“Summertime, and the livin’ is easy.” (From George Gershwin’s Porgy and Bess)
Summertime brings long sunny days, leisurely holidays, family gatherings, and a property market waking up to a new season. It’s a great and exciting time to buy your dream home but be sure to follow these guidelines before you sign anything.
Let’s start with you finding the perfect house. It’s in the right area, it’s the ideal size for you, it’s in your price range, you have your finances in place, it’s a great investment, you can’t see any defects or problems, and – best of all – your family love it.
The agent produces a pen and an offer to purchase (“OTP”) form. All you have to do is sign on the dotted line and put the champagne on ice while you hold thumbs that the seller accepts.
Not so fast!
Like Julius Caesar crossing the Rubicon and declaiming “Alea iacta est” (“The die is cast”), signing the OTP is one of those pivotal decisions that will affect you and your family for decades to come.
That’s because there’s no going back. Your offer is likely to be irrevocable for a stipulated period (often 24 or 48 hours), and as soon as the seller accepts it, you are bound by an enforceable sale agreement which you won’t escape from easily.
So how can you ensure, before putting pen to paper, that you won’t regret it down the line?
Firstly: Investigate, investigate, investigate
Don’t let the sunny garden and sparkling pool distract you from the less glamorous but vitally important legal aspects of the process, such as these easily-overlooked risk areas:
- Title deeds and local laws: Now’s the time to have us check the property’s title deeds for any restrictions, servitudes, boundary issues and the like, and to make sure that local zoning laws will allow you to do any renovations, extensions or subdivisions you have in mind.
- You also need to be sure that the seller can provide you with plans passed by the local authority for any extensions or additions. If there’s a problem, it’s likely you and not the seller the municipality will be after, perhaps brandishing demolition orders and penalty notices. We can check for you before you buy.
- Neighbours, and the neighbourhood: Ask us to help you investigate whether your neighbours might be allowed to build extensions that will mess with your stunning sea views or impinge on your privacy, whether they could open up a business next door, whether the whole area might go commercial, or whether that lovely open bit of green space up the road could suddenly sprout a new townhouse development.
- Tenants or unlawful occupiers on the property: Don’t assume you’ll be able to wave them goodbye just because you’re the new owner. Occupants enjoy strong legal protections that survive transfer of ownership, so it’s essential to be clear on your legal rights before you commit to buying.
- Buying in a complex: You’ll be bound by the complex’s rules and regulations, and you’ll be affected by the financial stability (or otherwise) and future prospects of the governing Homeowners’ Association or body corporate. Ask us to check it all for you.
Secondly, does the Offer to Purchase protect you?
The critical thing here is that you will, with very little wiggle room, be bound by whatever you sign, whether you understand it or not. The old legal maxim “caveat subscriptor” (“let the signatory beware”) is a clear warning to never sign anything without fully understanding what you are committing to.
Do you really understand all the Latin bits and technical terms? For example, what exactly does that “voetstoots” clause mean, and how does it tie in with the seller’s “mandatory disclosure form”?
Moreover, because most OTPs are standard forms, you may well need to tweak the terms and conditions to meet your specific needs. How long will it take you to get bond approval, do you have to sell your own property first, when will you take possession and occupation, which fixtures and fittings stay and which can the seller remove, what happens with the tenant in the garden cottage, and so on. It’s vital to word all that properly.
Bear in mind that anything important to you should be recorded in black and white in your agreement. Don’t rely on verbal assurances or promises by the seller or agent.
Thirdly, understand the timelines and processes
Upfront planning is essential here, not just the initial family brainstorming session around what sort of house you’re looking for and where, and how your cash flow projections will work, but also what happens after your sale agreement is signed and sealed.
We’ll help you understand all that: how the whole process comes together from making your offer, through its acceptance by the seller, all the way to the actual transfer process. We’ll guide you through it all with as little hassle, risk, and delay as possible.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
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