for latent or patent defects. The property is sold "as is".

  • Waiver of Lien

    A legal document where a contractor waives his common law right to hold control over a property if he is not paid in full.

  • Zoning

    The purpose for which your property may be used, for example, residential or business as deemed by your local authority.