Compliance Paperwork for Property Sellers

There is increasing regulation, some through acts of parliament and some instituted at municipal level, on requirements to be met before a property can be transferred to a new owner. The sooner the property complies with these requirements, the quicker and more painless the sale. However, this means a load of paperwork to be completed by the seller and the seller’s estate agent.

Says Gerhard van der Linde, managing director of Seeff Pretoria East: “Non-compliance can cause delays, while full compliance can considerably speed up the sale and transfer process.”

Van der Linde says the most important compliance issues involve:

• Installations: Certain installations require compliance certificates before the property can be transferred. While municipalities differ in terms of specific requirements, these typically include electrical wiring, plumbing, wood borer beetle clearance, electric fencing, and solar and gas installations (more details below). Other areas of compliance may relate to the safety of swimming pools (a pool may need to be enclosed, preventing easy access from the street) and thatched-roof properties, which may require a lightning conductor.

• Building plans: While not necessarily a precondition, it is generally recommended that the seller obtains a copy of the building plans and ensures that all renovations or additions have been approved and are compliant, Van der Linde says. Anything that is not approved must be corrected and signed off by the municipality. Sellers must also ensure that all zoning requirements are met, and that there are no encroachments on property boundaries..

• Property Condition Report: In terms of the Property Practitioners Act, sellers must disclose all known material defects, both patent (obvious) and latent (hidden) to prospective buyers before they make an offer. The Act requires sellers to complete and sign a Property Condition Report (PCR), which must be annexed to the selling agent’s mandate, as well as the agreement of sale (further details below).

• Rates clearance certificate. This certificate is required before the property can be transferred, and is usually obtained by the conveying attorneys. It requires that all outstanding amounts owed to the local municipality in terms of rates and utilities are settled in full. “Most municipalities also require the lodging of funds to cover a period of time that it will take before the property is transferred. The surplus is refundable after transfer,” Van der Linde says.

Installation compliance certificates

Burger Huyser Attorneys lists the following compliance certificates sellers must provide, which confirm to the buyer that installations are safe and functional, and shield the seller from potential future liability:

• Electrical Certificate of Compliance (CoC): “This is a legal requirement under the Occupational Health and Safety Act. It certifies that the electrical installation is safe and up to code,” the law firm says. The certificate must cover any existing solar panel installation, regardless of when it was installed.

• Beetle (Wood Borer) clearance certificate: “This is not mandatory by law, but is often required by banks. It certifies that the property is free from beetle infestation in accessible wood areas, especially in older coastal homes.”

• Plumbing CoC: “If the property is in Cape Town, a plumbing CoC is required. It confirms the plumbing system is in good condition and complies with the city’s bylaws. This includes checking for leaks, illegal connections, and ensuring water is properly metered.”

• Gas CoC: “If the property has gas installations, such as gas stoves or geysers, a Gas CoC is required under the Pressure Equipment Regulations, confirming that the gas installation meets safety standards.”

• Electric Fence Certificate: “If an electric fence is installed, a separate certificate is needed in addition to the Electrical CoC. This ensures the fence complies with the Electric Fencing Regulations,” Burger Huyser Attorneys says.

The Property Condition Report

Yvonne van Taak, attorney at LB Vorster Attorneys, says that, as of February 2022, the Property Practitioners Act (“the Act”) requires the completion and signing of a PCR by the owner of immovable property, containing specific details about the condition of the property being sold (or leased). It is up to the estate agent (property practitioner) to ensure the PCR is completed and signed by the seller.

Sellers have a legal obligation to provide accurate and complete information regarding the condition of the property, Van Taak says. “Failure to disclose known issues or misrepresentation can lead to serious legal consequences, including, but not limited to, a delay in registration of the property transaction,” she says.

Van Taak says the offer to purchase generally includes a “voetstoots” clause that indemnifies the seller against claims for damages in respect of any defects relating to the property, unless the purchaser can prove that the seller was aware of the defects and failed to disclose them. “However, South African law outlines specific situations where the seller cannot use this clause as a defence to a claim for damages by a purchaser,” she says.

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