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A| There are 112 entries in the glossary. |
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| AccessBond | This facility allows you to draw funds up to a predetermined loan amount. |
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| Administration fee | This is a monthly fee charged to cover the cost of maintaining your home loan account on the bank?s system. |
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| alienate | The Alienation of Land Act 68 of 1981 governs the alienation of immovable property. In terms of this Act ‘alienate’ means ‘sell, exchange or donate’. |
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| Alienation of Land Act | This law describes a property sale whereby the property is transferred into the buyer?s name at a later date. It is used mainly for customers who do not qualify for a home loan. |
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| Amount limit | This is the limit up to which you may transfer funds from your home loan account to another linked account via electronic facilities. |
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| Annual premium | This is the premium payable once a year in respect of a life assurance or a home owner?s insurance policy. |
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| arbitration | Procedure whereby parties to a dispute appoint an arbitrator to settle the dispute. The arbitrator’s decision is final and the parties are bound by it. |
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| Arbitration Tribunal | Body (or even a single person) appointed to settle a dispute by way of arbitration. |
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| Assessment | This is the bank's assessed value of the property. |
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| Assessment fee | This fee pays for the administration work that accompanies a property assessment. |
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| auction | Method of selling a property to a person who makes the highest bid. The person conducting an auction is called auctioneer. |
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| auditor | A person registered in terms of the Public Accountants and Auditors Act 51 of 1951 and whose function in an estate agency context is to ascertain whether or not an estate agent’s trust account has been properly managed. |
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| Authority to pay | This is a document whereby you authorise the bank to make payments out of your home loan account. It forms the basis from which guarantees are issued. |
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| Bank | A financial institution registered in terms of the Bank Act 94 of 1990. Home loan finance is a major part of a bank’s business. |
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| Board | The Estate Agency Affairs Board. |
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| Body Corporate | The controlling body of a sectional title scheme. |
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| Bond | See ‘Mortgage bond’. |
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| Bond costs | These are the conveyancer's fees, stamp duty and VAT. They are payable by the buyer to the attorney attending to the registration of the bond on behalf of the bank. Conveyancing fees and stamp duty are calculated on a sliding scale based on the bond registered. |
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| Bond term | This is the original term of the loan. |
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| Bondholder | Also known as a Mortgagee - see ‘Mortgagee’. |
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| Borehole certificate | This is a certificate issued by a specialist borehole contractor stating that the borehole yields a certain amount of litres per hour. These certificates are usually only required on agricultural holdings. |
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| Building height | Determines the maximum height of a building in order to fit into the overall urban character. |
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| Building lines | Building lines are on the one hand defined to keep an area on site clear where services run through or to provide access for service vehicles. On the other hand, building lines are defined to minimise or avoid conflict (eg in terms of privacy) between private (plot) and public (street) properties or between different private properties (adjacent plots). |
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| Building loan | This is a loan applied for to build a house. |
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| Building Society | Building societies used to be financial institutions registered in terms of the Building Societies Act 24 of 1965, and were then the main source of finance for home loans. All but two building societies were
later converted into banks.
The Building Societies Act (later renamed the Mutual Building Societies Act) was finally repealed in 1993, and the two remaining building societies were then converted into mutual
banks registered in terms of the Mutual Banks Act 124 of 1993.
Strictly speaking, therefore, there are no longer any ‘building societies’ in South Africa; only banks registered in terms of the Banks Act 1990, and mutual banks registered in terms of the Mutual Banks Act 1993. The expression ‘building society’ is however, still commonly used in practice and refers generally to a financial institution that can be approached for home loan finance. |
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| Canvassing | - Canvassing sellers: procedure whereby an estate agent contacts property owners for a mandate to sell their properties.
- Canvassing purchasers: procedure whereby an estate agent enquire from a person whether he wishes to buy property, or a particular property.
