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HELPFUL INFORMATION > Glossary of Terms - Property. Property Power 12th Edition Magazine & Disc 19
   
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Glossary of Terms - Property.
 



Click on the alphabet below to take you to the relevant term.

                   
                             


   


A  
     
Act
An Act is a form of legislation passed by the courts for the government.

Addendum
An Addendum is a supplementary agreement to an original sale contract covering points agreed to afterwards. It is a separate agreement in its own right and, if it contradicts the original in any way, it is presumed to overrule it.

Administration Fee
The bank charges a monthly Administration Fee to handle your home loan.

Agent's Commission
This is a fee charged by an estate agent for the services rendered to a seller, for selling his property. Estate agents always have to pay VAT on their commissions. Unless otherwise agreed the VAT will be added to the agreed commission. The seller pays the commission on registration and, if he is a vendor he may, in appropriate circumstances, recover the VAT paid.

Agreement of Loan
The Agreement of Loan is the contract that is drawn up by your bank and which is signed by you when a bond is approved and granted. This contract contains all relevant details pertaining to your bond, such as interest rate application, bank charges, insurance premiums and monthly instalments.

Agreement of Sale
The Agreement of Sale, also referred to as the Offer to Purchase or Deed of Sale, is a legal 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. This agreement sets out the proposed purchase price and conditions on which the sale will take place. Once signed by all parties, it is a legal and binding agreement. No matter what the parties have agreed to verbally, no contract exists until an agreement of sale is completed and signed by both parties.

Ante Nuptial Contract
This is an agreement entered into by parties prior to getting married. The agreement will regulate the affairs of the parties both during and after the marriage. The parties will then be married out of community of property.
 
Articles of Association
This document forms part of the constitution of a company and contains valuable information about the company.

Assessment
An Assessment is the bank's assessed valuation of the property.

Assessment Fees
This used to be the amount that the bank would have charged you to assess the property from which you were applying for a bond, prior to granting you the finance. They were also known as inspection fees or valuation fees. In terms of the National Credit Act which came into effect on 1 June 2007, this fee is no longer changed by the bank.

Assessor
An Assessor is the Bank's valuator of the property.

Association Agreement
An Association Agreement is an agreement concluded between the members of a close corporation, which states for example the contractual capacities of the members.

Attorney Allocation
Attorney Allocation means that the banks have specific attorneys they deal with, who are allocated to do registrations on behalf of that specific bank.

Authority Forms
Every borrower has to authorise the payment of the proceeds of a loan. When a property transfer is taking place simultaneously, different guarantees will be issued and authority forms have to be signed by the borrower before they can be furnished.

Authority to Pay
This is a mandate authorising the bank to make payment of the proceeds of a new loan once it is registered. The borrower signs at the bank's attorneys and they then issue guarantees in favour of the seller, developer or builder, payment is made in accordance with certain completion dates being met.
     

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B  
     
Bankers Acceptance (BA) Rate
The Bankers Acceptance (BA) Rate is a 3 month deposit instrument offered by the banks. It is similar to any other 3 month fixed deposit except that it is usually not offered to the man on the street but to big institutions with large amounts to deposit at a time, typically over R10 million.

Bond Assurance
Bond Assurance also referred to as Home Loan Insurance/Assurance, or Loan/Mortgage Protection Assurance is an alternative for life assurance, taken out on the life of the borrower to cover the amount owing on your home loan in the event of death or disability. This life assurance is in the banks favour to pay any outstanding monies in the event of death of the borrower.

Bond (Mortgage)
A Bond (Mortgage) is an agreement between the customer and a bank in the form of a home loan.

Bond (Registering) Attorney
The Bond (Registering) Attorney is appointed by the bank, which will hold the new mortgage bond (home loan) over the property. This attorney attends to the registration of the new bond in favour of the bank.
 
Bond Term
A Bond Term is the time period, over which you have to repay your home loan.

Breach Clause
A Breach Clause is a condition in a contract, which obliges a seller to give a defaulting buyer written notice to remedy his breach of contract within a specific period (usually seven days) before he can cancel the sale.

Bridging Finance
Bridging Finance is a short-term loan to cover your expenses until you receive funds that are anticipated, usually from a transaction in progress, to conclude another transaction.

Building Loan
A Building Loan is a loan to finance the construction of a dwelling, additions or building improvements. Once you have qualified for the loan, you do not actually get the loan amount paid into one of your accounts, progress payments are made to the contractors by the bank, from your loan account, as completed work progresses and interest is only charged on advances already paid out.
     

