South African Home Loan and Real Estate Terminology

Voetstoots - A Dutch expression meaning that a home is bought "as is" with all its patent and latent defects. A Seller can still be held liable for latent defects known to him which he fails to disclose to the home buyer.

Addendum - A supplementary agreement to an original sale contract or home loan agreement 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.

Suspensive condition - A provision in a contract suspending its operation until a specific condition is fulfilled. A clause stating that the sale will only be confirmed if a home loan is granted is an example of a typical suspensive condition.

Agreement of sale - The basic contract of sale and purchase between a willing seller and buyer. No matter what the parties have agreed to verbally no contract exists until an agreement of sale is completed and signed by both parties.

Subject-to sale - An expression used by estate agents to describe a sale contract which will only become unconditional between the parties if and when the buyer sells his own property. A time period of sixty days is usually allowed.

Offer to purchase - A document setting out the proposed purchase price and conditions on which a buyer is prepared to purchase a property. It will be submitted to the seller and, once he signs it, it becomes a valid sale agreement.

Breach clause - A condition in a contract obliging 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.

Cooling-off right - A statutory right, recorded in Section 29A of the Alienation of Land Act, giving a buyer of a residential property costing R250 000 or less the right to withdraw from the sale within five days of making a written offer.

Electrical compliance certificate - A certificate issued by a qualified electrician confirming that the installation on a property from its supply point is safe. Every buyer has to be in possession of one once he takes transfer of ownership.

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.

Null and void - A legal expression emphasizing a final cancellation or lapse of a sale agreement. It puts both parties in the position they were in before the agreement was signed and leaves each without obligation to the other.

Fixtures and fittings - These are attachments to a home which are deemed to permanently belong it. They include light fittings, curtail rails, TV aerials and eye-level ovens and may not be removed by the seller when he vacates the property.

Escape clause - A condition in sale contract giving the seller the right to cancel it if he obtains a better offer from another purchaser. It is usually inserted when the first buyer is given time to sell his own property first.