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| Cession | This is a customer?s policy that is ceded to the bank. Standard Bank would hold the cession, while Charter or Liberty Life would retain the policy document. |
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| Clearance certificate | This certificate is required from the engineer where reinforced concrete is being used. |
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| Client | The person who has given an estate agent a mandate to render an estate agency service for him. |
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| Close Corporation | A business entity registered in terms of the Close Corporations Act 69 of 1984. It may conclude agreements of sale or leases in it’s own name. |
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| CMA | Comparitive Market Analysis |
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| Code of Conduct | A set of ethical rules drawn up by the Estate Agency Affairs Board to regulate estate agents’ ethical conduct. The code is enforceable by law through disciplinary committees appointed by the Board. |
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| Collateral | This is the amount of security provided to secure the home loan. |
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| Commercial Property | A property used for business or office purpose, not for residential purpose. |
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| Commission | Remuneration paid to an estate agent by his client. |
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| Common law | The law which applies automatically unless excluded or amended by legislation or in terms of an agreement concluded between the parties to the agreement. The South African common law is the Roman Dutch Law. |
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| Company | A business entity registered in terms of the Companies Act 61 of 1973. A company may enter into agreements of sale or lease in its own name. |
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| Conduct Deserving of Sanction | Unethical or improper conduct on the part of an estate agent is referred to as ‘conduct deserving of sanction’. The grounds constituting conduct deserving of sanction by an estate agent are set out in the Estste Agency Affairs Act 112 of 1976. Disciplinary Steps can be taken by the Estate Agency Affairs Board against an Estate agent found Guilty of conduct deserving of sanction. |
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| Consolidation | This occurs where the customer owns two properties next to each other and would like them joined into one property. A new property description will be given and will be depicted on a Surveyor General Diagram. |
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| Contract | - A legally enforceable agreement, for Example an of lease or sale.
- In terms of the Alienation of Land Act 68 of 1981, a ‘contract’ refers to a sale land on instalments where the purchase price is payable by the purchaser to the seller in more than two instalments over a period exceeding one year.
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| Contract price | This is a fixed amount of what a contractor quotes to complete a house according to the plans supplied to him, with possible escalation built in. |
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| Conveyancer | An attorney who qualified to attend to deeds office transactions, such as the transfer of a property from a seller to a purchaser, or the registration of mortgage bonds and servitudes. |
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| Cooling Off Right | In terms of the Alienatin of Land Act 68 of 1981 certain purchasers of immovable property have
the right to revoke an offer to purchase or terminate a sale agreement within 5 days after the offer or sale agreement was signed by the purchaser. This is generally referred to a ‘cooling off right’. The right to cool off applies only in respect of properties which are used (or intended to be used) mainly for residential purpose an only if the purchase price is R250 000 or less (a higher amount may be prescribed by the Minister of Trade and Industry from time to time). The right does not apply in certain instances, for example where the buyer is a company, close corporation or a trust. |
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| Coverage | Determines the maximum area that a building should cover to leave a functional amount of private or semi-private space open on the site. |
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| Damp proofing certificate | This is a clearance report on the work carried out by a specialist damp proofing contractor, stating that the problem has been solved and that it will not occur again within a specified time. |
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| Deed of Sale | Evidence of a purchaser’s acquisition of legal title at a judicial sale, subject to redemption rights, if any. An offer to purchase becomes a deed of sale when both parties sign and meet the redemption rights. |
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| Deed Office Registration Fees | These fees are charged by the Deeds Office for registering the mortgage bond and title deed. |
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| Deeds office | This is a government department whose task it is to attend to the registration of transfers of immovable property. |
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| Defects | A patent defect is a defect which clearly visible. For the meaning of latent defects, see ‘Voetstoots’. |
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| Domicile | The place where a person is deemed to be permanenty resident. |
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| Domicilium Citandi et Executandi | This is a physical address where the delivery of legal notice will be accepted by a party to a written agreement. |
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| EDU | Economic Development Unit |
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| Electrical Compliance Certificate | This certificate is issued by an electrician and registered with the local authority to verify that the electrical installation of the property complies with local by-laws. |
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| Endorsement | Endorsement on a title deed: a note made on the title deed of a property by the Registrar of Deeds. |
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| Equity | This is the amount by which the value of a bonded property exceeds the amount owing on the loan. |
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| Estate Agent Introductory Commission | This commission is paid by the bank to estate agencies for introducing home loan business to the bank. |
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| Exporiation | Procedure in terms of which a property is taken over (usually by local authorities or the State) for specific purposes in the public interest. Compensation must be paid as Provided for in terms of the Expropriation Act 63 of 1975. |
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| FAR | Floor Area Ratio - Determines the total lettable floor area of a development or building. |
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| Finance | Money. Loan finance: money borrowed to pay for the acquisition of a property. |
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| Franchise | Some estate agencies carry on business in terms of a franchise, ie. they have an agreement with another party (usually a well- known company) to carry on business in a particular area under the latter’s name. |