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C  
     
Cancellation
A bond is officially cancelled when the debt owing is paid in full and the bank's attorneys register the cancellation at the Deeds Office. A fee is payable to the bank's duly appointed attorneys for this service.

Cancellation Attorney
The Cancellation Attorney is appointed by the bank, which holds the current mortgage bond (home loan) over the property. This attorney attends to the cancellation of the seller's bond.

Cancellation Figures
Cancellation Figures consist of the outstanding amount on a home loan being cancelled, as well as the interest and any other costs required to settle the home loan.

Capital Gains Tax
Capital Gains Tax is basically a government charge, levied on the resale of assets. All taxpayers, including individuals, trusts, companies and corporations, are taxed on the profit they make from the sale of (or otherwise dispose of) asset of a capital nature or property.

Capital Redemption
Capital Redemption means repaying the capital amount as well as opposed to just the interest amount on the monthly bond repayments.

Cession of Insurance Policy
When banks require their borrowers to take out life assurance to cover their bonds and the borrowers choose to use existing policies to cover this requirement, they will have to sign a form ceding the policy to the bank as surety for the home loan.

Clause
A Clause in a contract is a condition which renders the operation and consequences of the contract as a whole dependent on an uncertain future event.

Clearance Certificate
This certificate is issued by your local authority or municipality (and in some cases by your Body Corporate or Home Owner's Association) to confirm that all rates, taxes and/or levies are paid up to date. Property transfer cannot take place without this certificate.

Close Corporation
The Companies Act 71 of 2008 prohibits the registration of any new close corporation after 1 May 2011. A Close Corporation is a form of business entity similar to a company. Only natural people can be members of a Close Corporation and the number of members of a Close Corporation is limited to ten.

Cluster Home
A Cluster Home is a freehold property in a development of similar houses, usually with good security and limited access. Each subdivided stand in the development is exclusively bought and individually owned.

Collateral
Collateral is the amount of security provided to secure a home loan.

Common Law
Common Law is the law which applies if the parties to a contract have not reached agreement on a specific legal issue in their contract, or if legislation does not specifically deal with a matter.

Company
A Company is a trading entity that is commonly used for commercial activity.
 
Compliance Certificate
An Electrical Compliance Certificate is required by law for the property to be transferred to the buyer's name. This, and any electrical repairs that need to be made, is for the seller's account. The certificate is issued by a qualified electrician. You may also be required by the buyer's bank to provide a Beetle/Infestation Clearance Certificate.

Condition
A Condition in a contract is a clause which renders the operation and consequences of the contract as a whole dependent on an uncertain future event. A Suspensive Condition is whereby the validity of the contract is made subject to the occurrence (or non-occurrence) of a future event, e.g. the granting of a bond of a certain amount or the sale of another property before a certain date. Only if and when the condition has been fulfilled will an enforceable contract exist. In the case where a Resolutive Condition is stipulated in a contract, the contract is immediately binding and will remain binding unless the condition is not fulfilled.

Conditions of Loan
Some banks, in addition to their bond and loan agreement conditions, require their borrowers to sign a separate document setting out all their loan grant conditions. Borrowers cannot negotiate or change these conditions.

Conditions of Title
Conditions of Title are restrictive conditions limiting an owner's rights over his/her property, which are recorded on the property's title deed. They cover matters such as building limitations, mineral right reservations, servitudes, etc.

Consolidation of Debt
Consolidation of Debt is 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.

Conveyancer
A Conveyancer is an attorney (lawyer) who is qualified to attend to the registration and transfer of immovable property, and/or the cancellation of bonds.

Conveyancing Costs
These are the costs payable to the attorney appointed to attend to the transfer of the property from the seller's name into the buyer's name.

Cooling-off Right
The Cooling-off Right is a statutory right, recorded in Section 29A of the Alienation of Land Act, giving a buyer of a residential property costing R 250 000.00 or less the right to withdraw from the sale within five days of signing an offer to purchase.

Costs (or Cover) Clause
A Cost (or Cover) Clause is an additional amount that is added to the capital amount loaned for a mortgage to cover any additional costs such as legal fees, penalties, interest, repossession costs, fire premiums, and so on. These provisions are made in the Mortgage Loan Document.

Cost Declaration
Estate agencies occasionally get their sellers and buyers to sign addendums providing for the transfer costs to come off the proceeds of the loan without the banks knowing. Banks often require their attorneys to sign declarations disclosing such addendums.

Credit Record
Your Credit Record is your previous payment history.

Creditor
A Creditor is someone to whom you owe money.
     

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D  
     
Damp Proofing Certificate
A Damp Proofing Certificate is a clearance report on the work carried out by a specialist damp proofing contractor, stating that the problem has been rectified and that it will not occur again within a specified time.

