Handling property transactions

Mar 12, 2017 | Industry, News, Slider

“Managing client expectations is essential before the conclusion of the contract, during the transfer process and also afterwards”

Most buyers and sellers do not understand the legal principles associated with property transactions. Even those who are more frequently involved in the business of home ownership do not fully grasp the intricacies of the law and the procedures involved. Estate agents and conveyancers, too, have become complacent about adequately informing clients in this regard.

Knowledge illusion

Because we think we know the legal principles, we think our clients also understand them. Usually, however, we don’t have a full understanding of principles and procedures ourselves. More often, clients don’t know either – or their knowledge may be outdated. Your sellers may think they know how to close a utility account after registration because they sold a property 10 years ago, but they are often unaware of recent changes in this regard. The result: clients create their own expectations and jump to conclusions. When property professionals cannot deliver on these misguided expectations, clients then assign blame, whether the agent, conveyancer or another contractual party. It’s therefore important to provide clients with the facts. With the correct information, their expectations will be managed.

The legal links

When clients are given proper information, the legal relationships between role-players are managed and protected. Foremost lies the relationship between the seller and purchaser: each of the parties needs to understand their obligations and rights. Secondly, there is the relationship between the agent, the purchaser and the seller respectively. The perception exists that the estate agent carries certain legal obligations, when they do not. Clients then unjustly criticise a specific agent, the agency and agents in general as being unethical and unprofessional.

Thirdly, there are the relationships between the respective contractual parties and other role-players, including the conveyancer, the municipality, Sars and the relevant home owners’ associations. Both the seller and purchaser need information on the processes and anticipated time frames of each of the role-players.

Information dissemination

The conveying of information broadly takes place within three time periods:

1. Listing and Marketing

The seller and purchaser must be informed of certain issues before they enter into the agreement.

2. Conclusion of the contract

The purpose of the pro forma agreement is not only to legally bind the parties but also to explain various contractual elements.

3. Transfer

This is normally a stressful period for both parties, exacerbated by the legal jargon used by agents and conveyancers. It’s essential to relay information in a way buyers and sellers can understand.

“When clients are given proper information, the legal relationships between role-players are managed and protected”

Tiaan van der Berg is the director of MC van der Berg Incorporated. He is a specialist lecturer in deeds and notarial practice, formerly at the University of Pretoria, but now running his own training academy. He is involved with EAAB CPD seminars countrywide

Image: Supplied