Will the Real Property Owner Please Stand Up?

Private Property South Africa
Lea Jacobs

Given the prevalence of fraud and corruption in this country, buyers have often been warned about the dangers of buying a property from someone who is not the legal owner. Criminal activities aside, there are times when the seller is not the legal owner and although their intentions may not necessarily be dishonest, the outcome may cause havoc when it comes time to transfer the property into the new owner’s name.

"We have all seen the tragic results of the land scams in which bogus 'owners' periodically fleece poor people desperate for a place to build a home with their life savings," says Braam de Jager, national operations manager of Aida.

"But problems can also arise in the more formal real estate sector if the person who signs the offer to purchase does not actually own the property - even if there is not the same intention to defraud the buyer."

He quotes various examples of when this can occur and says that the most common instances are when elderly parents have moved into a retirement home and entrust the sale of the family home to an adult child, or when an owner who has been transferred asks a friend to handle the sale.

In the first scenario, problems can also arise if the parent (and legal owner of the property) dies before the transfer goes through. In many cases, the deceased owner's will may make provision for a usufruct, permitting the surviving spouse to have use of the property for the rest of his or her natural life.

In other words, a change in circumstances may result in various people having legitimate, but conflicting claims to a property. Even if these can be resolved, the time, money and effort it takes to do so destroys the potential benefit to be derived from the sale had it had gone through without incident. While legal remedies may be available, be aware that these can be costly and time-consuming enough to wear out both your financial ability and mental resolve.

"Even worse," says De Jager," you might then miss out on acquiring another property at a good price while waiting for the legal tangle to be cleared up and your deposit to be refunded. You might even have to incur the additional cost of renting accommodation while you go back to the search for a new home."

The problem, he says, comes down to the fact that the law does not stipulate that the seller of "immovable" property such as a house or flat must actually be the owner of that property. "It does, however, stipulate that the person who is registered at the Deeds Office as the owner is the only person legally entitled to sign off on the transfer of the property to a buyer.

"Home seekers can, however, avoid such potentially costly mix-ups by dealing only with properly qualified and experienced estate agents, who will establish who actually owns a property before drawing up a sales agreement," he notes.

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