Debit Order
A Debit Order is the required method of home loan instalment repayments. The buyer gives the bank permission/instruction to debit your account to pay your monthly instalments. This also applies to any insurance premiums that may be due and which are normally debited once annually.

Debtor
A Debtor is someone who owes you money.

Deed
A Deed is a legal term for a formal legal document that is signed, witnessed and delivered to affect a conveyance or transfer of property or to create a legal obligation or contract.

Deed of Sale
The Deed of Sale, also referred to as the Offer to Purchase or Agreement of Sale, is a legal 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. This agreement sets out the proposed purchase price and conditions on which the sale will take place. Once signed by all parties, it is a legal and binding agreement.

Deeds Office
The Deeds Office is a government department responsible for the registration of transfer of immovable property.

Deed Office Registration Fees
Deed Office Registration Fees are imposed by the registering Deeds Office for every transfer and bond registration that they process. The amount due is paid by the buyer.

Default Judgement
If a summons is issued against someone and they do not defend it, then the claimant will obtain a Default Judgement against the person who did not defend the summons.


 
Defect
A Latent Defect is a fault or flaw that is not immediately detectable, or is hidden from view on inspection of the property. A Patent Defect is a fault or flaw that is immediately detectable, and is not hidden from view on inspection of the property.

Deposit
A Deposit refers to money you have readily available at the time that you apply for a home loan, which you would use as part of the payment on your new property. This deposit that you 'put down' on your property, will decrease the amount you have to finance. When renting property, a Deposit also refers to an amount equal to +/- 1 months rent, which you pay to the landlord upfront. This amount is used as security in the event that you cause any damage to the property while renting it.

Domicile Branch
A Domicile Branch is the branch of the bank where the customer's home loan is held.

Domicilia Citandi et Executandi
Domicilia Citandi et Executandi, also referred to as Domicilium, is the physical address you give for any legal documents and notices to be served to you. 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. This may not be a PO Box or Private Bag Address.

Draft Mortgage Bond
Every borrower has to initial a draft mortgage bond, which will thereafter be registered in the Deeds Office. This document is a standard one and every bank has its own uniform bond document for all bonds it grants throughout the country.

Duet House
A Duet House is one of two separate freestanding or attached units on one stand. Duet houses can be freehold properties or sectional title units.

Dwelling
According to the Rental Housing Act, a Dwelling is any of the following: Any House, Flat, Apartment, Room, Hostel Room, Hut, Shack, Outbuilding, Garage or Demarcated Parking Space leased as part of the lease. Agricultural Land, Commercial and Industrial Properties are not included as Dwellings.
     

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E  
     
Electrical Compliance Certificate
An Electrical Compliance Certificate is required by law for the property to be transferred to the buyer's name, stating that the electricity installation on a property, from its supply point, is safe. The certificate and any electrical repairs that need to be made, is for the seller's account. The certificate is issued by a qualified electrician.

Entomologist's Certificate
An Entomologist's Certificate is a certificate to be obtained by law in some coastal provinces before transfer of a property can take place confirming that its structure is free of wood borer or termite infestation.

Escape Clause
An Escape Clause is a condition in an offer to purchase contract giving the seller the right to cancel it if he gets a higher offer from someone else. This clause is sometimes inserted when the first buyer is given time to sell his own property first.

Estate
When a person dies, all their assets and liabilities will be placed in their deceased Estate. An executor will then be appointed to wind up the deceased Estate.

Estate Agent Introductory Commission
Most banks pay the Estate Agents an Introductory Commission for business that is passed their way.
 
Estate Duty
Estate Duty is calculated at 20% of the value that your net estate assets exceeds R 3 500 000.00 at the date of your death. Proper tax planning will ensure that you will exclude certain assets from your estate. This will ensure that any capital appreciation that those assets experience will not be taxable in the hands of the deceased estate and is therefore to the tax advantage of your estate and to the benefit of those you leave behind.

Equity
The value of your ownership in an asset. In the case of property, this will be based on what you have actually paid out of your own pocket as well as the market value of the property. Positive Equity is the amount by which the value of a bonded property exceeds the amount owing on the loan. Negative Equity is the amount by which the amount owing on a bonded property exceeds the value of the property.

Expropriation
Expropriation is where the local authority needs a portion of or the entire property for its use. The bank would require a letter from the customer and the local authority, and an assessment by the bank will need to be completed in order to determine the value of the remaining security.
     

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F  
     
FICA Documents
The new FICA Act requires all banks, conveyancers and estate agencies to obtain certain documentation from all their clients and to report any transactions where they are suspicious about the origin of the funds.