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| Huur Gaat Voor Koop | ‘Lease goes before sale’. Where leased premises are sold before the lease has expired, the tenant may in terms of the huur gaat voor koop rule remain in occupation of the premises until the lease expires. In the case of a long lease (ie a lease for a period of 10 years or longer), this applies only if the lease is in writing and registered against the title deed of the leased premises, or if the purchaser at the time of conclusion of the sale knew that the lease was a long lease. |
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| Hypothec | Right of security over movables. In the case of a lease the lessor has hypothec (right of security)
over the lessee’s movable goods on the leased premises in order to secure payment of rent. |
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| Immovable Property | Land and everything permanently attached to it. |
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| Improper Conduct | See ‘Conduct deserving of sanction’. |
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| Industrial Property | Property used for industrial purposes, eg. factory premises. |
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| Insolvent | A person who is unable to pay his debts and whose estate is declared insolvent in terms of the Insolvency Act 24 of 1936. See also ‘Liquidation’ below. |
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| Installment Sale | Sale where the purchaser pays the purchase price (or a portion thereof) to the seller in installments (usually monthly). See ‘Contract (2)'. |
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| ITP | Integrated Transportation Plan |
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| Landlord | Lessor. |
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| Latent defect | This is a fault or flaw that is not immediately detectable, or is hidden from view on inspection of the property . |
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| Leasehold | The township developer or local authority owns the property but grants leasehold rights. |
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| Levy | This is the owner's proportionate share of the costs incurred by the complex for the month. |
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| Lien | Right of retention. Where a person has improved someone else’s property or has incurred certain expenses in respect thereof he may retain possession of such property until the debt due to him has been discharged. The right to retain possession is called a lien. |
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| Limited Real Right | A registered right over someone else’s property. Servitudes and mortgage bonds are limited real rights. |
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| Liquidation | The legal process leading to the dissolution of a company or close corporation. A company or close corporation declared insolvent is said to be ‘in liquidation’. A company or close corporation can, however, also be liquidated (wound-up) on grounds other than insolvency. |
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| Lodgement | This is when bond documents are presented at the Deeds Office for checking by officials before registration of the bond. |
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| Long Lease | A lease for a period of not less than 10 years; or for the natural life of the lessee or any other mentioned in the lease; or renewable from time to time indefinitely at the will of the lessee, or for periods that, Together with the first period of the lease, Amount to not less than 10 years. |
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| Mandate | An instruction or authority given to an estate agent to render a particular estate agency service for a client (the person conferring the mandate). |
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| Market Value | The price which a willing buyer will pay, to willing seller, for a property on a specific date. |
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| Mortgage Bond | A limited real right held by a moneylender (such as a financial institution) over the Immovable property of a borrowed to secure repayment of a loan owed by the borrower to the moneylender. A mortgage bond is registered against the title deed of a property. |
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| Mortgagee | The person or financial institution lending money to someone else against registration of a mortgage bond over the latter’s property. The mortagee then holds a mortgage bond over the property.
Also referred to as a bondholder. |
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| Mortgagor | The person who borrows money and who allows registration of a mortgage bond over his property to secure repayment of the loan. |
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| NHBRC | The National Home Builders Registration Council ensures that builders extend their commitment to customers by providing a five-year warranty. |
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| Nominee | The person nominated or appointed by another for a specific purpose. Sale agreements are sometimes drawn up on the basis that the property is sold to the purchaser ‘or his nominee’. |
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| Notarial Tie Agreement | This is similar to a consolidation, but the property description does not change. |
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| Null and Void | Without any legal effect. An agreement of sale or lease which is null and void is not valid in any respect and cannot be enforced by either party. |
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| Occupational Interest | A purchaser who has taken occupation of a property before it is registered in his name, is usually required by the seller to pay a monthly amount for such occupation. This amount is referred to as occupational interest (sometimes called occupational rent). |
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| Offer to Purchase | A formal legal agreement which offers a specified price for a specified property. The offer may be firm (no conditions attached) or conditional (certain conditions apply). An offer to purchase becomes a deed of sale when both parties sign and meet the redemption rights. |
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| Offeree | Person to whom an offer is made. In sale transactions, a purchaser usually makes an offer to a seller of a property. The seller is then the offeree, and the purchaser the offeror. See also ‘Offeror”. |
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| Offeror | Person who makes an offer. In sale transactions, the purchaser is usually the offeror i.e. the person who makes an offer to the seller of a property (the offeree) to buy the Property. See also ‘Offeree’. |
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| Option | An offer made to a person, coupled with an undertaking by the person making the offer (the offeror) not to revoke his offer for a specified period. The person to whom the offer is made (the offeree) is then said to have an option. The option is exercised when the offer is accepted timeously. An option falls away if the offer is not accepted by the offeree before the expiry date. |
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| Partnership | A contract between two or more persons (maximum 20) to carry on business in common.
