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Johannesburg - You will be protected by the National Credit Act if you buy property from a developer, but it is a different ball game when it comes to private sales, says Attorney Liora Bamberger of Liora Bamberger & Associates.
In a video interview with Fin24 Bamberger says this is because the sale of property is his normal business and his properties form his stock in trade. This means that the consumer protection act applies to the transaction.
Bamberger said this gives the buyer various rights and imposes certain obligations on the developer.
Watch the interview
She says when buying from a private individual who is selling his home, the Consumer Protection Act does not apply.
“In other words, you are liable in terms of the sale agreement which forms a contract and the basis of the transaction.
“Your rights and obligations are spelt out in the sale agreement and you are not protected by the Consumer Protection Act.
“That means, if you breach the sale (agreement) you may lose the deposit and you may be penalised and the seller can sue you for damages,” explains Bamberger.
She says a developer is also a VAT vendor and that means that value added tax is imposed on the transaction.
“Once there is tax imposed on the transaction the South Africa Revenue Service cannot tax you again in the form of transfer duty. So, when you buy from a developer there will be no transfer duties payable. However, there are still attorney fees.”
Bamberger says attorney fees are an issue that many people misunderstand. No transfer duty payable does not mean that the attorney does not charge fees.
“Fees will be payable unless the developer advertises the development to include all transfer costs.”
She says the buyer is always the party who pays the cost of transfer and his bond costs and as such he is protected by the conveyancing tariff.
The attorney also charges disbursements, which is usually excluded from the attorney fee.
These may include deeds office fees, postages and petties and deeds office searches, says Bamberger.
- Fin24
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In a video interview with Fin24 Bamberger says this is because the sale of property is his normal business and his properties form his stock in trade. This means that the consumer protection act applies to the transaction.
Bamberger said this gives the buyer various rights and imposes certain obligations on the developer.
Watch the interview
She says when buying from a private individual who is selling his home, the Consumer Protection Act does not apply.
“In other words, you are liable in terms of the sale agreement which forms a contract and the basis of the transaction.
“Your rights and obligations are spelt out in the sale agreement and you are not protected by the Consumer Protection Act.
“That means, if you breach the sale (agreement) you may lose the deposit and you may be penalised and the seller can sue you for damages,” explains Bamberger.
She says a developer is also a VAT vendor and that means that value added tax is imposed on the transaction.
“Once there is tax imposed on the transaction the South Africa Revenue Service cannot tax you again in the form of transfer duty. So, when you buy from a developer there will be no transfer duties payable. However, there are still attorney fees.”
Bamberger says attorney fees are an issue that many people misunderstand. No transfer duty payable does not mean that the attorney does not charge fees.
“Fees will be payable unless the developer advertises the development to include all transfer costs.”
She says the buyer is always the party who pays the cost of transfer and his bond costs and as such he is protected by the conveyancing tariff.
The attorney also charges disbursements, which is usually excluded from the attorney fee.
These may include deeds office fees, postages and petties and deeds office searches, says Bamberger.
- Fin24
Add your voice to our Property Issue:
* Write a guest post
* Share a personal story
* Ask the experts