Fidelity Fund
A Fidelity Fund is a fund that pays out if an attorney or estate agent, for example, misappropriates or steals your money.

Finance Charges
A Finance Charge is the interest charged on a loan.

Fixed Expenses
Fixed Expenses are monthly bills to be paid, usually for a set amount within a certain time period. These include accommodation i.e. rent or home loan repayments and insurance.

Fixed Interest Rate
A Fixed Interest Rate is the term used to describe a fixed home loan rate, which does not fluctuate with the interest rate. Your home loan rate can be fixed for a certain period, usually a year.


 
Fixed Repayment
Having a Fixed Repayment means that your home loan repayments do not fluctuate as the interest rate fluctuates. It remains constant for a certain period, and goes hand-in-hand with Fixed Interest Rates.

Fixtures and Fittings
Fixtures and Fittings are attachments to a home, which are deemed to permanently belong to it. They include pool-cleaning equipment, light fittings, curtain rails, TV aerials and so on. It needs to be stated in the offer to purchase whether these items are in fact permanent fixtures.

Flexible Bonds
Some banks have a special addendum they require their borrowers to sign with their conveyancers when granting them access facilities on their bonds. Borrowers should obtain written confirmation of this effect.

Freehold
Buying a Freehold means buying the home as well as the land it is built on, as opposed to a sectional title unit.

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

Further Loan
A Further Loan is an additional loan or second bond on a home usually used for renovations.
     

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G  
     
Gross Income
Gross Income is the total amount you earn, before anything like tax, medical aid or pension payments have been deducted.
 
Guarantee
A Guarantee is a formal letter (a promise) issued by the bank to the transferring attorney, undertaking in writing to pay the purchase price (or outstanding amount) on registration of transfer of the property into the name of the buyer.
     

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H  
     
High Court
The High Court used to be known as the Supreme Court and today fulfils the same function as the Supreme Court did in the past.

High Demand
High Demand is a situation where a seller has more than one interested party who is willing to purchase the property. The seller can usually command a higher price and so settle on a final buyer.

Home Owners' Assurance (or Insurance)
All banks require their mortgaged properties to be adequately insured and each borrower will be required to sign a form ceding the relevant policy bank to the bank as security against future damage to the property caused by fire, rain, a broken geyser and so on.

Home Loan
A Home Loan is 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. It is the amount the bank will lend you to pay for your home.


 
Home Loan Application
Every bank requires its borrowers to sign a formal application form which is usually very detailed. When bonds are applied for online or through mortgage originators, this form will have to be completed and signed when visiting the bank's conveyancers.

Home Loan Insurance
Bond Assurance also referred to as Home Loan Insurance/Assurance, or Loan/Mortgage Protection Assurance is an alternative for life assurance, taken out on the life of the borrower to cover the amount owing on your home loan in the event of death or disability. This life assurance is in the banks favour to pay any outstanding monies in the event of death of the borrower.

House
The word House is used to describe a dwelling, usually in the form of a freehold property with a structure built on it for the use of living in it.

Householder's Insurance
Householder's Insurance is insurance against the loss of- or damage to the contents/belongings of a residence, i.e. furniture, appliances, clothing, jewellery and so on.

House Rules
Often the House Rules are applicable when buying or renting in a Sectional Title Development. These are the rules governing the control and management of the property.
     

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I  
     
Immovable Property
Immovable Property is defined as land and everything that is permanently attached to it. Income Tax Rate This is the rate at which you pay income tax. Companies and close corporations pay tax at the rate of 28% and individuals pay tax on a sliding scale according to the amount of income that they earn.

Income Tax Rate
This is the rate at which you pay income tax. Companies and close corporations pay tax at the rate of 28% and individuals pay tax on a sliding scale according to the amount of income that they earn (Maximum marginal rate of Income Tax for indiviuals is 40%).

Inflation
Inflation is the negative effect that time has on purchasing power, or value to you, of your money. Over time, the value of your money declines.

Initiation Fee
An Initiation Fee is a once-off fee charged by the bank to offset the cost of opening the home loan account.

Insolvent
Being Insolvent means that you are unable to meet your debts or discharge liabilities. You are bankrupt.

Inspection Fees
This used to be the amount that the bank would have charged you to assess the property from which you were applying for a bond, prior to granting you the finance. They were also known as inspection fees or valuation fees. In terms of the National Credit Act which came into effect on 1 June 2007, this fee is no longer changed by the bank.


 
Instalment
An Instalment is the monthly amount payable on your outstanding debt.