A partnership is not a legal entity as such, and terminates if one partner retires or dies. Partners are personally liable for partnership debts. |
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| Person | A natural person or a legal person (such as a company, close corporation, local authority, etc). |
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| Rates | Rates are a form of taxation system, historically used to fund local government. |
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| Readvance | When you have repaid a portion of your home loan, you may borrow all or part of the loan amount. |
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| Real Right | A right over or in respect of property. Real Rights over or in respect of immovable property are registered against the title deed of the property. |
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| Registation Against Title Deeds | A right is registered against the title deed of a property when details concerning such right are stipulated on the title deed by the Registrar of Deeds in terms of the Deeds Registries Act 47 of 1937. |
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| Registered Right | A right over property registered in a deeds office against the title deed of the property.
The purchaser of immovable property is bound by the rights registered over the property whether or not he knew of their existence at the time of the sale. |
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| Resolutive Condition | A clause in an agreement of sale or lease which has the effect that the agreement will terminate on the occurrence of an event specified in the clause. Contrast this with a suspensive condition: see below. A typical example of a resolutive condition is a condition in an agreement of sale of a proposed sectional title unit stating that the agreement will terminate if the sectional title plan is not registered before or on a certain date. |
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| Restrictive Conditions of Title | Conditions stipulated in the title deed of a property prohibiting the building of certain improvements on the property or limiting the use to which the property may be put. A typical example is a condition in a title deed starting that a house must have a tile roof. |
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| Right of Pre-emption | A contractual right entitling a person to make the first offer to purchase a particular property.
Also known as a right of first refusal. Lease agreements sometimes provide that, should the lessor wish to sell the property, the lessee has a right of pre-emption to purchase it. |
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| RSDF | Spatial Development Framework |
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| SDF | Spatial Development Framework |
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| Servitude | A registered right which a person has over the immovable property of another. It usually entitles the holder of the servitude to do something on the property. A common example is a registered right of way to travel over property owned by another. |
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| SPTN | Strategic Public Transport Network |
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| Subdivision | When land is subdivided, it is divided into two or more portions. A specific legal and technical procedure must be followed. |
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| Suspensive Condition | A clause in agreement of sale or lease in terms of which the agreement will become enforceable only if the event stipulated in the clause occurs. A typical example is a clause in an agreement is subject to the suspensive condition that the purchaser obtains a loan from financial institution before or on a certain date. |
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| Title Deed | A document filed in a deeds office containing details of a property and its owner. A title deed is proof of a person’s ownership of a defined property; if other persons have rights over the property (for example where a financial institution holds a mortgage bond over the land), details thereof are also endorsed (recorder) on the title deed. |
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| Trust Account | A bank account in which the account holder holds money in trust for another person until the occurrence of a certain event. The money in such an account is referred to as trust money.
Every estate agency business must have a trust account which must be auditor every year. |
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| Unrehabilitated Insolvent | An insolvent whose estate is controlled in terms of the Insolvency Act 24 of 1936.
Generally stated, an insolvent automatically becomes rehabilitated (ie. ceases to be an insolvent)
10 years after he has been declared insolvent. |
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| Voetstoots | ‘As is’. If a voetstoot clause is included in an agreement of sale of immovable property, it means that the seller cannot be held liable for latent defects in the property, ie. defects which are not visible upon a reasonable inspection of the property, such as a leaking roof. A voetstoots clause does not, however, protect a seller who knows about a latent defect but fails to disclose this in order to defraud the purchaser. |
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| Zoning | Zoning limits the purpose for which a property may be used, eg. residential, commercial, industrial, educational, etc. |
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Glossary V2.0 |
