Interdicts can halt property transfers

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03 Jul 2013

The Institute of Estate Agents, Western Cape, is often called in to assist when buyers, sellers and estate agents experience problems.

When a court order authorising the auction of a property has been granted, the Registrar of Deeds is notified and places an interdict, in the form of an attachment, over the property records.

Annette Evans, regional manager of the Institute, says that they, in turn, will enlist the help of specialists in that particular field to answer any questions or deal with queries.

She says one query that has come up recently is whether an estate agent is responsible for checking if the seller’s property has any interdicts over it.

With the crash of the property market recently the above question has become more relevant, says Storme Heath, a director at C&A Friedlander Attorneys, who often sponsor training sessions and events held by the Institute.

She says often they see boards affixed to the gates of properties, alerting us to an upcoming auction to be held on the properties. "It seems that properties in a broad spectrum, from Salt River to upper end Constantia homes, have been affected by the fall in the economy.”

For a property to be put on auction, the judgement creditor (i.e. the bond holder/bank) needs to obtain a court order authorising the auction. When that is granted, the Registrar of Deeds is notified and places an interdict, in the form of an attachment, over the property records at the Deeds Office and if the seller wants to sell the property the bank would have to consent to the sale and have the attachment uplifted.

When the estate agent takes a mandate from a seller would be the time to ask whether there are any restrictions against transfer of the property, Heath says. The seller will be aware of any attachment order so should be able to tell the estate agent. If the property has been attached, the agent should contact the bank to find out the outstanding debt figure – which will give an idea what offers the bank will consent to.

Once an offer is made on the property it will be necessary to uplift the attachment in order to get it transferred to the buyer. Once the transferring attorneys have been appointed and when all the conditions to the sale (if there are any) have been met, the attorneys will liaise with the bank and give them all the necessary documentation to get the attachment uplifted.

The estate agent can make enquiries regarding interdicts on the property but the responsibility is on the transferring attorney to pick up any interdict once they receive a deed of sale.

When the bank is satisfied they will instruct their attorneys to notify the Sheriff to have the attachment uplifted and the Sheriff will notify the Deeds Office, who will update their records.

She says it sometimes happens that the bank issues summons, obtains an order, and attaches the property and, just before the auction date, the seller reaches an agreement with the bank. However, the attachment might still reflect on the Deeds Office records. The transferring attorneys will have to have this attachment uplifted before transfer can take place.

“In my opinion, however, the estate agent is not responsible for pre-checking whether there are any interdicts on the property. He might well not even have the tools at his disposal to correctly confirm whether or not there is an interdict in place.”

Heath says she suggests to agents that they can use the services of attorneys to help when taking the mandate, get copies of the Deeds Office printouts which will reflect any interdict, as well as a copy of the title deed for reference purposes. In this way the buyer will be able to see what conditions the property is subject to.

The estate agent can make enquiries regarding interdicts on the property but the responsibility is on the transferring attorney to pick up any interdict once they receive a deed of sale, she says. They have an obligation to then notify the estate agent, the seller and buyer of what they have picked up and they can liaise with the bank to get the attachment lifted, so that no delay in transfer takes place.

Evans says there are sometimes circumstances that can complicate property transactions, and it is always best to contact a professional to assist, but the Institute is available to help find the right people to answer queries if need be.

She says the IEASA is the professional body representing property professionals and this is why they arrange legal updates and training and encourage agents to attend these so that they can keep up to date with regulations and the consequences of such laws.

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