Insurance
To insure your car or household contents means that you pay a monthly fee to an "insurance company" in return for a guarantee from that company that it will pay you out a certain amount of money if something unexpected (like an accident or robbery) happens.

Interest Bearing Account
When attorneys and/or estate agents hold money for people, it is deposited into separate Interest Bearing Accounts, until these monies have to be paid out to whom they are owed. The interest accrued during this time is paid out to the person who gave the money to the attorney or estate agent. The governing bodies of attorneys and estate agents have created a guarantee system to protect the public against the misappropriation of their funds by the relevant attorneys or estate agents.

Interest Rate
When a financial institution lends you money, they charge you a percentage of that loan, which is payable monthly. This percentage is determined by the Interest Rate, which is a term used to represent all the individual rates charged in the lending & borrowing process. These include, among others, the Bank Rate (which plays a dominant role in a countries money supply), the Prime Lending Rate of banks, the Bankers' Acceptance Rate and the Rate on Government Stock.
     

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J  
     
Johannesburg Interbank Agreed Rate (JIBAR)
The Johannesburg Interbank Agreed Rate (JIBAR) is a 3-month deposit rate. It is a daily updated South African money market rate as indicated by a number of local and international banks. The banks are polled daily at approximately 10h30 and asked for their mid-point (between Bid and Offer) 3-month deposit Banker's Acceptance Rate (quoted as a yield). The highest two and lowest two rates are eliminated and the remaining rates are averaged and rounded to three decimal places. The rate achieved is in yield form and is quoted as the 3 month JIBAR rate. This rate is also published each day by 11h00 on Reuters on the SAFEX page.
 
Judgement
A Judgement is a legal recording of an inability to honour a debt.

Jurisdiction
Each court will have particular Jurisdiction to hear certain matters in terms of what the matter is about, the amount that the parties are disputing over and where the cause of action arose. Most sale agreements contain a clause providing that, should either party take the other party to court for any alleged default, he may do so in a Magistrates Court even though the amount in dispute may exceed its normal jurisdiction.
     

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K  
     
No Current Listings
 
     

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L  
     
Landlord
A Landlord is the person who lets out a property to someone else. He/she can be the owner, but can also be the Lessor who is letting the property on behalf of the owner.

Latent Defect
A Latent Defect is a fault or flaw that is not immediately detectable, or is hidden from view on inspection of the property.

Lease Agreement
The Lease Agreement is a contract between an Owner/Landlord/Lessor and a Tenant/Lessee, whereby the landlord allows the tenant temporary use of a dwelling, in return for payment known as rent.

Leasehold
The township developer or local authority owns the property but grants Leasehold rights.

Legislation
Legislation, also referred to as statute law, is passed by the South African parliament, which is the supreme law-making body in the country. Apart from statutes, which are acts of parliament, other forms of legislation are ordinances and proclamations of the provincial councils, and bye-laws of municipal councils.

Lessee
A Lessee/Tenant is a person who occupies a property, but does not own it. The Lessee pays rent in return.

Lessor
A Lessor is the person who lets out a property to someone else. He can be the owner, but can also be the Landlord who is letting the property on behalf of the owner.

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
A Levy Clearance Certificate is 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.

Life & Disability Insurance
Also known as Life Assurance. Every bank is entitled to require, as a condition of loan grant, that the borrower cede an adequate insurance policy to the bank to cover the loan in the event of the borrower's death or disability. The bank cannot insist, however, that the borrower do this through the bank's own insurance company.

Loan Agreement
All borrowers must sign a loan agreement which sets out all the details of the loan and the bank's conditions. Borrowers should look after their copy of this document as any future disputes on any point is likely to be decided on this document.

Loan Protection Assurance
Bond Assurance also referred to as Home Loan Assurance, or Loan/Mortgage Protection Assurance is an alternative for life assurance, taken out on the life of the borrower to cover the amount owing on your home loan in the event of death or disability. This life assurance is in the banks favour to pay any outstanding monies in the event of death of the borrower.

Loan to Value Ratio
Loan to Value ratio is the amount expressed as a percentage of the property's value that the bank is willing to lend the customer. It is based upon the bank's estimated value of the property and the loan amount required.

Lodgement
Lodgement is the act of handing in the necessary documents at the Deeds Office for checking and registration.
     

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M  
     
Mandate
A Mandate is an agreement between the seller and the estate agent to market the property. Market Value Market Value is the amount, that a willing and financially able buyer would pay, to a seller, provided that the property had been effectively exposed to the market for a reasonable period of time.

Married In Community of Property
Parties that are married in community of property have a joint estate. Both spouses administer the estate together and any immovable property will normally be registered in both spouses' names.

Married Out of Community of Property
Parties that are married out of community of property have separate estates. Each spouse manages their own estate. Immovable property can be registered in the name of each spouse individually or in the name of both spouses, depending upon the manner in which the spouses bought the property.

Marital Status Affidavit
The bank's conveyancers, and often the bank itself, will require each borrower to sign a declaration disclosing his/her marital status. Conveyancers, in particular, have to be sure they have correct information when registering each bond.
 
Memorandum
This document forms part of the constitution of a company and contains valuable information about the company.

Mini Subtype House
A Mini Subtype House is a small, sub-divided portion of a large property, which is suitable for cluster housing developments.

Minor
A Minor is someone who is unmarried and under the age of 18.

Mortgage (Bond)
A Mortgage (Bond) is 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.

Mortgage Originator
Mortgage Originators assist homebuyers in applying for a home loan or building loan, with the different banks.

Mortgagee
A Mortgagee is a lender, usually a bank, who advances or lends money on the security of a property purchased.

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

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Null and Void
Null and Void is a legal expression, meaning a final cancellation or lapse of an offer to purchase agreement. Once an agreement is declared Null and Void, all parties to the agreement are back in the position they were in before the agreement was signed and leaves each party without any obligation to each other.

 
     

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Occupation
Occupation is when the buyer is entitled to physically occupy (move into) his new property. Occupation can be:
'Vacant', meaning that the buyer can move in or put a tenant in; or
'Subject to tenancies' meaning that the current tenant has a right to occupy the property until his lease agreement period is over.
Occupation is not 'possession'. Only an owner can possess, but anyone, i.e. a tenant can occupy.

Occupational Consideration
Occupational Consideration is also referred to as Occupational Rent or Occupational Interest. If the registration of transfer does not take place at the same time as the occupation date, Occupational Consideration is paid, either by the buyer to the seller, or vice versa.
 
Occupation Declaration
At least one local bank requires its borrowers to declare that they will personally be occupying their property or that someone else will do so with their consent. This is to prevent illegal occupiers from moving in, who may be hard to evict.

Offer to Purchase
The Offer to Purchase, also referred to as the Deed of Sale or Agreement of Sale, is a legal 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. This agreement sets out the proposed purchase price and conditions on which the sale will take place. Once signed by all parties, it is a legal and binding agreement.

Originator
Originators assist homebuyers in applying for a home loan or building loan, with the different banks.
     

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Patent Defect
A Patent Defect is a fault or flaw that is immediately detectable, and is not hidden from view on inspection of the property.

Participation Quota
The Participation Quota is used in sectional title to determine the individual owner's monthly levy. It is calculated by dividing the size of each section into the total floor area of all the sections.

Partnership
A Partnership is formed when two or more people get together to start a business or buy a property. There are no formalities required to start a partnership and a partnership is not a separate legal entity.

Permanent Fixtures
These are items in the property that are permanently affixed to the property, such as curtain rails and security gates.

Pledge
A Pledge is a certificate, often referred to as a 'Pre-approval Certificate', issued to you by your bank, which enables you to know in advance the precise limit up to which you may negotiate when house hunting. It states the amount of the home loan you qualify for.

Possession
Occupation is not Possession. Only an owner can possess (own), but anyone, i.e. a tenant can occupy. Possession passes to the buyer on registration of transfer, with all obligations and rights to the property passed to the new owner.
 
Power of Attorney
Together with the bank's mortgage bond, borrowers also have to sign a Power of Attorney authorising the bank's conveyancer to register the relevant bond against the title deed to the property.

Pre-approval Certificate
A Pre-approval Certificate, often referred to as a pledge, issued to you by your bank, which enables you to know in advance the price limit up to which you may negotiate when house hunting. It states the amount of the home loan you qualify for.

Prior Occupation
A buyer's right to take personal occupation of a property before transfer takes place. A rental, agreed to in advance between the parties, will be payable by the buyer until registration of transfer.

Proclamation
Proclamation means that the local authority (municipality) formally confers suburb status on a new area (formally farms lands or the like). This means that the authority will provide water, electricity, sewerage, refuse collection and other essential services.

Progress Payments
Progress Payments are 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.

Property Description
This is the definition of the property sold in a sale agreement. It can simply be its street address but usually records its erf number and township as described in the property's title deed.
     

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No Current Listings
 
     

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Rates and Taxes
Rates and taxes are payable on a monthly basis and are calculated as a percentage of the value of the property.

Rates and Taxes Clearance Certificate
A Rates and Taxes Clearance Certificate is issued by the local authority stating that the rates and taxes have been paid to a future date in respect of the property.

Registering (Bond) Attorney
The Registering (Bond) Attorney is appointed by the bank, which will hold the new mortgage bond (home loan) over the property. This attorney attends to the registration of the new bond into the name of the buyer.

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

Registration of Transfer
Registration of Transfer is the method of recording a change of ownership of immovable property in the Deeds Registry at the Deeds Office.
 
Rehabilitated Insolvent
A Rehabilitated Insolvent is someone who was declared bankrupt, but has been reinstated as a liquid debtor who is able to honour debts.

Repo Rate
The Repo Rate is one of the credit management tools used by the South African Reserve Bank (SARB) to regulate liquidity in the country (customer spending). The bank borrows money from the SARB to cover its shortfall. The Reserve Bank only makes a certain amount of money available and this determines the Repo Rate. If the bank requires more money than what is available, this will increase the Repo Rate - and vice versa.

Resolutive Condition
In the case where a Resolutive Condition is stipulated in a contract, the contract is immediately binding and will remain binding unless the condition is not fulfilled.

Risk Profile
Your Risk Profile is your credit worthiness. Do you earn enough money to repay the loan? Do you have any record of bad payments in the past, or are you "black listed"? This type of information will make a difference when applying for a loan.
     

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Safe Custody
Safe Custody is placing the bond documents in a safe place once an instruction has been issued and the bond has been paid up.

Second Bond
A Second Bond is an additional loan or further loan on a home usually used for renovations.

Sectional Title
A Sectional Title development is made up of sections:
Sections which are sold by way of sectional title, i.e. a dwelling;
Common property, such as driveways, stairways & lifts, gardens and so on, which are owned by all the section owners jointly; and
Exclusive use areas, which are portions of the common property, demarcated for use only by the owner of a particular section.
All section owners are members of a Body Corporate, which governs the sectional title scheme. Trustees are elected once a year at an annual general meeting of the Body Corporate. The trustees attend to the day-to-day running of the scheme, i.e. collection of levies, employment and management of maintenance staff and so on. A person pays levies and in terms of the Municipal Property Rates Act which was implemented nationally by 1 July 2009, municipal rates and taxes will be for the liability of each owner. Levies are payable by each section owner monthly to the Body Corporate. These levies are used to meet the costs of running the scheme. Each section owner is responsible for the costs of maintenance and upkeep of his own section and any exclusive use areas he may have. The Body Corporate is responsible for the costs of upkeep and maintenance of the common property.

Security
Security is collateral for the bank, in case a client defaults on payment.

Semi-detached House
A Semi-detached House is one of two houses that are attached to one another. These houses may be each on its own stand and bonded separately or on one stand and bonded together under one bond or sold as separate units under a sectional title scheme.

Sequestrated
You have been Sequestrated when you have had the bank and/or other creditors seize stock and/or other assets to recover unpaid debt.

Servitude
A Servitude is a right of access which allows a local authority access to a property for inspection or installation of pipes, sewerage lines, electricity cables and so on. It is registered against the title deed.

Share Block Company
A Share Block Company is a company which operates a share block scheme/development.
 
Share Block Schemes/Developments
Share Block Schemes/Developments are company owned properties where a customer would buy the share representing a unit/house. Seeing that no title deed can be registered, the bank cannot consider financing a home loan.

Smallholding
A Smallholding is a property situated within a 150 km radius of a built-up area, which does not exceed a size of 20 hectares and is able to be connected to a local authority water supply or has a borehole.

Solvency Affidavit
All borrowers are required to sign affidavits with the bank's conveyancers confirming that they have never been sequestrated. This can also become an issue when interdicts show up against defaulters with the same names as the borrower.

Stamp Duty
Stamp Duty was a tax imposed by the government on bonds, which was abolished on 1 March 2004.

Statutory Law
Statutory Law is the written law of the country.

Subdivision
Subdivision is the dividing of property into two or more portions.

Subject-to Sale
Subject-to Sale is an expression used in the offer to purchase document to describe that the sale contract will only become unconditional between the parties if and when the buyer sells his/her own property within a certain time period, usually 60 days.

Subsidy
A Subsidy is a housing allowance, which forms part of a remuneration package and the employer deducts bond repayments directly off the employee's salary. These are usually government employees.

Surety
A Surety is someone that stands as guarantor for a loan for someone else. If the debtor does not repay the debt, then the surety becomes personally liable to do so. Banks often require suretyships from people other than the borrower to adequately secure their loans.

Surveyor General's Diagram
A Surveyor General's Diagram shows sub-divisions, servitudes, expropriations and so on. It becomes a loan condition when the assessor cannot identify the property to be bonded, with the latest municipal map.

Suspensive Conditions
A Suspensive Condition is a clause in an agreement of sale whereby the validity of the contract is made subject to the occurrence (or non-occurrence) of a future event, e.g. the granting of a bond of a certain amount or the sale of another property before a certain date. Only if and when the condition has been fulfilled will an enforceable contract exist.
     

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Tax Certificate
A Tax Certificate includes a breakdown of how much interest and insurance was paid, as well as total repayments to the home loan account over a certain period.

Tenant
A Tenant/Lessee is a person who occupies a property, but does not own it. The Tenant pays rent in return.

Timeshare
Timeshare is a property development where occupancy time is sold. The bank does not grant loans for timeshare properties.

Title Deed
A Title Deed is a legal document, registered at the deeds office, as evidence or proof of ownership of a property. It also contains details pertaining to your specific piece of land. These details include:
The names of the existing owner
as well as the previous owner.
A full description of the property,
including its measured size.
The purchase price of the property
paid by the existing owner.
Any/all conditions restricting the use
or the sale of the property.
Any/all limited real rights registered in respect
of the property and what their nature is.
This document is prepared by the conveyancer. When transfer of the property into a new owner's name takes place, the existing Title Deed is superseded by a new Title Deed, which happens in the Deeds Office by way of signature by the conveyancer and the Registrar of Deeds.

Transfer Costs
Transfer Costs consist of transfer duty, conveyancer fees & VAT and deed office registration fees. Most banks, these days, will, in appropriate circumstances, advance a buyer's transfer costs as well as the purchase price of his property. A separate agreement has to be signed and the costs have to be repaid within a much shorter period than the loan itself.
 
Transfer Duty
Transfer Duty is a tax levied by the government on the transfer of land. If the purchase price includes VAT, i.e. when the seller is a VAT vendor, no transfer duty is payable.

Transferring Attorney
The Transferring Attorney is appointed by the seller to attend to the transfer of the property into the name of the buyer.

Trust
A Trust exists when the founder hands over assets to the trustee in his capacity as such, which assets are to be administered by the trustee for the benefit of a beneficiary.

or

A Trust is a contract between the founder and the trustee (or trustees) in terms of which the trustee is to administer the trust fund for the benefit of the beneficiaries.

Trust Account
When attorneys and/or estate agents hold money for people, it is deposited into separate interest bearing Trust Accounts, until these monies have to be paid out to whom they are owed. The interest accrued during the time these monies are kept is paid out to the person who gave the money to the attorney or estate agent. The governing bodies of attorneys and estate agents have created a guarantee system to protect the public against the misappropriation of their funds by the relevant attorneys or estate agents.

Trustee
A Trustee is a person appointed to manage the affairs of a trust. The Trustee manages the assets of the trust for the benefit of the beneficiaries.
     

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Valuation Fees
This used to be the amount that the bank would have charged you to assess the property from which you were applying for a bond, prior to granting you the finance. They were also known as inspection fees or valuation fees. In terms of the National Credit Act which came into effect on 1 June 2007, this fee is no longer changed by the bank.

Variable Rate
A Variable Rate fluctuates according to the fluctuation of the Interest Rate, as opposed to a Fixed Rate, which is set at a constant for a certain amount of time.

Variation Agreement
A Variation Agreement states that the bank may change the interest rate at any time without giving notice and you, as the customer, may not appoint your own insurers.
 
VAT (Value Added Tax)
VAT is a government levy, charged by vendors who are VAT registered, on the supply of goods or services rendered. It is usually calculated at 14% of the cost of the goods supplied or services rendered, and is added to the value of these services. With immovable property, the purchase price is deemed to include VAT if the seller is a Vat vendor. If the seller is not a VAT vendor, then Transfer Duty is levied.

Voetstoots
Selling a property Voetstoots, a Dutch expression meaning 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 such defects at a later stage, however a Voetstsoots clause does not protect the seller in respect of any latent defects on the property of which he was aware but intentionally did not disclose to the purchaser.
     

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Waiver of Insurance Claim
At least one local bank requires its borrowers to sign a document waiving any claim against the bank if the insurance on the property proves in time to be inadequate to cover any claim the borrower may have for damages.

Waiver of Lien
A Waiver of Lien is a legal document where a contractor waives his common law right to hold control over a property if he is not paid in full.
 
Waterproofing Certificate
A Waterproofing Certificate is a guarantee by a waterproofing contractor that the item certified has been adequately waterproofed in terms of the instructions specified by the manufacturer.
     

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Zoning
Zoning is the way the local authority determines the purpose for which your property may be used, for example, residential or business.
 


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